Ahead of Prime Minister Manmohan Singh's visit here next month, a senior State Department official described 2005 as a watershed year in relations between India and the US but said there are significant hurdles to overcome.
Testifying before the House International Relations Subcommittee for Asia and the Pacific, Assistant Secretary of State for South Asia Christina Rocca said: "We are accelerating the transformation of our relationship with India, with a number of new initiatives."
These, she noted, included engaging in a new strategic dialogue on global issues, and on defence and expanded advanced technology cooperation.
President George W. Bush came to office in 2001 recognising the growing importance of South Asia to the US, she noted and added that during his second term his intention to build on the already strong relationships and move to the next level was making progress.
She reiterated the Bush administration's mantra that relations with India and Pakistan were de-hyphenated and stood on their own.
With India "this is a watershed year", she said especially with Secretary of State Condoleezza Rice's visit to that country and a series of senior officials making their way back and forth between India and the US not to forget the upcoming visit of Prime Minister Manmohan Singh and President Bush's promise to go to India some time later this year."
"India and the United States have begun a high-level dialogue on energy security, to include nuclear safety, and a working group to strengthen space cooperation. Our defence relationship is expanding and we are revitalising our economic dialogue. The US relationship with India and our commitment to developing even deeper political, economic, commercial and security ties have never been stronger," Rocca emphasised.
"As Secretary Rice has said, we see India becoming a world power in the 21st century, and our dialogue with India now touches on broad issues around the region and the world," she reiterated, adding, "The United States is supportive of India's growing role as a democracy that is stepping on to the world stage to take on global responsibilities."
She again drew attention to India's coordinated efforts on tsunami relief efforts, its role during the Nepalese emergency, and efforts to support the peace process in Sri Lanka.
The US-India Economic Dialogue initiative is focused on enhancing cooperation in four areas: finance, trade, commerce and the environment, she said, pointing to the April 2005 signing of a landmark Open Skies civil aviation agreement, supporting India's moves forward with financial, trade, energy, water, and agriculture reforms designed to sustain and elevate its "impressive" rate of growth and reduce poverty.
"Reforms in these areas would allow pursuit of new opportunities with the United States in a variety of high-tech fields and would allow Indian consumers a greater choice of goods and services," she said.
"Additionally, we are establishing a forum of US and Indian chief executives to discuss specific and innovative ways to improve economic ties."
But challenges remain such as "significant" tariff and non-tariff barriers that are a problem for US businesses interested in India's market, intellectual property protection that has been helped by India's 2005 enactment of a new patent law to provide patent protection for pharmaceuticals and biotechnology inventions that has to be built upon so that India's intellectual property laws and enforcement efforts against piracy and counterfeiting become world class, contributing to further economic development and enhancing consumer choices and creativity in India.
"To help accomplish our mutual economic objectives for the Indian people we also need to devote our near-term attention to additional trade disputes involving specific companies, such as US investors in the power sector. We also need to deal with more general 'policy' issues, such as Indian government subsidies for fertiliser and LPG and non-transparent standards," Rocca said.
The Bush administration sees India and Pakistan's rapprochement as bold steps contributing to overall stability in the region, she stressed, and Washington will continue to encourage wide-ranging dialogue between the two countries to settle all issues including Kashmir.
The bus service across the Line of Control, she said, "is having a real impact on the lives of average Kashmiris, allowing resumed contacts between long-separated populations".
"We now have an exciting window of opportunity to work with our partners in South Asia and make truly historic progress. Our goal is to move forward firmly and irreversibly on paths to stability, democracy, moderation and prosperity," Rocca said.