At the heart of the current sour mood is New Delhi's view that the US is not fully helping the cause of peace in the region with its backing of a militaristic Pakistan.
On the other hand, Washington is irked by what it sees as India's cussedness in not responding quickly enough to de- escalate the situation in the region despite concessions by Pakistan.
Ahead of his trip to the region, Mr Powell told mediapersons on Thursday that there had been some reduction in infiltrations across the line of control, but it was still unfortunate that terrorist violence had not stopped.
Mr Powell said, “I will see if there are any other actions that can be taken that will reduce the level of violence or the potential for violence.”
The Indian side feels Washington has not been sufficiently forceful or persevering in doing that. Pakistan's military regime is getting away by not dismantling what India calls the infrastructure of terrorism, so that it can be used on another day.
New Delhi is also clearly unhappy that Washington is strengthening Gen Musharraf's hand and not Pakistan's. While paying the usual lip-service to the return of democracy in Pakistan, the US has winked at changes being brought about by Gen Musharraf that will ensure that he wields the real power indefinitely.
They are making a terrible mistake. They will have a Pakistan that will be like Shah's Iran or Marcos 'Philippines. They will have the loyalty of a dictator but not the people. But who's to tell the superpower that? one Indian official asked.
There is further disquiet on the Indian side over the resumption of a military relationship between the US and Pakistan under the ostensible excuse that Washington needs to restore its influence with the Pakistani military.
So far, the US has resumed supplying Pakistan what it calls non-lethal items to help fight terrorism on its western front. But press reports in Pakistan say the US has agreed to revisit the issue of supplying F-16s to Islamabad.
Indian officials say anytime Washington strengthens Islamabad's military hands, it underserves the cause of the peace in the region given the Pakistani military's penchant for adventurism that has seen it initiate three wars against India.
New Delhi has been further irked
by the reluctance in a section of the US administration to clear the sale
of missile defence system to New Delhi even as it reopens the issue of
arms supply to the military regime in Pakistan.