However, U.S. sources in New York on Tuesday let it be known that there was no question of withdrawing the case against Ms. Khobragade.

U.S. Ambassador Nancy Powell on Tuesday used a New Year message to express regret for “the circumstances” of the arrest of Indian Deputy Consul-General Devyani Khobragade even as the two countries continued to stick to their positions on the issue.

Ms. Powell, who along with other U.S. diplomats have lost extra privileges enjoyed by them, hitherto in India’s retaliatory action, said she joins “Secretary Kerry in expressing our regret for the circumstances of the consular officer’s arrest, but we believe that we can look forward to continuing to expand our bilateral relations”.

Referring to various “impressive developments” between India and the U.S. in an wide-range of areas, she said, this “forward movement has been jolted by very different reactions to issues involving one of your consular officers and her domestic worker”.

India has been consistently demanding the case be withdrawn unconditionally against Ms. Khobragade, the 39-year-old 1999-batch IFS officer who was arrested on December 12, 2013 on the charges of underpaying her maid and falsifying the contract documents.

The diplomat’s arrest and subsequent treatment had sparked an outrage in India which demanded an apology and dropping of all charges against her.

However, U.S. sources in New York on Monday let it be known that there was no question of withdrawing the case against Ms. Khobragade. In fact, they will proceed with indicting her by the January 13, 2014 deadline.

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