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 Hundreds of expatriate Americans use the American Community
Support Association club, which has a bar, swimming pool, restaurant
and a beauty parlor within the embassy premises. The club has been
in existence for decades.
The embassy must cease all commercial activities benefiting
non-diplomatic staff on its premises by January 16, a government
source with direct knowledge of the dispute told Reuters.
India is furious at the December 12 arrest, handcuffing and strip
search of its deputy consul in New York, Devyani Khobragade, who
prosecutors accuse of underpaying her nanny and lying on a visa
application.
Still festering nearly a month on, the row has started to affect the
wider relationship between the world's two largest democracies, with
one high-level visit already postponed and a visit scheduled for
next week by U.S. Energy Secretary Ernest Moniz now looking
doubtful.
India has already taken a number of retaliatory measures and is now
stepping up the pressure on Washington ahead of a court appearance
by the diplomat due on January 13.
The latest move is aimed at closing the embassy's social club to
non-diplomats. India says the facilities are tax free because they
are located in the embassy grounds.
"Basically the thing is that the provision of such facilities to
non-diplomats and not paying taxes is clearly not in accordance with
the Vienna convention," the government source with knowledge of the
dispute told Reuters.
"You can't have these facilities inside and not pay taxes and allow
non-diplomats," the source said.
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A U.S. embassy spokesman was not immediately available for comment.
India had already curtailed privileges offered to U.S. diplomats to
bring them in line with the treatment of Indian envoys to the United
States. Since December, the U.S. ambassador in Delhi can be
subjected to airport frisking and most consular staff have reduced
levels of immunity.
Concrete barriers were removed from a road near the embassy last
month, apparently in retaliation for the loss of a parking spot for
the Indian ambassador in Washington.
Known as the American Embassy club, the social center is located on
embassy grounds and along with the American Embassy School is the
heart of Delhi life for the families of many expatriate employees of
U.S. corporations in India.
India is also preparing to take steps against the embassy school,
which it suspects may be employing some staff in violation of visa
requirements, the government source said.
(Editing by Alistair Scrutton and Raju Gopalakrishnan)
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