A senior official of US State Department on Tuesday said the United States and India need to "strengthen economic partnership to attain strategic partnership" but pointed out that the burden of action rests largely on Indian shoulders.

"With all positives in our relationship, the weakness of our economic links is glaring," observed Richard N Haass, director, Policy Planning Staff, Department of State. He said the elimination or reduction of tariff barriers, streamlining taxation and licensing requirements, and the resolution of intellectual property disputes by India would go a long way in removing the obstacles to trade and investment between the two countries.

He was addressing industry leaders at CII Ninth Partnership Summit, which is currently on in Hyderabad. He noted that the economic links between the two countries continue to be under-developed despite the enormous potential for commerce between the two large and dynamic economies.

"Although some 15 per cent of India's total trade is with the US, less than one per cent of US trade involves India. Two-way trade between India and US is less than that between America and Ireland, a country with fewer than four million people," he pointed out.

Haass said American investment, too, was at extremely low levels. Prime Minister A B Vajpayee during his visit to Washington had called for $10 billion of investment annually from the US. "Unfortunately, levels remain to one-tenth of that sum," he added.

"Given India's vast resources and the creativity of its people, India should be a magnet for investment. But too often it loses out to China, other parts of Asia, Europe, Latin America and Africa for US investment," he said and added that this situation was despite the extraordinary advantages India enjoy.

Citing the reasons for this situation, he said these included an entrenched Indian bureaucracy, outdated regulations, sticky legal wickets, parochial political prejudices, and a worsening fiscal deficit that crowded out spending for a decaying infrastructure, for education, and for health.

"Together, they work to keep India as a whole on the sidelines of global competition that could vastly benefit the Indian consumer, release Indian entrepreneurial creativity and let India play the international economic role its one billion people have a right to expect," he added.

"India will need to take steps to remove concerns that drive capital away to other less burdensome investment climates," Haass said and pointed out that India stood to gain a great deal from the Doha round of World Trade Organisation talks and should work to meet the tight deadlines needed to move the negotiations forward.