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India on Friday spoke in conciliatory language on the issue of its senior diplomat Devyani Khobragade case, saying that it was important to "preserve" the "valuable" bilateral relationship even as the US ruled out the demand for dropping of the charges against her.

External Affairs Minister Salman Khurshid sounded hopeful of finding a way out when he told reporters here, "We are going to find a solution. And I hope that we will find a solution."

A day after he demanded dropping of charges against Khobragade unconditionally, Khurshid today said, "I am conscious of the fact that this is a valuable relationship between two countries" while dealing with the "hurtful" and "unacceptable" treatment meted out to our diplomat.

The two countries have been in touch during the last two days to resolve the diplomatic stand-off created by the arrest and strip search of Khobragade, Deputy Consul General in New York who is now transferred to India’s Permanent Mission at UN, on the charges of visa fraud. She has been accused of underpaying her maid as per the US law.

Wendy Sherman, Under Secretary of State for Political Affairs, has had lengthy conversation with Foreign Secretary Sujatha Singh on Wednesday and Thursday in a bid to find a way out. According to sources, they discussed "specific steps" to resolve the issue.

Talking to reporters, Singh said, "You do not treat an Indian diplomat in this manner whether it is in the US or any other country. We expect our diplomat to be given exactly the same courtesies that we extend to American diplomats or diplomat of any other country."

A 1999-batch IFS officer, Khobragade was arrested on December 12 on visa fraud charges as she was dropping her daughter to school and released on a USD 250,000 bond after pleading not guilty in court.

The ill-treatment of its diplomat evoked a sharp reaction from India which initiated a slew of steps to downgrade the privileges enjoyed by the US diplomats and their families including withdrawing airport passes and stopping import clearances.

Meanwhile, in Washington, the US State Department rejected India’s demands of dropping visa fraud charges against Khobragade and apologising for mistreating her, saying the allegations were "very serious" and she would not be allowed to go scot-free.

State Department spokesperson Marie Harf also made it clear that the immunity sought for 39-year-old Khobragade after her transfer to India’s Permanent Mission to the UN is "not retroactive".