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The repeated assertion by the US that the arrest of an Indian diplomat on charges of visa fraud is an "isolated" incident and would not have an impact on its bilateral ties with India is "a case of wishful thinking", a former top Obama administration official has said.

"The talking point from the State Department podium has been that this case should be isolated from the broader India US relationship. I think that that is a case of wishful thinking," former State Department spokesman P J Crowley said, noting that there was misjudgment on the part of both sides.

Crowley, who was the Assistant Secretary of State for Public Affairs from May 2009 to March 2011, said that the issue - that has now rocked the ties between the two countries could have been handled much differently by both. A 1999-batch IFS officer, Devyani Khobragade, India’s Deputy Consul General in New York, was arrested on charges of making false declarations in a visa application for her maid Sangeeta Richard. She was released on a USD 250,000 bond.

The 39-year-old diplomat was strip searched and held with criminals, triggering a row between the two sides with India retaliating by downgrading privileges of certain category of US diplomats among other steps last month.

"From the US stand point what they were trying to achieve? It turns out to be a flawed assumption that bringing an Indian diplomat into a New York court was not going to have an impact back home," he said, observing that the Indian reaction over the issue was quite predictable."It would certainly appear that both the US and India had opportunities to minimise the impact that would have on public opinion on both countries and seemingly failed to take advantage of those opportunities," said Crowley, who is now teaching at George Washington University and affiliated with its Institute for Public Diplomacy and Global Communication.

"I do not think it would have a lasting impact on the relationship, but it is going to be an obstacle for a period of time," he added.

Noting that the broad trajectory of India-US relationship is "very very positive" and has been for some time, Crowley said this in a sense makes one curious that both sides appear to be prepared to put some of that progress at risk.

"There is a lot of suggestion of trying to resolve this without going back into court. What is curious about that is that, if that’s an idea of one possibility now, after the act, it was undoubtedly the best possibility before the act, which one of the sides failed to take advantage of," he said.

The incident, he noted, would have an impact on the bilateral ties for a fair amount of time. This would appear to be a case that both sides "misjudged" in how it would trigger public and political responses on both sides.

"Unfortunately, to me it was a crisis that was avoidable, before the act but now it would be difficult to resolve anytime soon," he said.