India has indefinitely postponed an energy dialogue with the United States that was set to take place next week, after a federal judge denied Devyani Khobragade's request to extend the 13 January deadline for a preliminary hearing, the date she will be indicted.
The India-US energy dialogue that was going to be led by US energy secretary Ernest Moniz was expected to make a significant progress in the US-India co-operation and was to take forward a deal on the export of American shale gas to India.
State Department spokesperson Jen Psaki told the Press Trust of India that the visit will be rescheduled for a mutually convenient date and that the upcoming trip shall remain cancelled in view of the strained relations between the two countries.
"We place great emphasis, as you know, on the US-India energy partnership. It was an issue when the Secretary (of State, John Kerry) was there, and he even gave a speech talking about these issues - a key element of our strategic partnership," Psaki told the news outlet.
"In view of these important matters and in order to find the time to allow both sides to deliver on the important issues that we need to from both sides, we're looking for a mutually convenient time in the near future that will permit both sides to do that."
While Washington appears to be trying to imply that the decision was a mutual one, it is clear that the event comes as a result of the row and the mounting pressure India has put on the US to withdraw the Khobragade case.
Official word on the cancellation of the crucial energy dialogue comes only hours after Magistrate Judge Sarah Netburn of the U.S. District Court for the Southern District of New York denied the adjournment of the date of her hearing.
This comes at the heels of a series of many retaliatory measures against the United States. New Delhi announced on Wednesday that non-diplomats will no longer be allowed to use the facilities in a club at its Delhi embassy and ordered to stop "commercial activities on its premises" adding that embassy cars from now on will be penalized for traffic offences.
Stepping up pressure on Washington ahead of the court appearance, US diplomats in consulates across the country were denied their special privilege ID cards while their airport passes and import clearances were also stripped off, making all diplomats liable to be frisked in airports.
The cancelled Energy Secretary's visit for the Energy Dialogue was considered a critical one after Obama and Singh met at a summit in the White House in September last year. Both the leaders had agreed that energy sector was a major pillar for the advancement of the strategic US-India relationship.