UPDATE 1-U.S. Energy Secretary delays India trip amid diplomatic row

Wed Jan 8, 2014 7:10pm EST

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WASHINGTON Jan 8 (Reuters) - U.S. Energy Secretary Ernest Moniz will no longer travel to India as planned next week, an official of the U.S. Energy Department said on Wednesday, the most serious repercussion yet in a row over the arrest of an Indian diplomat in New York.

"I can confirm that Secretary Moniz is no longer traveling to India next week," the official told Reuters. "We have been in conversation with Indian counterparts about the dates, and we have agreed to hold the dialogue in the near future at a mutually convenient date."

Moniz's trip is the latest and most serious casualty in an escalating row over the treatment of Devyani Khobragade, India's deputy consul in New York. India is furious at her arrest, handcuffing and strip search last month after being accused by U.S. prosecutors of underpaying her nanny and lying on a visa application.

Nearly a month on, the row has started to affect the wider relationship between the world's two most populous democracies, with one high-level visit by a senior U.S. official already postponed.

U.S. Assistant Secretary of State for South Asia Nisha Desai Biswal delayed her first visit to India, which was due on Jan. 6, to avoid it becoming embroiled in the dispute.

While both sides have said their bilateral relationship is important and will not be allowed to deteriorate, the row over Khobragade, which should not have been more than an easily resolved irritation, has plunged the two countries into a crisis described by Indian media as the worst since New Delhi tested a nuclear device in 1998.

The aim of Moniz's trip was to hold talks to promote trade and investment in the energy sector. The talks usually include discussions of civil nuclear trade between India and the United States.

The Energy Department official called the U.S.-India energy partnership a key element of the overall strategic partnership between Washington and New Delhi.

"In view of the importance of these matters to the overall bilateral relationship, we look forward to holding the Energy Dialogue at a mutually convenient date in the near future that will permit both sides to deliver concrete outcomes for both governments and our two peoples," he said.

India and the United States signed an agreement on nuclear energy cooperation in 2009, during the administration of former U.S. President George W. Bush, a high point in a relationship that is widely considered to have drifted since. (Reporting by Valerie Volcovici; Writing by David Brunnstrom; Editing by Sandra Maler)

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