In an editorial titled 'India-America Relations on Edge', the New York Times said the "unfortunate episode" is a reminder that while both nations are democracies, neither can avoid the hard work necessary to make the relationship work.
"The case has exposed differences between the two countries over such basic concepts as fairness and equality, while revealing a troubling level of Indian animosity toward the United States," it said.
"But her case and the issues it raised are not resolved, and the damage to India-America relations is unlikely to dissipate soon," the editorial said.
"Even so, the case might have been handled better."
While the US cannot ignore laws that mandate how workers should be paid and that they be treated fairly, the editorial said federal prosecutors have "wide discretion".
Before beginning the criminal investigation, the State Department could have urged India to "reassign Khobragade to New Delhi and required her to make restitution", it said.
"America should also re-examine its own demands for special privileges for its diplomats overseas. More broadly, the case has exposed differences between the two countries over such basic concepts as fairness and equality, while revealing a troubling level of Indian animosity toward the United States," the editorial said.
Even as governments of both nations try to turn the page by resuming high-level meetings, "it will take more than that to achieve the global strategic partnership with India that President Obama has boasted about", it said.
India, its "passions fanned by election-year politics", pushed back hard at what many Indians said was American arrogance. Indian authorities removed security barriers at the American Embassy in New Delhi, cancelled the embassy's food and alcohol import privileges and "engaged in other fits of pique", it said.
The editorial added that Khobragade has been hailed in India "as a symbol of Indian pride", with her father talking of running for public office.
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