The step comes after there were allegations from Indian Consul General's domestic help about mistreating her.
According to sources, the government will also look at policies in other countries in this respect.
Meanwhile, Indian Government supported Prabhu Dayal and called the charges levied against him as "motivated and baseless" and expressed concern over Indian diplomats becoming targets in US.
"We are disappointed and surprised at the allegations against Consul General (CG) of India in New York, Mr Prabhu Dayal, by his former employee, which appear to be motivated and baseless," said Vishnu Prakash, spokesperson, external affairs ministry.
Dayal had "impeccable personal and professional integrity" and the country was "disappointed and deeply concerned that Indian diplomats and their family members should be targetted in such a manner in a friendly country like the US," said Prakash.
"Such actions impede the ability of the individuals in question to discharge their official responsibilities and cause untold mental harassment and anguish and they cannot be dismissed lightly," he said.
"The treatment being meted out to Indian diplomats or their family members, has resulted in negative public perceptions in India with attendant implications," he added.
The Indian Consul General has been accused by his maid Santosh Bhardwaj for forced labour. Rubbishing all allegations against him, Dayal called it 'complete nonsense' and 'malicious lies'.
According to him, his maid had vanished in Jan 2010 and suddenly came back accusing him of forced labour.