As Natwar Singh travels to Tehran September 2 to meet the new regime, India's overriding goal is securing energy, followed by preserving access to Afghanistan, maintaining influence in what India perceives as a swing state in the debate over Islam, and advancing other business relationships.

39738 9/2/2005 14:39 05 NEWDELHI6804 Embassy New Delhi CONFIDENTIAL 04 NEWDELHI2556|05 NEWDELHI5615|05 NEWDELHI6485 "This record is a partial extract of the original cable. The full text of the original cable is not available." "C O N F I D E N T I A L SECTION 01 OF 04 NEW DELHI 006804

SIPDIS

E.O. 12958: DECL: 09/01/2015 TAGS: PREL, PGOV, ENRG, PBTS, IR, IN, India_Iran SUBJECT: INDIA WALKING IRAN TIGHTROPE

REF: A. NEW DELHI 6485 B. NEW DELHI 5615 C. 04 NEW DELHI 2556

Classified By: A/DCM Geoff Pyatt for Reasons 1.4 (B, D)

1. (C) Summary: As Natwar Singh travels to Tehran September 2 to meet the new regime, India's overriding goal is securing energy, followed by preserving access to Afghanistan, maintaining influence in what India perceives as a swing state in the debate over Islam, and advancing other business relationships. Growing international unease about Iran's nuclear ambitions and long-standing relationships with terrorist organizations are subordinated to India's realpolitik interests in Iran. New Delhi hopes statements in the IAEA and elsewhere encouraging Iran in the right direction will appease other partners (especially the US) without upsetting its ties with Tehran. The GOI has clammed up about the August 30 visit of Tehran's nuclear negotiator Ali Larijani, with normally open interlocutors protesting ignorance of his message. India needs good relations with Washington and Tehran, and hopes to avoid being forced to choose between the two. End Summary.

Balancing Interests in Iran: Pipeline Trumps

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2. (C) India is engaged in a risky balancing act in its Iran policies. While the GOI has no illusions about Iran's nuclear ambitions or support for terrorism, these concerns are subordinate in its foreign policy and economic considerations. New Delhi does, however, fear the consequences of being forced to choose between Iran and the US or other western countries if the nuclear standoff escalates. Against this danger, India sees Iran as an enormous actual and potential energy supplier, and a balancing power on Pakistan's opposite border. Thus, Indian policy tries to advance its interests with Tehran, appease the West, and largely ignore the looming crises.

3. (C) To this end, New Delhi hosted the visit of Iran's top nuclear negotiator, Ali Larijani, for talks August 30. Larijani sought support for Iran's IAEA position in meetings with Natwar Singh and NSA Narayanan. Larijani told the press that he sought India's help in the IAEA on Iran's nuclear program, insisted Iran was fully committed to international regulations related to the nuclear field, and reported that the focus of his talks was expanding ""strategic relations and partnership"" with India on energy, including the planned $7 billion, 1800 mile natural gas pipeline from Iran through Pakistan to India and the recently-agreed deal to export liquefied natural gas to India. Star News foreign affairs editor Jyoti Malhotra told us September 2 that the pipeline deal is moving fast. Larijani told IRNA upon his arrival in Tehran that the modalities of Pakistan transit were a key element of his New Delhi talks.

MEA: Iran a Lower Priority

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4. (C) In this context, USG concerns with Iran (WMD programs and support for terrorism) remain largely unaddressed in GOI policy-making in part because they are hidden under two levels of neglect from decision makers. First, Iran is the third priority in the MEA division tasked with overseeing the relationships with Pakistan and Afghanistan. Indeed, Natwar Singh's reaction when the Ambassador raised Iran with him on August 23 (Ref A) suggested strongly that the Minister was unaware of the coincidence between his visit to Tehran and the next IAEA report. Second, Iran's attraction for Indian foreign policy is primarily as a source of oil and natural gas, and not out of any ideological affinity. Iran's role as a gateway to Afghanistan, a neighbor to play off of Pakistan, and a swing state in the Muslim world are also important. Although the GOI acknowledges international worries about Iran's nuclear deceit and support for terrorism, it has limited itself in public to anodyne suggestions encouraging Iran to clear up problems through dialogue with the IAEA. In private we understand the GOI approached Iran at the UK's behest to urge a positive reply to the latest EU-3 offer.

MEA Statements on Iran

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5. (SBU) GOI interlocutors have been mum on the content of Larijani's New Delhi visit, but MEA spokesman Navtej Sarna previewed for the media the FM's September 2-4 Tehran trip on September 1 and took questions on Larijani's visit. Sarna refused to comment on Iran's IAEA and EU-3 negotiations, even avoiding the standard GOI encouragement for Iran to comply with its NPT obligations. Sarna declined to answer whether India had consulted with the US, or to discuss the nuclear matter further. He also avoided questions on India's view of a role for the NAM in the IAEA or EU-3 negotiations.

