Lauding the strides India has made since opening up its economy, Palin said there was a need to do the same in Pakistan.
"We cannot go back to those hyphenated days of India-Pakistan. The de-hyphenation that occured when India was able to start making independent decisions to allow the prosperity that is growing here. Now, we need to and can work together in doing with Pakistan," she said in an interaction at the India Today Conclave.
Palin, a former Alaska governor, sought to disapprove Pakistan pushing terrorists into India and said that the US would not put up with innocent people being attacked.
"I hear that condemnation when we perceive that Pakistan is not tough enough on terrorists.. they are being allowed to cross border into India. It is one of the things we need to work on," she said.
"We will not put up with innocent people being attacked, innocent people being harmed by terrorists," she said.
Palin criticised US President Barack Obama for his policies in Libya and said that America has to be "more decisive and less dithering" in its approach.
She was not in favour of sending American troops to Libya and wanted stricter enforcement of the no-fly-zone over the troubled north African nation.
Palin praised Secretary of State Hillary Clinton as a "stronger and more experienced" Presidential candidate.
She remained non-committal on her candidature as a possible Republican nominee for the next US Presidential election. "I don't know yet," was her reply when asked whether she saw herself as a possible Presidential candidate in the next election.
At the same time, she said it was not impossible for a woman to be the President of the US. "There are a lot of gals out there who would make good presidential candidates," she said.
Through her 30-minute addressed Palin made a strong pitch for free market economy and lesser government interference in businesses.
Palin dismissed the talk of America's decline as a world power. "I completely reject that thought. It is wrong thinking by our friends and wishful thinking by our enemies. America is not on a decline. America's demise has been predicted before. It didn't happen then, it won't happen now," she said.
On China, Palin said India and the United States want to ensure China's peaceful rise, even as she expressed concern at Chinese military build-up.
"We want to both ensure that China's rise is peaceful, while hedging against bets that it could be otherwise," she said. "I personally have huge military concerns about China. They are stockpiling ballistic missiles, submarines, new age ultra modern fighter aircraft. Is that all for a defensive posture? How could that be when you don't see a tangible outside threat to that country?" Palin asked.
On the trillions of dollar of US debt held by China, she said it was dangerous to be so reliant on one country.
"China has a choice -- they can either become part of the path that many other countries are on and seek democracy, freedom or go the other way," she said.
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