"This storm has blown us temporarily off course," former diplomat Frank Wisner said in an interview. He added that Americans treated the case inappropriately, while India reaction was emotional.
A 1999-batch IFS officer, Khobragade, India's Deputy Consul General in New York, was arrested on charges of making false declarations in a visa application for her maid Sangeeta Richard. She was released on a USD 250,000 bond.
The 39-year-old diplomat was strip searched and held with criminals, triggering a row between the two sides with India retaliating by downgrading privileges of certain category of US diplomats among other steps last month.
"The position that we have got into is deeply regrettable and I hope that the two sides could come to an early solution. It can only be done quietly in discussions with qualified diplomats," Wisner said.
Wisner said the relationship between the two countries is too important to be derailed by this arrest.
A retired US diplomat and a well know South Asian expert, Teresita C Schaffer also blamed both India and the US for the current impasse.
"The charges involved a serious offense and one that had arisen in the past as well. The treatment of Ms Khobragade was unnecessarily provocative and offencive. India's response was dangerous," Schaffer told PTI.
"The United States has always drawn a distinction between diplomatic and consular immunity (as indeed the Vienna Conventions do). The US considered this a serious offence, and there were at least two recent cases where Indian consular officials were charged with the same offence," she said.
"Other options might have included a formal legal complaint involving payment of fines and/or back wages, asking for her withdrawal, or, in an arrest did occur modifying the search protocols," Scaffer said.
Schaffer said the Indian government could also have handled the case differently.
"The Indian Embassy and Ministry of External Affairs knew that this kind of issue is trouble in the United States (there had been two recent cases involving other consular officials), she said.
"I have no problem with India enforcing reciprocity on consular immunity and changing the ID cards of US consular officials in India", she said.
"But some of the other measures were really courting disaster, and had no relationship to the underlying incident", she added.
"I'm thinking in particular of dismantling the security barriers in front of the US embassy in Delhi. An incident involving injury or damage, or worse death, under those circumstances would really have serious consequences for both countries," Schaffer said.
"In this case there is much less substance involved, but still the grievances and misdeeds of the past are eagerly raked up, and the press is happy to report these," Stephen P Cohen, senior fellow at the prestigious Brookings Institution, told PTI.
However, he felt it is unlikely to have much impact on Indo-US relationship in the long term.
"On both sides, there are far more important issues uniting (and dividing) India and the US, and Indians and Americans, than this," Cohen said.