(CNN) -- The arrest and detention of an Indian consular official in New York on visa fraud charges has created a diplomatic uproar, with punitive steps taken against State Department officials in New Delhi and questions being raised about what level of diplomatic immunity she was due.
Devyani Khobragade, India's deputy consul general for political, economic, commercial and women's affairs, was arrested by agents from the State Department's Bureau of Diplomatic Security on December 12 after she dropped her daughter off at school.
Pending her appearance before a federal magistrate judge, the 39-year-old woman was transferred to the U.S. Marshals Service.
Khobragade was held in a cell with other women and subjected to a strip search that included a cavity search; she posted bond and was released.
The U.S. Marshals Service said her treatment was standard procedure and that no policies were violated.
U.S. prosecutors allege in an 11-page complaint that Khobragade stated in the visa application for her housekeeper that she would pay her at least $9.75 per hour, the minimum wage in New York, and require that she work no more than 40 hours per week.
But prosecutors allege that the woman, identified as Sangeeta Richard, wound up receiving less than $3.31 per hour and was required to work far more than that during her time of service, which began in November 2012 and ended last June.
"Foreign nationals brought to the United States to serve as domestic workers are entitled to the same protections against exploitation as those afforded to United States citizens," Manhattan U.S. Attorney Preet Bharara said last week in a statement.
"The false statements and fraud alleged to have occurred here were designed to circumvent those protections so that a visa would issue for a domestic worker who was promised far less than a fair wage," he added. "This type of fraud on the United States and exploitation of an individual will not be tolerated."
Khobragade was charged with one count of visa fraud -- which carries a maximum sentence of 10 years in prison -- and one count of making false statements -- which carries a maximum sentence of five years.
Khobragade's treatment sparked outrage from Indian government officials; the allegation that she underpaid her housekeeper has drawn concern from human rights advocates.
Prime Minister Manmohan Singh called Khobragade's treatment "deplorable," and Indian National Security Adviser Shiv Shankar Menon called it "barbaric," CNN sister network IBN reported.
The top diplomat in the United States, Secretary of State John Kerry, called Menon on Wednesday.
While Kerry "expects that laws will be followed by everyone here in our country," it's important to him that diplomats "are accorded respect and dignity just as we expect our own diplomats should receive overseas," the State Department said in a statement.
"As a father of two daughters about the same age as Devyani Khobragade, the secretary empathizes with the sensitivities we are hearing from India about the events that unfolded after Ms. Khobragade's arrest, and in his conversation with National Security Adviser Menon he expressed his regret, as well as his concern that we not allow this unfortunate public issue to hurt our close and vital relationship with India."
Asked whether Kerry regretted what happened in New York or the response to it in India, State Department spokeswoman Marie Harf said, "Regret on the situation at large, I would say both, honestly. He certainly expressed regret about what happened with this case at large, sort of how this has all played out."
She added that the arrest should not have come as a surprise; U.S. authorities notified the Indian Embassy in September about the allegations against Khobragade.
President Barack Obama has been briefed on the issue, and "the safety and security of our diplomats and consular officials in the field is a top priority," White House spokesman Jay Carney said.
Barriers removed from embassy
Indian officials have summoned U.S. Ambassador Nancy Powell, taken away U.S. diplomats' identification cards that give them diplomatic benefits and removed security barriers outside the U.S. Embassy in New Delhi.
"It's a very dangerous move," said Nicholas Burns, former undersecretary of state for political affairs and a longtime diplomat. "It's an overreaction and not the appropriate response, obviously," he told CNN.
But a spokesman for India's External Affairs Ministry said security had not been affected.
"Let me assure you that there is no change in the security situation as regards to any diplomats in India, including U.S. diplomats," Syed Akbaruddin told a reporter. "India is fully committed to ensuring the safety and security of all diplomats in Delhi and elsewhere. So, please do not have any doubts on that score; we will provide full safety and security within the confines of India law."
Several senior government ministers and politicians snubbed a visiting congressional delegation.
