Hit-run driver Puneet Puneet has been released on bail in India in a setback for protracted efforts to extradite him to Australia.

Puneet fled to India while awaiting sentencing over the 2008 death of university student Dean Hofstee in a drink-driving crash.

The 33-year-old driver was granted bail to care for his ailing parents despite prosecutors arguing that he be kept behind bars.

Puneet fled the scene of the 2008 crash but was later caught and pleaded guilty to culpable driving. He recorded a blood alcohol reading of 0.165 when arrested and police estimate he was driving at 150 km/h at the time of the crash.

Puneet was on bail and due to be sentenced in 2009 when he absconded on a passport borrowed from a friend.

He was arrested on his wedding day four years later but has continued to fight extradition proceedings.

However, Puneet surrendered himself to authorities and placed in custody in September 2021.

Before being granted bail in the Delhi High Court, he had to pay a surety of 20,000 rupees and is barred from leaving India. Puneet also had to surrender his passport and provide authorities with his phone number.

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