A grand jury in Dallas County, Texas, on Friday returned several charges, most notably capital murder, against Sherin's foster father Wesley Mathews.
The 37-year-old man from Kerala is accused of killing Sherin in October last year.
The indictment says Wesley killed Sherin "by a manner and means unknown to the grand jury," court records show.
The indictment for capital murder states that Wesley used a deadly weapon. The tampering with evidence indictment claims he altered, destroyed and concealed a human corpse with intent to impair evidence for a later police investigation.
Wesley was arrested on October 7 and charged with felony injury to a child, which carries a sentence of up to life in prison, after Sherin's body was found on October 22 in a culvert in suburban Dallas by a cadaver dog after an intense search.
Initially, Wesley told police that he put her outside their home at 3 AM to discipline her for not drinking her milk.
His story changed after her body was found in a culvert, telling police that he "physically assisted" with pouring the milk down Sherin's throat and then moved her body after he realised she had choked and died.
Prosecutors in Dallas will decide in the coming weeks whether to seek the death penalty against Wesley, CNN reported.
Authorities were tight-lipped at a press conference on Friday, saying they did not want to prejudice a jury and were continuing to investigate the case that attracted much global attention and led to tightening of India's child adoption policy.
"We do want to make certain justice is done on behalf of this little 3-year-old," said District Attorney Faith Johnson. "We will be seeking justice on her behalf."
"We are going to be the voice for her in this offense, and do all we can to make sure the fair and just thing is done," said Mr Johnson.
The Dallas County Medical Examiner's office said last week that while Sherin's manner of death was homicidal violence, her exact cause of death could not be determined because of extensive decomposition.
Mr Johnson said the result of the autopsy led them to file the capital murder charge. "We have some information as to what might have happened," Johnson said. "But we are still investigating, looking into the facts, trying to make our case look better, and get better as we research, investigate and prepare for trial."
Despite the limited details about what actually happened to Sherin, Mr Johnson said she's confident her team will be able to get justice.
"We plan to be very tenacious, persistent, prosecute this case to the fullest, do the best we can," Mr Johnson said.
The medical examiner has ruled that Sherin died from "homicidal violence" but did not release additional details.
"Based on the autopsy report we were able to determine we could seek capital murder in this case," Mr Johnson said.
The capital murder indictment against Mathews was a new development in the case, Fox4News.com reported. Wesley previously was charged with injury to a child, a first-degree felony punishable with a maximum 99 years in prison.
Friday's indictment adds abandoning a child and tampering with evidence, second-degree allegations punishable by two to 20 years in prison.
Sherin's adoptive mother, Sini Mathews, 35, faces one count of abandoning a child. That stems from the couple's decision to leave the girl at home on October 6 while they went out to dinner with their biological child, according to the indictment. Sini, a registered nurse, has maintained her innocence.
Autopsy results were pending for several months before the Dallas County medical examiner's office on January 3 ruled Sherin's death a homicide. It did not offer many details on what might have caused Sherin's death.
But in March, several months before her death, a doctor found multiple healing fractures on the child.
The doctor contacted the Child Protection Services after finding multiple fractures in various stages of healing.
Sherin suffered injuries to her upper-arm bones and fractures in her leg bones that were in various stages of healing, according to a court testimony.
The doctor, Suzanne Dakil of the Referral and Evaluation of At Risk Children Clinic, testified at a custody hearing involving the couple's biological daughter that she suspected Sherin had been injured at the hands of her parents.
"I had no explanation other than this that child had been physically abused," Ms Dakil had testified.
The Indian government has barred the operations of Holt International, the US adoption agency involved in placing Sherin with the Mathews family.
The firm said it has followed all national and international laws and best practices during the adoption process.
Richardson Police Chief Jim Spivey said he is "pleased that we have reached this stage" after the indictments against the parents were announced.
"It has been a very intensive case for the Richardson Police Department," he said.