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I am going to assume you are discussing a situation covered by article 6 of the tax treaty and it would be taxable income.

As a US resident, you would report all worldwide income. If the income is exempt from taxation, it would come back off and you would either:

• use Form 8833 to claim the exemption. The form is in the program. 
• do not have to file Form 8833 for any of the following situations:

1. The payee can claim a reduced rate of withholding tax under a treaty on interest, dividends, rent, royalties, or other fixed or determinable annual or periodic income ordinarily subject to the 30% rate.
2. The payee can claim a treaty exemption that reduces or modifies the taxation of income from dependent personal services, pensions, annuities, social security and other public pensions, or income of artists, athletes, students, trainees, or teachers. This includes taxable scholarship and fellowship grants.
3. The payee can claim a reduction or modification of taxation of income under an International Social Security Agreement or a Diplomatic or Consular Agreement.
4. The payee is a partner in a partnership, or a beneficiary of an estate or trust and the partnership, estate, or trust reports the required information on its return.
5. The payments or items of income that are otherwise required to be disclosed total no more than $10,000.

However, I am not convinced that this income falls under the treaty, I am not a US -India treaty expert but lean towards this being taxable income under article 6. 

Reference:

About Publication 901, U.S. Tax Treaties