India and the US: Asymmetric Interdependence

India isn’t “dependent” on the US in a colonial, existential, can’t-function-without-it sense. But it is deeply entangled with the US across the parts of the economy and security architecture that matter most in the 21st century: high-value exports, technology stacks, capital flows, and strategic positioning in Asia.

The cleanest way to describe it is interdependence with asymmetry. India can disagree with Washington and survive. But when the US sneezes—in markets, visas, tech policy, or geopolitics—India feels it fast and hard.

1) Trade links that hit where it hurts (exports, services, and remittances)

India doesn’t rely on the US for basic survival needs like food or fuel. The dependence shows up elsewhere: earning power.

• Exports: The US is India’s largest export destination across high-volume categories like IT services, pharmaceuticals, textiles, and gems/jewelry. When your biggest customer slows down, your economy doesn’t collapse—but your growth story gets punched in the face.
• IT services exposure: A large share of revenue for major Indian IT firms comes from US clients. US corporate tech spending cycles ripple straight into Indian balance sheets.
• Pharma exposure: The US is the single biggest market for Indian generics. That’s not sentimental dependence; that’s revenue dependence.
• Remittances: Indian professionals in the US send back significant money every year. This is a quiet stabilizer for many households and a real factor in foreign exchange inflows.

The risk is straightforward: US recessions, procurement slowdowns, or visa policy tightening hit India disproportionately because they strike at the exact channels India uses to scale income—services, high-skill labor mobility, and export access.

2) The tech stack: US-anchored by default

Even when an Indian company is “global,” the underlying rails are often American.

A huge part of India’s startup and enterprise ecosystem is built on:

• Cloud infrastructure (AWS, Google Cloud, Azure)
• Developer tooling and SaaS (overwhelmingly US-origin)
• Venture capital (US capital still anchors global risk appetite)
• Hardware and chips through US-aligned supply chains (think NVIDIA, Intel, Qualcomm class dependencies)

This isn’t about patriotism; it’s about gravity. The US set many of the standards, owns many of the platforms, and sits at the center of the capital networks that fund innovation.

There’s also a human layer: a large share of top Indian researchers and engineers have been trained in US universities or have worked inside US research environments. That creates a knowledge loop where talent, norms, and ambition circulate through US institutions.

India is building alternatives and local capacity, but today the US still anchors the stack in ways that are difficult to replace quickly without paying a performance and cost penalty.

3) Defense and security: alignment without formal subordination

India is not a US treaty ally. There are no NATO-style obligations, and India has historically avoided being locked into any one bloc. But in practice, India’s security architecture is increasingly US-linked.

• Hardware and procurement: India increasingly buys US military hardware and surveillance systems (and trains on them, integrates them, depends on maintenance and upgrades).
• Intelligence and maritime awareness: Intelligence sharing and surveillance cooperation matter, especially with China as the pacing threat on the northern border and across the Indo-Pacific.
• The QUAD: The US–India–Japan–Australia grouping is now a major pillar of India’s Indo-Pacific posture. It’s not just symbolism; it signals India’s strategic direction.

India still maintains buffers—Russian legacy systems, diversified sourcing, domestic production ambitions—but the trajectory is clear: India’s deterrence posture is more credible when it is interoperable and aligned with the US-led security ecosystem.

Image credit: Wikimedia Commons

And that’s where “dependence” becomes tricky. India isn’t taking orders—but it is operating inside a strategic geometry where US capability and coordination shape the playing field.

4) The dollar system: the invisible dependency everyone pretends to ignore

Most “dependency” debates miss the biggest one because it’s boring and ever-present: the global financial system is still dollar-centered.

That has consequences:

• Global trade, including much of India’s, still clears through dollar rails.
• Sanctions, SWIFT access, and international capital movement are heavily influenced by US policy and US-aligned institutions.
• Indian markets react instantly to US Federal Reserve rate changes. If the Fed tightens, global liquidity tightens, risk assets wobble, and emerging markets feel the squeeze.

India can talk about de-dollarization and rupee trade (and it should explore options), but the reality is that the dollar system is not something you opt out of on a timeline decided by slogans.

This is where the asymmetry shows up most brutally: the US can export financial conditions globally. India mostly reacts.

5) Diplomatic cover and institutional leverage

India’s foreign policy tradition is strategic autonomy: cooperate widely, avoid dependence, keep options open. That instinct is rational—especially for a civilizational state that doesn’t want to be a “camp follower.”

But in today’s geopolitics, alignment creates leverage.

US support matters for:

• Counterbalancing China in Asia (militarily, economically, and diplomatically)
• Access to global institutions and rule-making spaces
• Reducing isolation risk during crises

There’s a tradeoff here. India’s global leverage tends to increase when it is seen as aligned with the US, but the cost is reduced neutrality and less room for ambiguity. The more India benefits from US positioning, the harder it becomes to maintain the old posture of being everyone’s friend without consequences.

This isn’t moral; it’s structural.

6) The people layer: the most underrated form of dependence

If you want to understand modern power, follow the talent flows.

• Indian students form one of the largest foreign cohorts in US universities.
• A meaningful number of Indian founders, scientists, and executives operate inside US ecosystems.
• A large slice of India’s aspiration economy—startup ambition, professional prestige, research credibility—still routes through US institutions.

This creates a kind of soft dependence: not coercive, but influential. Norms, capital, networks, and status all flow through the US, shaping what gets built, funded, and celebrated back home.

It’s also why visa policy becomes economic policy. A tweak in H-1B sentiment can ripple into Indian household decisions, university pipelines, and even startup trajectories.

What India is not dependent on (and why that matters)

It’s important not to exaggerate this into doom.

India is not dependent on the US for:

• Food security: India is largely self-sufficient.
• Energy survival: India has diversified suppliers (including Russia and the Middle East).
• Political continuity: India can and does openly disagree with Washington.
• Military command: No US bases, no alliance obligations, no formal subordination.

That’s the stabilizer. India’s “dependency” is concentrated in high-value layers—tech, capital, export earnings, and strategic intelligence—not in basic state survival. That distinction is why India can push back without collapsing, but also why it can’t casually ignore the US without paying real costs.

Conclusion

India’s relationship with the US is not a story of submission—it’s a story of high-stakes entanglement. The US sits at the center of the systems India uses to scale: dollars, technology platforms, elite education pipelines, and security coordination in Asia. India’s long-term challenge is to keep strategic autonomy while still extracting value from selective partnership, because pretending the dependence doesn’t exist is how you become vulnerable to it.