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Shankar is currently India's ambassador to Germany.
The community fondly remembers her tenure as minister, commerce, in Washington, DC, in the 1990s under then ambassador Siddhartha Shankar Ray.
Shankar, an Indian Foreign Service officer of the 1973 batch was posted in Washington from 1991 to 1995. She will succeed Ambassador Ronen Sen whose extended term ends on March 31.
After a four-year stint, during which he guided the India-US civilian nuclear deal to final consummation, Sen will leave the US on a direct Air India flight to New Delhi on April 1 after hosting his farewell reception on March 26 at the ambassador's home.
Ironically, when Sen put in his retirement papers last March -- at a time when the nuclear deal was still in limbo folowing deep differences between Washington and New Delhi over the provisions in the 123 Agreement -- Shankar's name was among those being thrown up as possible successors to the veteran diplomat.
Others in contention were former foreign secretary Shyam Saran and Satyabrata Pal, currently India's high commissioner to Pakistan, who also retires this month and will be replaced by Sharat Sabharwal.
Shankar will be the first serving diplomat to be posted in Washington in more than two decades after K Shankar Bajpai. After Vijayalaxmi Pandit who served as envoy between 1949 and 1951, she will be India's second lady ambassador to the US.
During her stint as minister, commerce in the 1990s, she was part of a dream team of woman diplomats serving under Ray, comprising Nirupama Rao, currently India's ambassador to Beijing (and strongly tipped to be the next foreign secretary when Shiv Shankar Menon's term ends) who was then minister, press and information, and Chitra Narayanan, now India's ambassador to Sweden, who took care of cultural affairs and also stepped in whenever there was political work to be done up on Capitol Hill.
The deputy chief of mission at the time was the mercurial Kanwal Sibal, who later went on to become India's foreign secretary punctuated by stints as ambassador in Paris and Moscow.
Interestingly, at the time, Ray's assistant was Vikas Swarup, now the deputy chief of mission at the Indian embassy in South Africa, and author of Q & A, which was made into the Oscar-winning Slumdog Millionaire.
Diplomatic sources told Rediff India Abroad that it didn't hurt that Shankar had worked in the Prime Minister's Office during Rajiv Gandhi's tenure and was considered one of the late premier's "favorite bureaucrats." And, most importantly, Sonia Gandhi likes her.
According to the sources, the earlier thinking was to prevail upon Ambassador Sen to continue till the general election, since sending a new envoy at this time may not be favoured by the next dispensation in New Delhi and could result in a truncated tenure. Dr Karan Singh served hardly six months as ambassador in the late 1990s after which he authored a book titled Brief Sojourn about his experience in Washington.
Sources said in the final analysis, External Affairs Minister Pranab Mukherjee had over-ruled earlier suggestions to hold off on an appointment pending the election and decided on Shankar, arguing that a career diplomat would be a safe bet.
An earlier version of this report mentioned that Ms Shankar would create history as India's first lady ambassador to the US. However, that record is held by Vijayalaxmi Pandit, the younger sister of India's first prime minister Jawaharlal Nehru.