India has undergone a phenomenal transformation from being a British Colony to gaining its independence, going through a semi-socialist period of development, and emerging as one of the fastest growing economies in the world and a country that is considered a rising power.
Beginning in the early 1500's, rivalry among the major European powers of the time over resources and geo-strategic outposts brought the French, Dutch, and British among others to India. By the 19th century the British controlled most of what was labeled British India. They did not vacate until 1947 when they faced a long struggle for Indian independence led by Mahatma Ghandi (among others) and a general decline in the British Empire.
In August of 1947, partition occurred when the British granted British India its independence creating two countries currently known as India and the predominantly Muslim Pakistan. This event and the Kashmir dispute has left tension in the relationship between both countries which has led to two wars and many skirmishes. The United States has traditionally taken a neutral stance on the conflict and advocated for a peaceful resolution.
As was the case with many other countries U.S.-Indian relations during the Cold War was colored by the bipolarity of the international system. Despite India being one of the main founding countries in the Non-Aligned Movement it tended to, as did many post-colonial countries, lean towards more populist/socialist policies, creating tension with the United States.
In the early 1990's, India realized that the "planned economy" system had run its course and that a change towards an open market approach was needed. The United States, in cooperation with the major international economic institutions, offered India support in its economic transformation by reducing protectionist policies and opening up the country for foreign investment. India has since become one of the fastest growing economies in the world and a major American trading partner.
India began developing nuclear technology in the 1950's and conducted a test explosion in 1974. In 1998, India carried out more underground nuclear weapon's tests. Pakistan responded with its own nuclear test a month later. Both countries are believed to have small stockpiles of nuclear weapons.
The United States and India recently embarked on a controversial bilateral cooperation on nuclear power, called the Civil Nuclear Cooperation Initiative. Controversy has risen because India is not a signatory to the Non-Proliferation Treaty (NPT) and, therefore, should not be aided in enhancing its nuclear capabilities. The initiative has been criticized from various sides with multilateralists charging it undermines the NPT, the Indian left stating it puts India under American control, and critics in the United States charging the deal asymmetrically benefits India. The deal is now stalled in the Indian parliament.