"We believe, an important and necessary step to crack down on this - illegal actions or illicit actions," State Department Deputy Spokesman Mark Toner said.
"American citizens who are working and living in India, I think have the proper information now to exchange those notes or to get new notes, and it's a little bit of an adjustment, just as it was an inconvenience, I'm sure, for many Indians, but I think a necessary one to address corruption," Toner said in response to a question.
Discontinuance of the 500 and 1,000 rupee notes he said is designed to target illicit cash proceeds from corruption and tax dodging.
"With respect to your question about the impact on American citizens, we got this question I think the day that this was announced," he said.
"Indeed, as it was an inconvenience for many Indians, it was an inconvenience for Americans who were also there, and we actually put out a statement through our US embassy to American citizens in India about the changes," Toner said.