While maybe an act of war is too harsh, we should be hitting them hard economically.
If there is a market incentive for companies to do something bad, and the government can, but does not act to correct/neutralize that incentive, then the government should be blamed. India is a democracy, so that blame also falls on the electorate.
As a US voter I grudgingly accept my ~4e-9 proportion of the blame for the shitty things the US allows.
If this was similar to the Russia stuff where the goal was to affect the election and was sponsored by the govt then sanctions kinda make sense, but this is a problem of international communication between private citizens. If we wanted to make some law for this that seems cool but it'd need to be done at the UN, not in the US
As another comment notes, the US is responsible for plenty of parasitism (MLMs, ponzi, crypto) that is likely a higher total value, but I suspect most citizens would feel it's unfair to sanction them because of some bad actors in the economy
It's the responsibility of the Indian government to police what happens within its borders. The Indian government has turned blind eye to scammers in their country targeting the US, they're effectively endorsing it.
Why should the US continue to do business with a country that leeches off of the US citizenry?
Historically, the US has done the same thing to Japan, and more recently, China, when their businesses undermine US businesses. Either by not respecting US IP or by running US businesses under through collusion.
Even if you come up with some way to somehow target specifically how the government functions but entirely spare the citizens from externalities, the government will just hold its citizenry "hostage".
This is a global problem. It boils down to the Internet and modern telco networks opening up cheap ways to address many millions of people, allowing scammers to troll for marks at scale. Gift cards, easy wire transfers, in-app purchases, easy card charges, and crypto have made it easy to get money from people with low friction too.