January 16, 2014 1:33 PM EST

Over the past decade, the U.S.’s relations with other big powers like China, Russia and Brazil have ranged from troubled to terrible. The singular exception has been India. Until the nasty spat between Washington and New Delhi over Indian diplomat Devyani Khobragade, the two governments were cooperating well. India and the U.S. share common values: they are the world’s biggest democracies, and both eye China’s rise warily. America has been a land of opportunity for tens of thousands of Indian immigrants, many of whom have achieved phenomenal success in their adopted home.

Khobragade, whom U.S. authorities charged with visa fraud involving her maid, has returned to India after being granted diplomatic immunity. But don’t expect the relationship to rebound quickly. In fact, the atmosphere could soon become even more tense — over a far more prominent Indian also embroiled in a visa controversy.

India will hold a general election by May. The ruling coalition led by the Congress Party is widely seen as ineffectual. Its main rival, the Hindu-nationalist Bharatiya Janata Party, holds the edge. The BJP’s standard-bearer is Narendra Modi, 63, chief minister of the western state of Gujarat. Modi sells himself as a populist and, given Gujarat’s strong economy, an action man who can cut through India’s notorious red tape and enable business. If the BJP prevails, Modi will be India’s next Prime Minister.

Yet he is persona non grata in the U.S. That’s because of his alleged role in a horrific episode of sectarian violence in February 2002. After 60 Hindu pilgrims died when a Muslim mob set their train on fire, three days of anti-Muslim riots in Gujarat claimed more than 1,000 lives, most of them Muslim. (Muslims make up about 14% of India’s 1.2 billion population.) Modi’s critics say he condoned or even encouraged the violence — accusations he stoutly denies and for which no Indian court has found him responsible.

In 2005, the State Department revoked a visa that Modi had for traveling to the U.S. The action was taken under an American law that bars a foreign official who “was responsible for or directly carried out … particularly severe violations of religious freedom.” The State Department noted that Modi “was responsible for the performance of state institutions” during the riots. When Modi had no national profile, the restriction was inconsequential. But can Washington blacklist the leader of India?

U.S. policymakers are divided. A resolution introduced in November in the U.S. Congress calls on the State Department to continue denying Modi entry. It has attracted 43 congressional co-sponsors, including two Muslims. Realists, and U.S. business leaders wishing to capitalize on Modi’s openness to foreign investment, say his character should only be a footnote to Washington’s wider relations with New Delhi. Last year in India, three Republican members of Congress met with Modi, one of whom invited him to the U.S. “There’s no change in our long-standing visa policy,” State Department spokeswoman Marie Harf said in September. “If Mr. Modi would like to apply for a visa and await a review like any other applicant, he is certainly free to do so.”

Should Modi win, the Obama Administration will be pressured by many at home and abroad to condemn his past and prevent him from visiting the U.S. But Obama has tended to subordinate principle to the national interest. Hence, he wouldn’t brand the overthrow of elected Egyptian President Mohamed Morsi a coup or enrage Ankara by acknowledging the Armenian genocide, despite his earlier pledges to do so. Over the years, the U.S. has done business with plenty of unsavory leaders, in countries far less friendly than India.

By revoking Modi’s visa, the U.S. government has made clear its view of him and the Gujarat rampage. But Washington’s ties with New Delhi are too important to be confined through that prism if Modi becomes PM. Already the Khobragade flap has forced U.S. Energy Secretary Ernest Moniz to postpone a trip to India, and many Indians are freshly incensed over insensitive remarks about their country by a U.S. diplomat and his wife, who were based in New Delhi. (The diplomat was expelled in a reciprocal move for Khobragade’s exit.) Some say the relationship is near a tipping point. “We may not be back to square one but are not very far from it either,” says Mohan Guruswamy of the New Delhi think tank Centre for Policy Alternatives. Both countries need to step forward and not allow Modi’s past to push them back.

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