Indian diplomat Devyani Khobragade has been transferred to the permanent mission in New York, which entitles her to full diplomatic immunity.
This comes just after Prime Minister Manmohan Singh called her treatment by the US "deplorable" and the government asserted in Parliament that India will take strong steps to ensure the return of the 39-year-old diplomat, reports NDTV.
On Tuesday Devyani was arrested, strip-searched and put in a cell with criminals in the US.
Following the incident, Indian government downgraded US diplomats’ privileges on Wednesday.
The Indian government asked all US consular officers to turn in their identity cards and the entire American diplomatic corps their airport passes while senior Congress leaders snubbed a visiting US Congressional delegation for the second straight day by refusing to meet it.
The Indian government also ordered the Delhi Police to remove concrete barricades on public land and roads that have existed for years around the US embassy.
The approach of the arrest of Indian diplomat on Tuesday has set off a trigger for which a diplomatic pandemonium has started with retaliatory steps taken against the US diplomats based across the country, reports The Hindu.
Key information such as salaries paid to all Indian staff employed at the consulates and by Consulate officers and families including as domestic helps has also been sought by the government apart from visa and other details of all teachers in US schools and pay and bank accounts of Indians in these schools.
Government has also stopped all import clearances including for liquor for the US embassy.
The government’s action was backed by the Bharatiya Janata Party (BJP), which urged the Centre to “match each and every step of the US, to take serious action in this matter to establish Indian sovereignty and prestige of its diplomatic community.’’ Talking to news personnel, BJP leader Ravishankar Prasad also took a dig at the government by saying the US’ actions do “not accord to the level of friendship that the Indian government claims to have with the US’’.