The crisis surrounding the case of the Indian consular official whose arrest last month sent U.S.-India relations into a tailspin was at least temporarily cooled late Monday when the diplomat agreed to waive a Jan. 13 deadline to indict her.

In a request to federal court in New York, the attorney for Devyani Khobragade, charged last month with submitting fraudulent visa documents for her Indian maid, said that “significant communications . . . between the prosecution and the defense and amongst other government officials” could be undermined if the indictment threshold is crossed.

“It is our strong view that the pressure of the impending deadline is counterproductive to continued communications,” attorney Daniel N. Arshack said in requesting a 30-day extension.

Although several people close to the case would not cite any specific steps toward resolution, the postponement could ease pressure on the State Department, which has been at odds with federal prosecutors over the wisdom of the arrest and how it was conducted. Only the defense can waive the right to be indicted within 30 days from the date of arrest.

The filing came after Indian authorities said they had unearthed cases of tax and other legal violations by U.S. Embassy staff members in New Delhi that they are prepared to make public and act upon if Khobragade’s case is not resolved to India’s satisfaction.

Read the complaint


The complaint against Devyani Khobragade, deputy consul at India's consulate in New York, describes the charges, which include visa fraud. Read it.

Read Khobrogade's note to colleagues

Read the U.S. attorney's statement on the case

Devyani Khobragade gives an interview to Eye on South Asia in which she talks about her career and Indian diplomacy.

Indian officials declined to characterize their plans as a threat. But “it could all come out in the open like a can of worms,” said one senior official who was not authorized to speak openly to the news media on the matter.

“What we have is a wide array of issues that are under the scanner. Each aspect will be proceeded on with due care, if we have to,” the official said. Among the alleged irregularities, the senior official mentioned the sale by U.S. diplomats of duty-free alcohol and other goods to those who are not legally entitled to them and the employment of diplomatic spouses without the necessary papers or tax filings.

On Friday, India asked the U.S. Embassy in New Delhi to stop screening movies at the American Center there unless the proper licenses and certificates from Indian censors are obtained.

India has demanded that all charges be dropped against Khobragade, the 39-year-old deputy consul general in New York who was arrested Dec. 12 for allegedly filing fraudulent pay documents for an Indian employee she brought with her to this country in 2012. Reports of Khobragade’s strip search and brief incarceration inflamed Indian outrage over what New Delhi called an insulting violation of diplomatic immunity.

The State Department has tried to keep U.S.-India relations, already drifting apart following the heady days after a landmark 2008 civil nuclear agreement, from collapsing.

“The U.S. government endeavors to always be in compliance with local laws and regulations,” State Department spokeswoman Emily Horne said Monday in response to the Indian allegations. Indian diplomatic notes to the State Department “raise highly technical and complicated issues. . . . It’s also clear that there are differences of opinion about the privileges and immunities of our respective diplomatic and consular personnel.”

Although India believes it is within the Obama administration’s power to resolve the case, administration officials have repeatedly stressed that their hands are tied when it comes to legal matters. “We’re the diplomatic part that focuses on the relationship and all the issues we work together on,” spokeswoman Marie Harf told reporters at a State Department briefing. “There is a separate judicial and legal process that is working its way through right now.”

But the Indian government has said that the relationship itself is at stake.

Ties between the two countries have “been severely undermined,” Indian Foreign Ministry spokesman Syed Akbaruddin said. “This matter has a huge divisive potential in our relations with the United States.”

Many State Department officials say the strip search and the lack of warning to the Indian government was beyond the bounds of normal diplomatic courtesy. U.S. diplomats do not say, however, that Khobragade’s consular status afforded immunity outside her consular duties or that the U.S. attorney did not have the right to detain and charge her with falsifying a visa document. She is accused of submitting a contract, required by U.S. law, falsely promising to pay the housekeeper, Sangeeta Richard, the minimum or prevailing hourly wage of $9.75.

According to the charges against her, Khobragade signed a separate contract with Richard agreeing to pay her only a fraction of that amount and illegally forced her to work long hours without required benefits.

Richard ran away from Khobragade’s Manhattan home in June, sought refuge with the New York Indian community and eventually ended up with a victim assistance organization that brought her case to the attention of the U.S. attorney.

After Richard fled her home, Khobragade subsequently accused her of stealing items from the house and trying to extort support for a permanent U.S. visa. Indian government officials have provided copies of e-mail exchanges with the State Department indicating that the initial U.S. response to those charges — before Richard alleged abusive working conditions — was to cancel Richard’s visa and note that she had 30 days to leave the country.

Beyond the specifics of the case, India has presented the State Department with a document, dated Aug. 26, 2013, temporarily accrediting Khobragade to the Indian U.N. mission as an adviser through the end of December — a date that India argues would have afforded her full immunity at the time of her arrest.

Soon after the arrest, India froze the U.S. Embassy’s import of alcohol and other goods and removed security barricades from the New Delhi embassy complex, although police presence around the mission was increased last week.

The Indian official said officials in New Delhi are examining bank accounts tied to the American Embassy School, where they allege diplomatic spouses often teach without the necessary work permission and without paying taxes.

“The nub of the matter is that these are purely reciprocal steps; we expect our diplomats to be treated in the U.S. the way we treat their diplomats,” said Akbaruddin, the Foreign Ministry spokesman.

Lakshmi reported from New Delhi.