India seeks possible US tax violations as stand hardens in diplomat row

India has sought details about staff in American schools in the country for possible tax violations and revoked ID cards of US consular officials and their families, retaliatory steps for the arrest of an Indian diplomat in New York on criminal charges.

The measures suggest that the two countries are no closer to a resolution of a diplomatic dispute over the treatment of Deputy Consul General Devyani Khobragade this month on charges of visa fraud and underpayment of her housekeeper.

Khobragade, who has denied the charges, was handcuffed and strip-searched while in custody despite informing US marshals about her diplomatic immunity, sparking outrage in India.

An Indian government official said on Friday that New Delhi had asked the US embassy to provide details about people working in American schools and other US government facilities to determine if they had permission to do so and if they were paying taxes that are mandatory under Indian law. Diplomats' spouses who take up work in schools or other embassy facilities are supposed to inform the host country.

Violations of this kind had often been ignored, but now India would not turn a blind eye, the official said, speaking on condition of anonymity. The US embassy declined to comment on the latest steps.

India had also withdrawn some privileges US diplomats and their families enjoy and would treat them as Indian officials are treated in the United States, the Indian official said.

Since the bilateral blow-up, US ambassador Nancy Powell has been refused special privileges at New Delhi airport.

"We have said all access is on a reciprocal basis," the government official said. "She is not going to get the benefits that the Indian ambassador in US doesn't get."

US consular officials and their families have been asked to surrender identity cards that gave them a degree of immunity. Under a new regime, consular officials - but not their families - will be given identity cards with fewer privileges.

"Spouses and children have no more immunity. So if there is a parking offence or ... something else happening in Bangalore etc, they would be held liable," he said.

Khobragade was released in New York on $250,000 bail after giving up her passport and pleading not guilty to visa fraud and making false statements about how much she paid her Indian housekeeper.She faces a maximum of 15 years in prison if convicted on both counts.

India has demanded that the charges be dropped and that the United States apologise for not respecting her immunity.

In a new twist, India now argues that Khobragade was accredited to the United Nations at the time of her detention, giving her immunity from arrest. She was temporarily moved to India's UN mission in August to help with the workload ahead of the General Assembly session and a visit by the prime minister. A copy of her accreditation, made available to Reuters, lists her as an adviser for a period from Aug. 26 until Dec. 31.

"At no stage we were told by the US side what was going on. We were kept in the dark. A lot of these things could have come out had we been informed then," the official said, explaining that India had not been warned she might be arrested. He said that even when Khobragade was posted to Islamabad she had not encountered such treatment, despite the hostility between India and Pakistan.