New York (CNN) -- Devyani Khobragade, the Indian diplomat at the heart of a dispute that has strained ties between New Delhi and Washington, is on her way back to India from the United States, officials said.
American authorities' arrest and strip-search of Khobragade, the Indian deputy consul general in New York, set off a storm of anger in India last month.
U.S. prosecutors accuse her of lying in a visa application about how much she paid her housekeeper. She was indicted this week by a federal grand jury on one count of visa fraud and one count of making false statements.
But the Indian government denied a request by the State Department to waive Khobragade's diplomatic immunity so she can answer the charges, U.S. and Indian officials said.
India said Friday that it had transferred her to the Ministry of External Affairs in New Delhi.
"At the time of her departure for India, Counsellor Khobragade reiterated her innocence on charges filed against her," the ministry said in a statement. She is expected to arrive in India on Friday.
Tensions have escalated between India and the United States over the December arrest and treatment of Khobragade, with New Delhi demanding Washington apologize and drop charges accusing her of lying on a visa application for her former housekeeper.
Federal prosecutors allege Khobragade promised in the visa application under which her housekeeper moved from India to the United States to pay her at least $9.75 per hour, the minimum wage in New York, and to require she work no more than 40 hours per week.
They allege that Khobragade then had the housekeeper, Sangeeta Richard, sign a second contract, which paid her less than $3.31 per hour and required that she work much longer hours.
Khobragade's lawyers have repeatedly said she is not guilty and is entitled to diplomatic immunity.
"She is pleased to be returning to her country," her attorney Dan Arshack said Thursday. "Her head is held high."
Arshack said Khobragade and her legal team were pleased that the State Department had done "the right thing" Thursday by recognizing her diplomatic status.
U.S. officials had previously said Khobragade was entitled to consular immunity, which is less broad than diplomatic immunity and covers only actions carried out under official duties.
Khobragade was India's deputy consul general for political, economic, commercial and women's affairs.
Pressure from New Delhi
India has expressed outrage over the arrest of Khobragade, who was handcuffed and strip-searched by federal agents on December 12 after a complaint filed by Richard.
Secretary of State John Kerry expressed "regret" about the situation last month, but stopped short of saying authorities had done anything wrong.
U.S. law enforcement officials have said that Khobragade's strip-search was standard procedure and that she received a number of privileges not usually accorded to defendants.
Amid the uproar, Indian authorities removed concrete barriers from outside the U.S. Embassy and took away American diplomats' identification cards.
That was followed recently by an order that the United States shut down "commercial activities" at a recreational facility at the U.S. Embassy in New Delhi.
The U.S. Embassy should halt the activities at the property by January 16, an Indian external affairs official said Thursday. The property houses a bowling alley, swimming pool and gym.
The multipurpose club in the embassy compound was used by nondiplomats, Indian officials said, accusing the U.S. of contravening an article of the Vienna Convention.
Khobragade's father supported India's order that the U.S. Embassy shut down what it said were commercial activities on the mission's premises.
"The charges against her are atrocious, and the treatment meted out to her inhuman," Uttam Khobragade said Thursday.
As the diplomatic fallout deepened, U.S. Energy Secretary Ernest Moniz delayed a trip to India that had been planned for next week.
"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," an Energy Department official said.
Human rights activists say India's anger about the strip search misses the bigger issue. They say the mistreatment of domestic workers is a widespread and often overlooked problem worldwide.
Officials from both nations have repeatedly said that they hope the issue does not undermine their relations.