The widely publicised American actions caused outrage in India and strained bilateral ties in ways not seen in recent years, especially since the two countries developed a special relationship following their civil nuclear deal.
She was acted on by US prosecutors after her maid, Sangeeta Richard, complained to human rights bodies that she was being ill-treated and underpaid.
Khobragade was arrested when she had gone to drop her daughter to school in Manhattan, and reported that she was handcuffed and humiliated like a common criminal, a fact that was denied by the office of the prosecutor, Indian American Preet Bharara.
She was later released on bail bonds.
According to officials, the American diplomat, who was asked to leave, helped the housemaid Sangeeta Richard's husband and two children to fly to New York two days before Khobragade's arrest.
The sources said that they were taken to the US despite the fact that there was a police case against Richard's husband in a Delhi court.
The US embassy not only quietly helped them fly, but also helped in granting full residency in the US to the domestic help's family, the sources added.
External affairs ministry spokesperson Syed Akbaruddin had earlier said that Khobragade had been given a G1 visa with full diplomatic immunity after she was transferred from the Indian consulate in New York to its permanent mission at the United Nations, and was on her way back to India.
Prosecutors said that after Khobragade was indicted, US officials asked India to waive her immunity so that she could be prosecuted.