Presently, the open areas for dialogue between India and USA include military issues related to combating terrorism and missile defence; developmental issues related to science and technology; information technology; cyber security and biotechnology; and other issues like health; environment and energy.However, India and USA belong to different geo-strategic contexts and different stages of economic development, which leads to occasional differences in perspectives.

“Our relations with the United States have entered a phase of unprecedented improvement. Besides regular political dialogue, India and the United States have established over 15 institutional forums that meet regularly. Notwithstanding the chill of May 1998, dramatic progress has been seen in security and defence cooperation, and trade and investment-the US is one of our largest trading partners, the predominant destination of our IT services exports and the major source of foreign investments. Yet, the challenges remain for better management of relations, given the different geostrategic and economic contexts, and occasional differences in perspectives. The investment that both sides have made in the relationship is predicated as much on mutual benefit as on its global significance.”

Historical Background

Pre-Independence US supported the Indian Freedom Struggle  and Indian constitution had inherited many principles  from U.S constitution.

Over five decades, the relationship between the world’s two largest democracies has witnessed periods of ups and downs. Successive American Administrations concerned with the need to contain communism did not view India’s leadership of the Non-aligned Movement very favorably. The US alliance with and military support to a country hostile to India was also a cause of friction. The dominance of the state sector in the Indian economy was viewed in the US as inefficient and wasteful, and detrimental to its own interests. The Indian economy nevertheless benefited considerably during this period from US food aid (PL-480) and economic, scientific and technological assistance that, among others, made the Green Revolution in the mid-1960s possible.

The dynamics of the Cold War the U.S. alignment with Pakistan and China, and the Indian ties with Soviet Union, conducting of nuclear tests in 1974 by India strained Indo-U.S. relations. The end of the Cold War and the collapse of the Soviet Union raised the prospect of the two countries exploring a new relationship. The end of the Cold War in the 1990s, coinciding with the liberalization of the Indian economy, saw a steady improvement in India-US relations with the Clinton Administration identifying India as one of the 10 major emerging markets. The last few years have witnessed a number of high-level exchanges, unprecedented in the history of bilateral relations, as well as a commencement of a “strategic dialogue”, which were expected to culminate in a US Presidential visit to India in 1998.

The nuclear difference came to the fore over the comprehensive Test Ban Treaty (CTBT), which the Clinton administration wanted so keenly and India, after initial support, rejected it. As he began his second term in January 1997. Clinton made a renewed bid to engage India and initiated a strategic dialogue. Plans were afoot for Clinton’s visit to the subcontinent in 1998.

As the U.S. reacted bitterly to nuclear tests of May 1998, the relationship seemed heading for a tailspin. Ironically, the nuclear tests opened the door for a new dialogue, the most intensive and sustained in the history of Indo-US relations.9/11 attacks changed the whole geopolitical scenario and USA became dependent on Pakistan for supporting its ‘war on terror’ in Afghanistan. India fully supported the US War on Terrorism and offered all possible assistance. Pakistan’s ‘double standards’ on terrorism became obvious and USA developed a new sensibility for India’s problem with terror exported by Pakistan. India started to play a constructive role in Afghanistan, which was strategically important to Indian interests.

Mutual Interests

India is huge and growing market for global commerce, a leading player in knowledge economy with demonstrated soft skill potential. India’s accelerating economic growth has attracted huge investment by major U.S. corporations.

U.S. companies see huge potential in goods and services needed to upgrade and build India’s railroads, airports, power plants, and fiber optic cables, health care and energy production.

India’s critical role as part of a “New Silk Road,” concept based upon the revitalization of trade and transit linkages between the South, Central, and West Asia is also another important area of global interest.

India and US share interest in promoting regional and global security by combating terrorism, promoting democracy, economic prosperity through trade, investment, and connectivity through the vital sea lanes of the Indian Ocean, preventing nuclear proliferation.

India is of immense strategic importance to the United States in coping with a more powerful China and as stabilizing force and critical partner in South Asia, and could help manage China's unpredictable rise and counter a global threats such as terrorism and nuclear proliferation.

Both countries need stronger economic ties having world's largest economies and fastest growing middle class. What binds the two countries together far exceeds those differences that drive them apart.

In the recent visit to India in 2014 US Secretary of state has lauded the Indian effort of promoting inclusive growth slogan 'Sabka Haath, Sabka Vikas' as a ''great vision'' and said Washington would approach the Modi government in a way both the countries could be indispensable partners in the 21st century.

Contentious Issues

Several differences have emerged between the two countries, including a multitude of increasingly acrimonious trade disputes, the adequacy of New Delhi's current patent protection regime, the impact of India's nuclear liability legislation, proposed changes to U.S. immigration rules, and the impending withdrawal of American troops from Afghanistan. Some other areas are

• The US insistence on India signing the CTBT;
• India’s minimum credible nuclear deterrent which the Americans wanted India to quantify;
• India’s missile development programme and its future;
• Fissile material production cut-off on which the US wants India to impose a voluntary moratorium and engage in ongoing international negotiations at Geneva on the Fissile Materials Cut-off Treaty (FMCT); and
• Strengthening the Indian export control regime to prevent the export or proliferation of nuclear technology to any other country.
• India’s effort for a permanent membership in UNSC to which US has not given full support.
• Afghanistan: Pakistan’s growing influence in Afghanistan and its efforts to exclude India completely on which the United States has not given much support, even though it may agree that India has a positive role to play there. India fears that Afghanistan could once again turn into a safe haven for non-state actors, which may result in the rise in insurgencies in Kashmir.
• Iran: India's ties with Iran have become an irritant in the India–US relationship with perceptible US influence on India's Iran policy, US stand as India-Iran pipeline.
• Recent reports of the National Security Agency conducting surveillance of communication by Indian government agencies, including several Indian diplomatic posts in the United States, have also contributed to the lack of trust between the two governments.
• India’s stand at WTO, in light of Food Security Act has also been criticized by US in 2014 meet.