According to Indian Ambassador Shyam Saran, bilateral consultations between Indian and Nepali security and intelligence officers in Kathmandu on Sept 22-23 proceeded ""exceptionally well"" as a first step in institutionalizing security assistance and information exchange between the two governments.

10972 9/25/2003 10:34 03KATHMANDU1870 Embassy Kathmandu SECRET//NOFORN 03KATHMANDU1859 "This record is a partial extract of the original cable. The full text of the original cable is not available." "S E C R E T SECTION 01 OF 02 KATHMANDU 001870

SIPDIS

NOFORN

STATE FOR SA/INS NSC FOR MILLARD LONDON FOR POL - GURNEY

E.O. 12958: DECL: 09/23/2013 TAGS: PREL, PTER, MCAP, PGOV, IN, NP, India Relations SUBJECT: NEPAL: INDIAN AMBASSADOR REPORTS ADVANCES IN BILATERAL SECURITY COOPERATION

REF: A. KATHMANDU 1859

B. KATHMANDU 1692

Classified By: AMB. MICHAEL E. MALINOWSKI. REASON: 1.5(B,D).

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1. (S/NF) According to Indian Ambassador Shyam Saran, bilateral consultations between Indian and Nepali security and intelligence officers in Kathmandu on Sept 22-23 proceeded ""exceptionally well"" as a first step in institutionalizing security assistance and information exchange between the two governments. The GOI believes it can provide most of Nepal's requirements for conventional military equipment, according to Saran, and looks to the USG to provide ""high-tech"" equipment. New initiatives include regularizing contacts between the two countries' respective border security units and GOI training on how to counter urban terrorism. While both Ambassadors agreed that their efforts to promote a reconciliation between the political parties and the Palace had not so far proven successful, Saran reported that the Government of Nepal (GON) is considering holding phased national and local elections in 2004. End summary.

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PROGRESS ON BILATERAL DEFENSE COOPERATION

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2. (C) On September 24 Indian Ambassador Shyam Saran called on the Ambassador to brief him on progress achieved during bilateral consultations between Indian and Nepali security and intelligence officials in Kathmandu Sept. 22-23 (Ref A). The initial round of talks went ""exceptionally well,"" Saran reported, characterizing them as the ""most serious and cooperative"" discussions on security, military, and intelligence topics ever between the two neighbors. The next round is expected to be held in New Delhi in November.

3. (S/NF) Saran said the talks focused on three topics. First, the discussions helped clarify new Government of Nepal (GON) requests for equipment, which included among other items mine-protected vehicles (MPVs), jeeps, and INSAS rifles. Saran said the GOI would try to be responsive to the new GON requests and may attempt to transfer some MPVs currently in Jharkand to Nepal. (Those vehicles would have to undergo some kind of refurbishment.) Second, since recent Royal Nepal Army (RNA) successes in the field increase the danger of the Maoists modifying their tactics and diverting their attacks to urban environments, the GOI offered to provide training on how to counter urban terrorism, Saran reported. Third, the two governments have agreed to revitalize intelligence exchanges, especially regarding cross-border movement of suspected terrorists. The smooth exchange of information had been hampered in the past because the RNA, which is primarily responsible for border security in Nepal, had no institutional links with the IB, which is responsible for border security in India. The talks addressed how to institutionalize the relationship between the two forces, including setting up formal channels of communication (with secure ""hotlines"") at IB offices in Siliguri, Patna and Lucknow. Communications will be supplemented by regular meetings between representatives of the two security forces at additional local venues as well. Saran added that the GOI plans to increase the number of border security force units along the border with Nepal from 14 to 34.

4. (C) After Nepal's Dashain-Tihar holidays in October, the two governments will pursue conclusion of extradition and mutual legal assistance treaties, Saran said. Talks on this subject over the past few days had gone well, he reported, with many earlier hurdles, including the sticky topic of how to treat third-country nationals, resolved, he reported. Extradition of one's own nationals remains a sensitive topic, however. In the past, Saran explained, the GOI had regularly turned over suspected Maoists to the GON without a formal treaty--earning criticism from human rights groups and INGOs such as ICRC in the process. The wife of Maoist Central Committee member Bam Dev Chhetri, whom the GOI had handed over in September 2002 (and who was subsequently released by the GON during the ceasefire), has filed a case against the GOI, he noted. An extradition treaty with Nepal would give the GOI a firm legal basis for such transfers in the future.

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INDIAN VIEWS ON US SECURITY ASSISTANCE

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5. (C) By having the GON prioritize its security needs, the GOI will be better able to provide assistance, Saran continued. While the GOI has no objection per se to the USG providing M-16 rifles to the RNA, the GOI believes that it is in a better position to provide conventional weapons like rifles to the Nepali military, and that the USG should offer ""high-tech"" equipment and assistance. Ambassador Malinowski replied that while final funding levels remain unknown, the USG is reviewing the possibility of providing refurbished Bell helicopters to the RNA. Saran noted that the GOI may provide a few Indian helicopters as well.

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NO PROGRESS ON POLITICAL FRONT

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6. (C) Both Ambassadors agreed that their joint efforts, along with the British Ambassador, to promote a reconciliation between the political parties and the Palace (Ref B) had not so far proven fruitful. The fragile consensus between the political parties is already beginning to unravel, both noted, with the Nepali Congress hinting it will insist that revival of Parliament precede formation of an all-party government and the Communist Party of Nepal - United Marxist Leninist (UML) hinting it will insist on the exact opposite. Nonetheless, the Ambassadors concurred that the GON will have to reach out to the political parties. Saran reported that he understands that the King may decide to meet the parties to enlist their support and is also considering a possible Cabinet expansion. For now, the GON intends to concentrate on elections, including the possibility of holding staggered local elections next spring, followed by national elections, conducted in phases, beginning in November 2004.

MALINOWSKI