"I think we have taken a tough stand. We do protect our foreign service officers and any other Indian that is unfairly treated outside," said Deputy Foreign Minister Preneet Kaur. "And I think, in the strongest diplomatic way we can take it up, it is being done."
The U.S. State Department sought to prevent tensions from escalating further, while admonishing the Indian government on the punitive measures.
Spokeswoman Harf said appropriate procedures appeared to have been followed in the arrest by U.S. marshals, but that conditions surrounding Khobragade's processing would be examined.
"We are looking into the intake procedures surrounding this arrest to ensure that all appropriate procedures were followed and every opportunity for courtesy was extended," Harf said.
She said the United States and India "enjoy a broad and deep friendship, and this isolated episode is not indicative of the close and mutually respectful ties we share."
But Harf said Khobragade's arrest should not be cause for a diplomatic tit-for-tat.
"This limited episode was somebody who was charged with a crime, is a separate and isolated incident," Harf said. "We have conveyed at high levels to the government of India our expectations that India will continue to fulfill all of its obligations under the Vienna Convention," she said, referring to the treaty that sets out a framework for diplomatic relations.
Harf said that Khobragade enjoys "consular immunity," a limited diplomatic immunity related to her official duties. Under the 1963 Vienna Convention on Consular Relations, consular officials can be arrested for acts committed outside official job functions.
The State Department says Khobragade's consular immunity does not cover the kind of crimes she is charged with.
The world of diplomatic immunity is complex and murky. U.S. guidelines say consular officers, such as Khobragade at the time of her arrest, have some immunity involving official acts, but when it comes to personal activities, their "inviolability" is "quite limited."
Khobragade's lawyer, Daniel Arshack, said that she is entitled to diplomatic immunity and can't be prosecuted under U.S. law, CNN's Indian sister network IBN reported. He did not immediately respond to a telephone call from CNN.
The Marshals Service said in a statement that she had been "subject to the same search procedures" as other arrestees and "held within the general prisoner population" in a cell with other women while awaiting court proceedings.
The statement said the service had reviewed her treatment and determined that her "intake and detention" were in accordance with its policies.
Concerns about domestic workers
Human Rights Watch, a New York-based advocacy group, acknowledged concerns over strip-searches in the U.S. justice system, but focused instead on the treatment of domestic workers.
"The common practice in the U.S. of strip-searching people who the police take into custody raises important human rights questions about treating individuals with dignity and respecting their privacy," said Nisha Varia, a senior researcher in the group's women's rights division.
"But other human rights issues at hand -- the allegations that Khobragade took advantage of her domestic worker -- remain," Varia said in a posting on the group's website.
"Despite wide coverage of the case in India, there has been little public outrage or shame that Devyani Khobragade, India's deputy consul general in New York, who has championed women's rights in other settings, allegedly paid her domestic worker a fraction of New York's legal minimum wage," Varia wrote.
She noted that Human Rights Watch has documented mistreatment of domestic workers across the globe.
"They often face underpayment and long working hours with little hope of redress," she wrote. "Diplomats from many countries who abuse their workers have often used their status to skirt the law."
Khobragade's father, Uttam, insisted that she is innocent. "My daughter has not done any wrong," he told IBN on Tuesday.
Dana Sussman, a lawyer for the housekeeper, said the issue goes beyond a labor dispute. "Our clients who work as domestic workers are living in the home with their employers," she said. "So, if they leave, they not only leave their legal status, they leave their only source of income, they leave the only home that they've known in a foreign country."
She said Richard has no passport, is living with friends and has been granted temporary legal status that allows her to remain and work in the United States until the matter is resolved.
Adding complexity to the case, the Indian government says Khobragade's housekeeper "absconded" in June.
The Delhi High Court issued an injunction in September seeking to stop Richard from "instituting any actions or proceedings against Dr. Khobragade outside India on the terms or conditions of her employment," the Indian Embassy said last week in a statement.
It said the U.S. government had been asked to find her "and facilitate the service of an arrest warrant, issued by the Metropolitan Magistrate of the South District Court in New Delhi."
CNN's Tom Watkins, Harmeet Shah Singh and Susan Candiotti contributed to this report.