The U.S., in an apparent reference to the Devyani Khobragde issue, on Saturday said such “challenges” should not be allowed to derail the future of its important relationship with India and the two countries needed to deal with differences in a constructive manner.

“Every meaningful partnership between powerful nations encounters setbacks. And, obviously, recent events have drawn more attention to our disagreements than to our cooperative efforts,” National Security Advisor Susan Rice said in an apparent reference to the issue of the arrest of the Indian diplomat which created tension between the two countries.

“But, those difficulties should be minor compared to the breadth of our relationship and the magnitude of what we can accomplish together,” she said in her address to the Aspen Institute U.S.-India Dialogue being held in Washington.

“We must also deal with our differences in a constructive manner, commensurate with a relationship of this importance. We cannot allow such challenges to derail the future we are working diligently to build a future of greater prosperity, greater security, and consistent adherence to our shared values,” Ms. Rice said, reiterating the commitment of the Obama Administration to strengthen and deepen the bilateral relationship between the two largest democracies of the world.

Ms. Khobragade, 39, was arrested on December 12, on visa fraud charges, strip-searched and held with criminals, triggering a row between the two countries with India retaliating by downgrading privileges of certain category of U.S. diplomats among other steps.

Ms. Khobragade was indicted on visa fraud and making false statements by a U.S. grand jury. She returned to India after she was asked to leave the U.S. by the State Department.

“The relationship between India and the United States can and should be, as President Obama has said many times, ‘one of the defining partnerships of the 21st century’ and, as I’ve experienced firsthand, it can also be one of our most productive partnerships,” she said.

Ms. Rice said she has built a productive relationship with her Indian counterpart Shivshankar Menon.

Given the hard work done by the governments of the two countries in the last two decades, Ms. Rice exuded confidence that the India-U.S. relationship would continue to grow irrespective of the outcome of the upcoming elections.

“For almost two decades, in both India and the United States, Presidents and Prime Ministers and political parties have come together and worked to overcome old schisms. Piece by piece, we’re establishing a lasting partnership that’s equipped to tackle today’s global challenges.

“And, the U.S. is confident that, whatever the outcome of India’s upcoming national elections, the cooperation and strategic partnership between our nations will continue to grow,” Ms. Rice said.

She said India and the U.S. are deepening their cooperation in meaningful ways across the board and as India continues to grow and to take on greater responsibilities on the world stage, the two nations must work even harder to make sure this partnership lives up to its potential.

Emphasising the need to expand opportunities for trade and investment, Ms. Rice raised the concerns of the U.S. in particular those related to intellectual property.

“These tough issues won’t be resolved overnight. But, President Barack Obama and Prime Minister (Manmohan) Singh are committed to maximising our economic relationship,” she acknowledged.

“Concluding a bilateral investment treaty would be a strong step forward, helping to attract more capital to India and benefiting Indians investing in industries across the United States. And, since our two nations make up almost a quarter of the world’s population, it can only benefit the global economy,” she said.

The two largest democracies of the world, she said have a responsibility to stand united to defend the values that the peoples share.

“Lets build on the important steps we’ve already taken, such as: working together in the UN Human Rights Council to advance reconciliation in Sri Lanka; supporting elections in third countries; and helping found the UN Democracy Fund,” Ms. Rice said.

“Still, there’s much more we can do, starting by ensuring that the rights of women, members of ethnic and religious minority groups, and those in the LGBT community are protected at home and abroad. Both our nations have struggled with these issues in our histories, and we must continue working to make our democracies safe for all our citizens and to lead the world by our example,” she said.