NEW DELHI: The United States expects that India's growing confidence on the world stage as a result of its high economic growth rates will it a "more effective partner" for the U.S. and a more formidable interlocutor in areas of disagreement, particularly the World Trade Organisation.

In his annual threat assessment — posted on the Internet — John Negroponte, Director of (American) National Intelligence, said on Thursday that India would continue to be a "reliable ally" against global terrorism, given that it is a major target for "jihadists" in part because of the insurgency in Jammu and Kashmir.

Pointing out that the three-year-long peace process between India and Pakistan had lessened tensions in the region, Mr. Negroponte said: "New Delhi's threshold for responding militarily to terrorist attacks has apparently increased since the two countries last approached the brink of war in 2002."

Though the Mumbai train bombings last year did not derail the composite dialogue process, the prospect of renewed tensions remained despite the improved relations.

"Nonetheless, New Delhi's concerns about Pakistan's tolerance, at a minimum, of terrorist attacks on Indian soil remains a dominant theme in relations, and risks derailing rapprochement. An attack on a high-profile target might lead New Delhi to take action to curtail militant capabilities in Pakistan or Pakistani [occupied] Kashmir and punish Islamabad for its continued support to Pakistan-based militants. We remain concerned that such a conflict could escalate," Mr. Negroponte said.

Source of Islamic extremism

Turning to Pakistan, the intelligence boss felt that while Islamabad was a "frontline partner" in the war on terrorism, it remained a major source of Islamic extremism and the home for "some top terrorist leaders."

"Many of our most important interests intersect in Pakistan, where the Taliban and the Al-Qaeda maintain critical sanctuaries... eliminating the safe haven that the Taliban and other extremists have found in Pakistan's tribal areas is not sufficient to end the insurgency in Afghanistan but it is necessary," he maintained.

"We recognise that aggressive military action, however, has been costly for the Pakistani security forces and appreciate concerns over the potential for sparking tribal rebellion and a backlash by sympathetic Islamic political parties. There is widespread opposition among these parties to the U.S. military presence in Afghanistan and Iraq. With elections expected later this year, the situation will become even more challenging — for President [Pervez] Musharraf and for the U.S."

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