The report recalls that in May (2007), the Indian government acknowledged that the level of infiltration across the Line of Control had fallen, but noted that insurgents had in some case shifted routes to enter into the country through Bangladesh and Nepal. India continues to rank among the world's most terror-afflicted countries, it added.
The conflict in Jammu and Kashmir, attacks by Naxalites and Maoists in eastern and central regions, assaults by ethno-linguistic nationalists in the northeastern states, and terrorist strikes nationwide by Islamic extremists took more than 2,300 lives last year.
As per the report government's counterterrorism efforts remained hampered by outdated and overburdened law enforcement and legal systems.
The Indian judicial system was slow, laborious, and prone to corruption; terrorism trials can take years to complete, it said.
Apart from that the local police forces are poorly staffed, lacked training, and were ill-equipped to combat terrorism effectively.
The State Department document said that Al-Qaida is regaining strength in enclaves in Pakistan and overall deaths from terrorism quadrupled in Pakistan, where extremists based in remote tribal regions took a nation-wide violent campaign against the government.
The report identifies Iran as the world's most active state sponsor of terrorism with support for hard-line Palestinian factions.
The US list of state sponsors of terrorism includes five countries - Iran, Syria, North Korea, Sudan and Cuba. It, however, maintains that North Korea - which is not known to have sponsored any terrorist acts since 1987 - could be dropped from the list as part of the six-party accord under which it is to scrap its nuclear program.