Devyani Khobragade
Devyani Khobragade Row: Court Throws out Indictment Extension Plea as India Cancels Energy Talks Official Twitter

A US court has refused to extend the indictment deadline for Devyani Khobragade, the Indian diplomat at the centre of an escalating spat between New Delhi and Washington, while India cancelled pre-scheduled energy talks with the US energy secretary.

Rejecting Khobragade's request to extend the January 13 deadline for a preliminary hearing in a visa fraud case for which she was arrested in December, US district judge Sarah Netburn said the plea failed to establish "good cause".

India-born activist US attorney Preet Bharara, who has drawn flak for coming down heavily on Indians and south Asians, had earlier opposed Khobragade's request for the extension of the deadline for formally charging her.

The court's decision will deal another blow to efforts to resolve the crisis, and the diplomat's lawyer Daniel Arshack said the issuance of an indictment would be a "polarising event".

What Next for Devyani?

He told the Press Trust of India the defence was considering all options. In her plea for the postponement of the indictment, the diplomat had said the impending deadline was affecting her ability to engage in discussions with the government on resolving the case.

Opposing the request, Bharara had said the discussions could continue even after the indictment, which was mandatory within 30 days of the arrest.

Stepping up pressure on the US government in the run-up to the indictment, India said on Wednesday the American diplomatic mission in New Delhi has to shut down the commercial activities taking place in its premises.

This was the latest in a series of retaliatory measures announced by India including the removal of security barricades around the US mission in New Delhi and the stripping off special indentify cards for the foreign service personnel.

The arrest of Khobragade, who was accused of committing fraud in US visa application for her maid and underpaying her, triggered rare and forceful reaction from India, letting what began as a diplomatic spat snowball into a serious crisis in bilateral relations.

Khobragade, who was arrested in public and handcuffed, said she was later strip-searched and put up with criminals and drug peddlers in a cell.

India took a tough line from early on and demanded the withdrawal of the case and a formal apology from the US. The US prosecutors, however, said the case against her could not be dropped.

India later moved Khobragade to the country's permanent mission in the UN, which would ensure full diplomatic immunity to her. The US State Department has to sign off on the move to the UN to enable her to get the G-1 visa, but the prosecution has said full immunity would not be granted to her for a crime committed previously.

India last week told the US envoy to the country, Nancy Powel, that bilateral relations had slumped to a point where business as usual was not feasible. The cancellation of talks with US Energy Secretary Ernest Moniz next week confirms New Delhi is raising its stake in the ugly confrontation.

"I can confirm that Secretary Moniz is no longer travelling to India next week. We have been in conversation with Indian counterparts about the dates, and we have agreed to hold the dialogue in the near future at a mutually convenient date," an energy department spokesperson said, according to the CNN.

The Indian side had clearly said "no" to the energy delegation's visit, despite the fact that the talks were crucial in India's efforts to get access to more natural gas supplies, the local media reported.