The dialogue, to be chaired by external affairs minister Sushma Swaraj and US Secretary of State John Kerry, will cover security, energy, trade and investment, science and technology, and regional and international issues, among others.
This will be the first such dialogue between India and the US after the Modi government came to power in May. The dialogue is expected to boost commercial and business ties.
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Kerry, who arrived in India on Wednesday evening, will be meeting with Modi on Friday. He will be accompanied by US Commerce Secretary Penny Pritzker.
The dialogue, expected to go on for an hour, will be followed by delegation-level talks, the duration for which is two hours. Kerry will also be meeting finance and defence minister Arun Jaitley in the morning.
While the dialogue is widely touted to be a turning point in India-US bilateral relations, many within the government think otherwise.
India-US relations have undergone a shift in past couple of years, with American firms citing unease and discomfort in doing business with India. Plus, last year's row involving the arrest of Indian diplomat Devyani Khobragade dealt a severe blow to relations.
"This (strategic dialogue) is certainly not going to be a jamboree. Both countries are facing some serious issues here. This meeting should amend the ties to some extent at least," a senior official told Business Standard.
US firms have become quite vociferous in the past couple of years about India's trade and industrial policies. This has made the US government take a more critical look at India's intellectual property rights (IPR) laws, domestic procurement policies, and trade practices.
US authorities recently stated under their annual Special 301 Report that it would conduct 'cut-of-cycle' reviews on India's IPR laws.
Addressing the Confederation of Indian Industry in Mumbai on Wednesday, Pritzker stated developing infrastructure, improving manufacturing and encouraging government to create a business climate that is more open to global investments are the three key areas that US would like to focus on for its initial efforts.
The US and India recently sparred over the issue of food stockholding and subsidies at the World Trade Organization (WTO). This is because India refused to sign the trade facilitation agreement as was agreed under the ninth WTO ministerial in Bali, Indonesia.
Besides, the US and India are also facing a series of trade disputes at the WTO Dispute Settlement Body.
The strategic dialogue is also expected to set the tone of Modi's meeting with US President Barack Obama in September.
"Kerry's visit underscores the importance of the US-India partnership, and will lay the groundwork for Prime Minister Modi's September visit to the United States," said State Department Spokesperson Jen Psaki, who is accompanying Kerry on his trip.
Both sides have set a target of achieving $500 billion worth of bilateral trade in goods and services from $100 billion at the moment. The US is India's second-largest trading partner.
India and US are also negotiating a bilateral investment treaty (BIT). Last year alone, there had been over 70 exchanges of senior-level visits, including the visits of US vice-president Joe Biden. Then in September, former Prime Minister Manmohan Singh visited the US and had his third summit-level meeting with Obama.
A BILATERAL AFFAIR
| The dialogue will be chaired by external affairs minister Sushma Swaraj and US Secretary of State John Kerry
| The dialogue is expected to boost commercial and business ties