US Secretary of State John Kerry told Narendra Modi that India's stance on a key WTO trade deal sent the wrong message, as he met the country's new prime minister for the first time on Friday.
Kerry has expressed optimism about expanding cooperation between the world's two largest democracies during a first visit aimed at reviving a relationship clouded by mistrust.
But a raft of disputes has cast a shadow over hopes for a warmer relationship, with India on Thursday blocking a major World Trade Organization pact on customs procedures.
During the meeting -- aimed at breaking the ice with a leader once shunned by Washington -- Kerry told Modi India's stance on the deal was at odds with his desire to open up the country's economy.
"We note that the prime minister is very focused on his signal of open to business and creating opportunities and therefore the failure of implementing TFA (Trade Facilitation Agreement) sends a confusing signal and undermines that very message that he is seeking to send about India," a US official quoted Kerry as saying.
"While we understand India's food security concerns, the trade facilitation agreement is one that will bring tremendous benefit, particularly to the world's poor. India's actions therefore are not in keeping with the prime minister's vision."
- 'Critical to build trust' -
Kerry urged India to work with the United States to move the WTO process forward, the official said.
Speaking on condition of anonymity, the official also said Modi told Kerry that while areas of difference would always exist, "what is critical is what we do to enhance and build on our trust".
Earlier, Kerry said the United States wanted to "try to really take the relationship to a new place", following a series of diplomatic spats with India.
Washington has little relationship with Modi, a Hindu nationalist who was refused a US visa in 2005 over allegations that he turned a blind eye to anti-Muslim riots as leader of the western state of Gujarat.
The United States caught up with other Western nations during the election campaign, sending its ambassador to meet Modi who since taking office has shown no visible signs of holding a grudge over his past treatment.
But US officials, who value frank and free-wheeling relationships with foreign leaders, are unsure what to expect from Modi who is known for his austere, solitary lifestyle and is not believed to be at ease in English.
Modi, who as a young man wandered the Himalayas, is seen as a very different character than his predecessor Manmohan Singh, a bookish Oxford-educated economist with whom President Barack Obama had found a kinship.
- Break from Middle East efforts -
Kerry, the polyglot son of a diplomat, has nurtured personal relationships as he pursues key goals including seeking peace in the Middle East.
The top US diplomat went ahead with the trip to India despite working around the clock to end the bloodshed in the Gaza Strip. Just hours before his scheduled meeting, Kerry called a news conference at 3:00 am (2130 GMT) to announce a 72-hour ceasefire between Israel and Hamas.
The United States has sought to put relations with India on firmer ground after the Modi visa row and a crisis in December when US authorities arrested an Indian diplomat for allegedly mistreating her servant, infuriating New Delhi.
But new disputes have kept arising.
On Thursday, the WTO said that the 160-member body had failed to approve a landmark pact that would streamline global customs procedures.
India had stalled the pact as it pushed for the WTO to give the green light on the developing power's stockpiling of subsidised food. India says the policy is vital to help the poor, but rich nations charge that the practice distorts global trade.
The United States voiced "disappointment" and "regret" over India's stance, while India said it protested to Kerry over reports from former NSA contractor Edward Snowden that US intelligence had snooped on Modi's Bharatiya Janata Party while it was in opposition.
US officials, however, have signalled that they do not want to create a new rift by renewing past concerns about Modi's track record on minority rights.
Kerry trode lightly on the issue on Thursday, saying that the two democracies shared the belief that "every citizen, no matter their background, no matter their beliefs, can make their full contribution".
"From women's rights to minority rights, there is room to go further for both of us," Kerry said.