The Congressional Research Service (CRS) report was prepared for US lawmakers before the just-concluded visit of Prime Minister Narendra Modi to the US.
A copy of the 43-page report, which reviews major facets of current US-India relations, was provided to PTI, days after the conclusion of Modi's visit.
In recognition of India's increasingly central role and ability to influence world affairs and with a widely-held assumption that a stronger and more prosperous democratic India is good for the US, the US Congress and two successive US administrations have acted both to broaden and deepen America's engagement with New Delhi, the report said.
"Such engagement is unprecedented after decades of cold war-era estrangement and today takes place 'across the spectrum of human endeavour for a better world', as described in a 2015 US-India Declaration of Friendship," it said.
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"Washington and New Delhi launched a 'strategic partnership' in 2005, along with a framework for long-term defence cooperation that now includes large-scale joint military exercises and significant defence trade," the report said.
Yet more engagement has meant more areas of friction in the partnership, many of which attract congressional attention, said the CRS report authored by Alan Kronstadt and Shayerah Ilias Akhtar.
India's economy, while slowly reforming, continues to be a relatively closed one, with barriers to trade and investment deterring foreign business interests, CRS said.
According to CRS, differences over US immigration law, especially in the area of non-immigrant work visas, remain unresolved; New Delhi views these as trade disputes.
The June 2017 announcement of US withdrawal from the Paris Agreement on climate change dismayed many in India and brought into question significant ongoing bilateral collaboration in the energy field, it said.
"Other stumbling blocks-on localisation barriers and civil nuclear commerce, among others-add to sometimes argumentative associations," the report said.
Meanwhile, cooperation in the fields of defence trade, intelligence, and counter-terrorism, although vastly superior to that of only a decade ago, runs up against the obstacles variously posed by India's bureaucracy, limited governmental capacity, difficult procurement process, seemingly incompatible federal institutions, and a lingering shortage of trust, not least due to America's ongoing security relationship with and aid to India's key rival, Pakistan, CRS said.