During an interaction with a gathering of foreign policy experts at Ananta Aspean, a think-tank, American Ambassador Richard Verma said the US has been urging China to do its transactions respecting rule of law and the country has to be "watched carefully".
"When we have human rights concerns, security concerns, we raise them with China... The extant of the dialogue between India and China... That's exactly what should happen and that is a good thing," he said, replying to a question.
Replying to another question, he said the US was not trying to "restraint or contain China" while highlighting its trade ties with Beijing.
"US-China relationship and India-China relationship has a lot of similarities," he said.
The Envoy said President Barack Obama and Prime Minister Narendra Modi also recognised convergences in the two country's Asia policies - the US rebalance and India's Act East policy.
"So the President and Prime Minister issued a Joint Strategic Vision for the Asia Pacific and Indian Ocean Region (JSV) that set a course for a new direction," he said.
Calling defence and security cooperation between US and India "pillar" of the relationship, he said six path-finding projects have been identified under the Defence Technology and Trade Initiative (DTTI) and indicated that these issues will be discussed during US Defence Secretary's upcoming visit here.
On intellectual property rights issue, he hoped to find a solution.
On India planning to sign an agreement with Iran for the development of the strategically important Chabahar port, Verma said no country should rush to finalise investment pacts with that country before the international community finalised the nuclear pact with that country.
Union Road Transport and Highways Minister Nitin Gadkari is on a visit to Iran and is likely to finalse the Chabahar port project.
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