Tensions between the two countries "have eased" with the return home of Devyani Khobragade, India's then deputy consul general in New York, whose arrest and strip search over charges of visa fraud and mistreating her domestic worker, sparked the row, the New York Times noted.
"But her case and the issues it raised are not resolved, and the damage to India-America relations is unlikely to dissipate soon," the influential daily said in an editorial titled "India-America Relations on Edge."
Tensions between the two countries "have eased" with the return home of Devyani.
"This unfortunate episode is a reminder that while both nations are democracies, neither can avoid the hard work necessary to make the relationship work," it said.
Recounting the circumstances of Khobragade's arrest and the retaliatory steps taken by India, the Times acknowledged "the case might have been handled better."
"The United States cannot ignore laws that mandate how workers should be paid and that they be treated fairly," it said.
"But federal prosecutors have wide discretion, and the State Department, before the criminal investigation, could have urged India to reassign Ms. Khobragade to New Delhi and required her to make restitution," the Times suggested.
"The United States has to make sure that foreign diplomats understand American laws, although the indictment says that this defendant knew exactly what she was doing," the daily said.
At the same time, "America should also re-examine its own demands for special privileges for its diplomats overseas," the Times said endorsing the Indian stand that diplomatic privileges cannot be a one-way street.
"More broadly, the case has exposed differences between the two countries over such basic concepts as fairness and equality, while revealing a troubling level of Indian animosity toward the United States," it said.
Noting that the "two governments are trying to turn the page by resuming high-level meetings," the Times said "it will take more than that to achieve the 'global strategic partnership' with India that President (Barack) Obama has boasted about."