U.S. Embassy School In India Caught In Diplomatic Spat: NYT

However, given that students from other nationalities form a majority at the school, teacher departures and fee increases have shocked many of New Delhi's expatriates.

Investigations into the United States duty-free commissary and a recreational club have also been controversial.

About 50 nations, including Chile, Peru, Sweden and Belgium, got duty-free goods at a diplomats-only store at the U.S. Embassy until the Indian government sent letters to these countries ending this privilege, the NYT report said.

"Some ambassadors have quietly grumbled that they have scrambled in recent months to buy wine, whiskey and other goods needed for social functions, with some threatening to end privileges to Indian diplomats in their home countries potentially setting off a global cascade of diplomatic tiffs," it added.

The American Community Support Association, a recreational club with a swimming pool, bowling alley, baseball diamond, restaurant and hair salon, for expatriates on the U.S. Embassy compound, too is facing problems.

"To the Indians, the club is an insulting colonial holdover because it accepts Americans and those sponsored by diplomats, which means Indians are largely excluded," the report said.

"ACSA cannot continue in its current form. It will have to change in a manner that makes it compliant with rules and laws," the NYT report quoted a senior Indian diplomat as saying.

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