Celebrity Big Brother has sparked protests in Britain where more than 30,000 viewers complained to the country's media watchdog while Indian supporters of Shetty have burned effigies of her alleged abusers.
India has asked Britain to check whether race laws have been broken by the celebrities, incarcerated in a house and garden together where they are voted off one by one by TV viewers.
British newspapers have featured the story on their front pages, with The Sun, a tabloid, urging readers to vote for Goody to be evicted and running the headline: "Evict face of hate."
The Daily Express, another British newspaper, said: "The reality TV show has shamed our country in the eyes of the world."
Broadcaster Channel 4, issued a statement insisting Shetty was not suffering racial abuse but saying there had been a "cultural and class clash".
After a row over stock cubes used in their communal cooking, Shetty's housemate Danielle Lloyd said: "She should [explicated] off home. She can't even speak English."
|"Go back to the slums"
Jade Goody, fellow contestant
Goody told her to "go back to the slums".
British actress and fellow housemate Cleo Rocos, seeking to comfort Shetty, said of the clashes: "I don't think there's anything racist in it."
But Shetty replied: "It is, I'm telling you." Clearly shocked, the 31-year-old actress said: "I am representing my country. Is that what today's UK is? It's scary."
Indian TV channels have shown continuous footage of the show, in which one housemate has said she was scared to eat food prepared by Shetty because, "you don't know where those hands have been", and another referred to her as "The Indian".
Politicians defend Briton
Tony Blair, the British prime minister, was dragged into the row in parliament and Gordon Brown, the finance minister, was forced to defend Britain's image on a trade visit to India.
Brown, who has spent much of his tour trying to quell Indian anger, told a crowded news conference: "It is important for me to say that thousands of British people have phoned in ... to condemn what has happened on the Big Brother programme.
"They, like me, are determined that we send a message worldwide that we want nothing to interfere with Britain's reputation as a country of fairness and a country of tolerance."