U.S. energy secretary Ernest Moniz will not travel to India as planned next week, an energy department official said on Wednesday, the most serious repercussion yet in a dispute over the arrest of an Indian diplomat in New York.
Mr Moniz's trip is the latest and most serious casualty in an escalating row over the treatment of Devyani Khobragade, India's deputy consul general in New York.
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India is furious at her arrest, handcuffing and strip-search last month after she was accused of visa fraud and of paying her maid less than a third of New York's legal minimum wage.
"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," the U.S. energy department official told Reuters.
The row has started to affect the wider relationship between the world's two most populous democracies, with one high-level visit by a senior U.S. official already postponed.
U.S. assistant secretary of state for South Asia Nisha Desai Biswal delayed her first visit to India, which was due on January 6, to avoid it becoming embroiled in the dispute.
Meanwhile, the huge swimming pool and sports club at the U.S. embassy in New Delhi – the social heart of expatriate life in India's capital, especially during the long, murderously hot summers – has also become embroiled in the affair.
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The oasis is about to close to non-diplomats, the victim of the deepening row between the two countries. India's government has ordered the U.S. embassy to cease "all commercial activities", dismaying the families who flock to the pool of the American Community Support Association when temperatures get stuck at nearly 45C for weeks on end.
India is still seething over the treatment of Ms Khobragade, 39, a mother of two, who was arrested last month while dropping her children off at school then subjected to a strip-search, an act that outraged many Indians.
As Indian politicians expressed mounting anger, John Kerry, U.S. secretary of state, called the country's national security adviser to express "regret" for the arrest. But the two governments – who have been trying to forge a new "strategic partnership" in recent years – are still struggling to find a way out of the unexpected crisis.
Salman Khurshid, India's foreign minister, has denied that Indian government is seeking retribution against the U.S. community. "We're not hostile [to them]," he said. "This is an arrangement based on reciprocity."
Indian officials say ACSA's tax-free sale of pizza, burgers, beer and other food and beverages is a violation of the Vienna Convention on Diplomatic Relations, as it allows all expats to benefit from privileges intended only for diplomats.
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India is trying to transfer Ms Khobragade to the UN, where she would have the full diplomatic immunity that authorities said would not apply to her in her previous post. However, she is still awaiting state department approval of the move.
Meanwhile, Preet Bharara, U.S. attorney for the southern district of New York, has a deadline of January 13 to file charges in the case but lawyers for the diplomat have appealed to the court for a one-month extension, which they say would help facilitate ongoing negotiations to resolve the matter. Mr Bharara has reportedly opposed the granting of any extension.
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The two sides have held talks in recent weeks over a possible plea deal to resolve the matter. In a letter to the court, the U.S. attorney's office said there had been "hours of discussion" over a possible plea deal, and that as recently as this weekend, the government had "outlined reasonable parameters for a plea that could resolve the case, to which the defendant has not responded."
In a city with few public recreational facilities, ACSA and its pool have been a haven for expats working for western companies.
Along with ordering the U.S. embassy to cease commercial activities by January 16, U.S. diplomatic vehicles could face action for traffic and parking infractions.