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UPDATE 1-India foreign minister and Kerry discuss diplomatic row

Wednesday, 22 Jan 2014 | 3:23 PM ET

(Adds U.S. comment, background)

NEW DELHI, Jan 22 (Reuters) - The United States and India could soon reschedule a visit by the U.S. energy secretary that was cancelled because of a diplomatic row, New Delhi said after foreign minister Salman Khurshid met his counterpart U.S. Secretary of State John Kerry on Wednesday.

"Both sides looked forward to the early realization of the mutually-agreed calendar of bilateral exchanges," India's foreign ministry said in a statement after the two men met in Montreux, Switzerland, on the sidelines of a Syrian peace conference.

The statement mentioned a visit by Ernest Moniz, the U.S. energy secretary, who postponed his trip to India earlier this month because of a dispute over the arrest and strip search of an Indian diplomat in New York on charges of visa fraud and lying about how much she paid her housekeeper.

The meeting between Kerry and Khurshid was the highest level exchange since the spat.

In December, Kerry expressed regret for the incident in a phone call to India's National Security Adviser. He also tried to call Khurshid, but could not reach him.

No firm timeline was given for Moniz's trip to India.

"They discussed their shared commitment to moving the relationship forward and returning to close partnerships on strategic, security and economic issues," a senior State Department official said, describing the meeting between the two men as brief.

The dispute plunged ties between the friendly nations to the lowest point in 16 years before a deal was struck and the diplomat, Devyani Khobragade, returned to India.

Relations have still not returned to normal, and Khurshid made a point of questioning Kerry about the use of visas reserved for human trafficking cases to evacuate the housekeeper's husband and children from India.

The statement also said "outstanding issues" related to privileges and immunities of diplomats in both countries were discussed.

India sharply curtailed privileges granted to U.S. diplomats stationed in the country after the arrest, to bring them on a par with the treatment of Indian diplomats in the United States.

(Reporting by Frank Jack Daniel in New Delhi and Lesley Wroughton in Montreux; Editing by Marguerita Choy)