US Secretary of State John Kerry's expression of "regret" over the incident was not enough, he said.
Deputy consul general Devyani Khobragade denies visa fraud and making false statements, after being accused of underpaying her Indian maid.
She was handcuffed and strip-searched last week - her arrest and alleged "humiliation" has led to a major diplomatic row between India and the US.
Ms Khobragade appeared in a Manhattan court last Friday and was freed on a $250,000 (£153,000) bail. She has in turn accused the maid, Sangeeta Richard, of theft and attempting to blackmail her.
Delhi has ordered a series of reprisals
against the US. Security barricades around the US embassy in the city
were removed and a visiting US delegation was snubbed by senior Indian
politicians and officials.
'Not acceptable'
On Wednesday, Mr Kerry spoke to Indian National Security
Adviser Shivshankar Menon, who had described the treatment as
"despicable and barbaric".He said the "unfortunate" incident should not damage US-Indian relations.
But on Thursday, India said nothing short of an apology would suffice.
"Just regretting and completing a formality is not acceptable. We are not happy. The way they have handled this case, their behaviour and attitude... they will have to apologise," Mr Nath, who is parliamentary affairs minister, told reporters in Delhi on Thursday.
"They should admit that they have committed a mistake and only then will we be satisfied."
Foreign Minister Salman Khurshid, however, said India wanted to ensure the row did not damage its "valuable relationship" with the US.
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