6. (C) In the absence of the regional Joint Secretary (accompanying the FM to Tehran), A/DCM called J/S (Americas) S Jaishankar to express concern about the forgiving tone of Sarna's briefing, noting that in the past GOI officials have been clear about the requirement for Iran to live up to its NPT obligations. At this juncture in the EU-3 process, we have stressed, it is important that Indian actions and statements not give the impression of forgiving Iran. Jaishankar reported that he had discussed Iran with the Foreign Minister, who indicated that he would rather not conduct India's Iran diplomacy ""in the glare of the public spotlight."" The J/S added that both Natwar and Foreign Secretary Saran would want Iran to be a priority topic of

SIPDIS discussion during meetings with the Secretary and U/S Burns on the margins of UNGA.

Domestic (NAM and Shia Muslim) Considerations

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7. (C) Domestic opinion continues to influence GOI policy toward Iran. The UPA government derives a significant portion of its support from the Left Front and Congress factions who view Iran as a plucky developing nation holding out against Western imperialism. Although we do not believe this view prevails among senior GOI officials, who strongly oppose Iran developing nuclear weapons and recognize the threat this will pose to Indian interests, it does constrain their ability to speak out publicly against their fellow NAM member and be seen as siding with the United States. An op-ed by a reliably anti-American reporter for the Hindu on September 1 encouraged the GOI to stand by Iran as the ""litmus test"" of India's willingness to pursue an ""independent"" foreign policy.

8. (C) Additionally, Iran sees itself as a protector of Shia around the world, including some 13 million in India. The Iranian Embassy is very active in Shia cities like Lucknow, and our Shia interlocutors have told us that they expect the new Ahmadinejad regime in Iran to be more active in trying to whip up anti-American sentiment among Indian Muslims (Ref B). This religious appeal will also restrict the leeway of the UPA government to be seen siding with the US, as the UPA came to power promising to improve India's relations with the Muslim world. These domestic sentiments (which Iran played up with its appeal to involve the NAM in the nuclear negotiations) will be a thorn in the side, forcing the GOI leadership to make difficult choices as it calibrates its public approach to Iran.

The Middle Neighbors: Pakistan and Afghanistan

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9. (C) India's ties to Iran have a Pakistan and Afghanistan dimension as well. India sees Iran as a useful power with which to cooperate to encircle Pakistan, although it recognizes that Tehran aligns with Pakistan on the issue of Kashmir, and has in the past protested India's treatment of Muslims (Ref C). Iran, desiring Indian business and suffering its own strained relations with Pakistan, appears deliberately to have toned down its earlier comments on Muslims in order to maintain good relations with India. The outcome of both parties' balancing is a politely cordial but shallow commonality of interests.

10. (C) Iran's importance to India is greatly enhanced by Pakistan's unwillingness to grant transit rights to Indian goods moving to Afghanistan. Helping Afghanistan is a top Indian foreign policy goal. Iran is India's least expensive alternative entry point to reach Afghanistan and Central Asian markets, leading to the Indian commitment to expand the Chabahar port and build roads from there to Afghanistan. However, the MEA has complained to us that Iran has been less than helpful to India in providing access to Afghanistan and support (supplies and fuel) for India's Afghan reconstruction efforts.

Hoping to Duck a Confrontation Between Useful Partners

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11. (C) Ultimately, although formal India-Iran relations are cordial, they remain prickly and ultimately self-serving. Retired Ambassador to Iran Hamid Ansari, now a member of the Prime Minister's National Security Advisory Board, agreed that India's policy has always been based on hard national security interests, despite all the talk of brotherly relations. What is clear is that the elites in New Delhi do not want to have to choose sides between Tehran and Washington. India has so far publicly supported our stance on Iran's NPT obligations while desperately hoping to avoid any vote in the IAEA that would force it to come out publicly in favor of one capital over the other. Indian policy is informed by a hard-nosed realpolitik calculus, but reflects a hope that Washington may one day adopt a modus vivendi with Tehran, at which stage India would position itself to help build bridges between its two partners.

What We Can Do to Try to Alter the Dynamic

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12. (C) If the two main areas of Indian interest (energy and Central Asian access) were to disappear, India would have much less glue left in its relations with Tehran. Despite our commitments, the USG cannot solve India's energy needs immediately, but we do have an opportunity to try to eliminate the attraction of access via Iran to Central Asia by helping convince Pakistan to allow Indian transit to Afghanistan (septel).

13. (C) The mixed signals from the GOI (including the near simultaneous acceptance of our Iran briefing team, Larijani's New Delhi visit, and dispatching FM Singh to Tehran) illustrate India's continued efforts to straddle the fence. We should continue to make clear to New Delhi our view that turning a blind eye to Iran's nuclear ambitions out of NAM-centric motivations will not help India's relations with us or with Iran in the long run. The GOI realizes that coming down on either side of the fence will involve painful choices; we need to help soften the impact of sticking with us by eliminating India's need for Iran to advance its Afghan policy and achieve energy security. Without these two linchpins, India's affinity for Iran could fade, and a potential major irritant in our relations with India might subside.

14. (U) Visit New Delhi's Classified Website: (http//www.state.sgov/p/sa/newdelhi)

MULFORD

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