A diplomatic spat between the U.S. and India, the world's two most populous democracies, is certainty something to watch but not fret about for now, analysts say.
The arrest and strip-search of an Indian diplomat in New York last month has soured U.S.- Indian relations, prompting the postponement of two India trips by senior U.S. officials and another by a U.S. business delegation.
"U.S. relations are one of the closest economic ties India has, so current developments are worth watching," said Rahul Bajoria, a regional economist at Barclays. "In the IT sector and the goods sector, there is significant trade surplus that India generates from U.S. firms, which needs to be kept in mind when considering any fallout from this incident."
On Thursday, Indian envoy Devyani Khobragade was asked to leave the U.S. as part of a deal in which she was granted diplomatic immunity from charges of visa fraud and lying about how much she paid her housekeeper.