Here are the latest updates on this story:
In a strong statement, Foreign Minister Salman Khurshid vowed to "bring back the woman diplomat arrested in New York and restore her dignity. It is my responsibility."
The US has not apologised but says it is reviewing the circumstances surrounding Devyani Khobragde's arrest last week in New York, for alleged visa fraud. Sources say India wants Ms Khobragade's case to be moved from criminal to civil as it feels the alleged visa fraud makes for a civil breach of contract, not a human trafficking charge.
US State department spokesperson Marie Harf said, "We understand this is a sensitive issue for India. An isolated episode not indicative of respectful ties the two countries share. We will be looking into the arrest to ensure all procedures were followed and every opportunity for courtesy was extended.' (Read)
The 39-year-old Deputy Consul General at the Indian Consulate in New York was handcuffed on the street when she was dropping her daughter off to school last Thursday. After her arrest, she was allegedly treated like a hardened criminal.
After revelations that Ms Khobragade was strip-searched, swabbed for DNA, cavity-searched and placed in a cell with drug addicts - though other cells were available - an outraged India pared down the privileges of American diplomats and removed police barricades from outside their embassy in Delhi.(Read)
A US Congress delegation was snubbed by the government and senior leaders like Rahul Gandhi and Narendra Modi who refused to meet them. (Read)
Taken aback by India's retaliation, which was front-paged in the American mainstream media, the State Department said, "the US has told India that in no circumstance it can violate the safety of US diplomats with respect to the Vienna Convention."
As an offshoot of the diplomatic row, an embarrassing blame-game has started in the US. The US state department spokesperson said, "The State Department wasn't the only entity involved here, so I would point focus to the US Marshals who obviously play a role in this as well." The US Marshals say the state department arrested the Indian diplomat and they only followed procedure afterwards. (Diplomat's 'strip search' part of standard procedures: US marshals)
Devyani Khobragade's lawyer told NDTV, "There was an embarrassing failure of US international protocol and error of judgement." (Read)
The US has accused Ms Khobragade of lying on the visa application for an Indian national who worked at her home, paying her less than minimum wages and forcing her to work for more than 40 hours a week. (Read)