U.S. Assistant Secretary of State for South and Central Asian Affairs Nisha Biswal addressing at American Center in New Delhi
The first senior US official to visit India since a damaging diplomatic row said on Thursday the two countries should focus on "talk and trade" as they look to get their partnership back on track.
In December, a female Indian consulate official was arrested and strip-searched in New York on suspicion of visa fraud, enraging Indian authorities who said she had diplomatic immunity.
The incident fuelled a bitter row between the world's two largest democracies, which have overcome Cold War suspicions to embrace each other as trading partners and strategic allies in recent years.
Nisha Desai Biswal, the US assistant secretary of state for South and Central Asian Affairs, acknowledged problems in a speech in the Indian capital on Thursday but urged both sides to overcome their differences.
"We're addressing these concerns head-on as good partners do," she said, adding: "The solution is to talk and trade."
Red tape, a lack of transparency in tax law and weak protection of intellectual property are discouraging investment in India, Biswal said as she listed a series of US concerns.
She also highlighted that India has ranked a dismal 134 out of 189 countries in world rankings for hospitable places to "invest and start a new business".
Annual trade between India and the US currently stands at a $100 billion but the two sides have pledged to increase this figure five-fold over the next decade.
While highlighting India's strategic importance, Biswal said the US was eager for better relations between the South Asian giant and its neighbours to the west - Pakistan and Afghanistan - and central and southeastern Asia.
"In the coming years, the most important step India can take to promote greater connectivity is to normalise trade with Pakistan," she said.