A federal judge in New York has dismissed the case against Devyani Khobragade, whose arrest and strip search on charges of visa fraud frayed the US-India relations. But prosecutors hinted that they may file a new indictment based on claims that she exploited her Indian housekeeper.

Khobragade, who was serving as India’s deputy consul-general in New York, had diplomatic immunity on January 9 when she sought to dismiss the indictment, and could, therefore, not be prosecuted, US District Judge Shira Scheindlin in New York ruled on Wednesday.

But Judge Scheindlin left open the possibility of a fresh indictment being filed against Khobragade and federal prosecutors said they “intend to proceed accordingly.” “If the acts charged in the indictment were not ‘performed in the exercise of official functions,’ then there is currently no bar to a new indictment against Khobragade,” Judge Scheindlin wrote.

‘No bar on new indictment’ If the acts charged in the indictment were not ‘performed in the exercise of official functions,’ then there is currently no bar to a new indictment against Khobragade.~ - US District Judge India hails ruling We welcome this ruling, which dismisses the January 9 indictment against Khobragade and vacates any arrest warrant in the existing case. Given the importance both sides attach to their bilateral strategic partnership, the government hopes to see further progress in this matter in a manner consistent with international norms and conventions. - An MEA spokesman The case Prosecutors had accused Khobragade of lying on her maid’s visa application to the State Dept Promising to pay her $9.75 an hour, she was paying her $3.31 an hour Khobragade was arrested in New York on December 12 and strip searched The arrest created an uproar in India

James Margolin, a spokesman for US Attorney Preet Bharara in Manhattan, said: “As the court indicated in its decision, and as Devyani Khobragade has conceded, there is currently no bar to a new indictment against her for her alleged criminal conduct and we intend to proceed accordingly.”

Khobragade’s lawyer, Daniel Arshack, told The Tribune that while “technically, the prosecution remains free to re-indict Dr Khobragade. However, the decision to do so would be viewed as an aggressive and unnecessary act.”

Prosecutors had accused Khobragade of lying on her maid Sangeeta Richard’s visa application to the State Department by promising to pay her $9.75 an hour, but instead paying her $3.31 an hour, well below the U.S. minimum wage.

Khobragade was arrested in New York on December 12 and strip searched. The arrest created an uproar in India. Bharara said Khobragade had been accorded courtesies well beyond what other defendants are accorded. He denied reports that Khobragade had been arrested in front of her children or handcuffed.

Bharara said arresting officers did not seize Khobragade’s phone, as is the usual practice, and she was allowed to make numerous phone calls from the officers’ car as it was cold outside. The officers even brought her coffee and offered to get her food, Bharara said.

He acknowledged that Khobragade had been strip searched but said this was done in private by a female deputy marshal and is standard practice to ensure that the prisoner does not have anything on his or her person with which harm can be done to anyone, including the prisoner.

Indian officials were outraged and said the arrest violated Khobragade’s diplomatic immunity. National Security Adviser Shivshankar Menon called her treatment “despicable and barbaric.”

At the time of her arrest, US prosecutors said Khobragade’s status as a consular officer did not provide her full diplomatic immunity and that she was only protected from arrest in the case of acts related to her official work.

Prosecutors had argued that the indictment should stand because she did not have full diplomatic immunity when she was arrested or now that she has left the US. Khobragade is currently working at the Ministry of External Affairs in New Delhi.

Indian officials disagreed with the prosecutors’ interpretation of diplomatic immunity and the Indian government moved to transfer Khobragade to its United Nations mission in New York. Such a move would provide full diplomatic immunity.

The State Department approved the re-accreditation request on January 8 and then asked New Delhi to waive this immunity in order to proceed with the criminal case against Khobragade.

On January 9, India informed the US that it would not waive Khobragade’s immunity and issued an order transferring her to the Ministry of External Affairs in New Delhi.

Khobragade was indicted on January 9 by a federal grand jury on one count of visa fraud and one count of making false statements to the government. She then filed a motion to dismiss the charges.

Explaining her order, Judge Scheindlin wrote that Khobragade’s appointment to the UN “cloaked her with full diplomatic immunity” on January 9.