MEA Joint Secretary Gaitri Kumar warned that the ""reopening"" of the Letter of Offer and Acceptance on the Boeing VVIP aircraft sale to India, for the purpose of retroactively including an ""intrusive"" End-Use Monitoring agreement, was extremely problematic for the Government

152359 5/5/2008 11:00 08NEWDELHI1218 Embassy New Delhi SECRET "VZCZCXRO5226OO RUEHBI RUEHCI RUEHLH RUEHPWDE RUEHNE #1218/01 1261100ZNY SSSSS ZZHO 051100Z MAY 08FM AMEMBASSY NEW DELHITO RUEHC/SECSTATE WASHDC IMMEDIATE 1585INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVERUEHBJ/AMEMBASSY BEIJING 6881RUEHLO/AMEMBASSY LONDON 4915RUEHMO/AMEMBASSY MOSCOW 2655RUEHKO/AMEMBASSY TOKYO 5629RUEKJCS/SECDEF WASHDCRUEAIIA/CIA WASHDCRHEHNSC/NSC WASHDCRUEIDN/DNI WASHINGTON DCRUCNDT/USMISSION USUN NEW YORK 6350RHMFISS/HQ USCENTCOM MACDILL AFB FLRUEHGV/USMISSION GENEVA 7697RHHMUNA/HQ USPACOM HONOLULU HIRUEKJCS/JOINT STAFF WASHDC" "S E C R E T SECTION 01 OF 03 NEW DELHI 001218

SIPDIS

SIPDIS

E.O. 12958: DECL: 04/29/2018 TAGS: PREL, PGOV, MARR, IN SUBJECT: MEA AMERICAS DIVISION ASSURES DASD CLAD MIL-MIL RELATIONSHIP A TOP PRIORITY

Classified By: PolCouns Ted Osius for Reasons 1.4 (B, D)

1. (S) Summary. In a private meeting with Deputy Assistant Secretary of Defense James Clad, Ministry of External Affairs

SIPDIS (MEA) Joint Secretary Gaitri Kumar:

-- assured DASD Clad that the military-to-military relationship was a top priority of her ministry;

-- warned that the ""reopening"" of the Letter of Offer and Acceptance (LOA) on the Boeing VVIP aircraft sale to India, for the purpose of retroactively including an ""intrusive"" End-Use Monitoring agreement, was extremely problematic for the GOI;

-- said that Prime Minister Singh had instructed the Indian bureaucracy to explore Ballistic Missile Defense (BMD) cooperation with the U.S., adding that how that cooperation would take place is yet to be decided and would take some time before domestic political sensitivities could allow substantive progress;

-- requested the U.S. keep the issue of a possible dedicated phone link with India a secret;

-- encouraged the U.S. Navy to participate with India in the June Maritime Security Core Group exercises;

-- criticized the Visas MANTIS requirement for India and that several Defense Research and Development Organization (DRDO) programs remain on the entities list;

-- said that she is working at high levels to try to get India's offset program to permit indirect offset investments outside of the defense sector; and

-- praised Secretary Gates' February visit for strengthening the directives set forth in the 2005 Defense Framework Agreement.

End Summary.

----- Priority with a capital P -----

2. (C) Just prior to entering the scheduled meeting with DASD Clad and the delegation he was leading, JS Kumar asked DASD Clad for a private meeting with just him and a notetaker. Kumar began the meeting by assuring Clad that MEA ""views the military-to-military relationship with the United States as a priority with a capital P."" She explained that her division is committed to working with the Ministry of Defense to follow through on ideas generated from Secretary Gates' visit in late February, and later, after staffs joined the meeting, added that she felt the mil-mil relationship was thriving through the joint exercises, dialogues, and procurements which have been taking place.

----- Boeing VVIP EUM problematic for India -----

3. (C) Turning to her talking points, Kumar raised Indian concerns over what it perceived was the ""reopening"" of the LOA for the Boeing VVIP aircraft India had agreed to purchase in 2005, specifically mentioning the ""intrusive"" end-use monitoring (EUM) agreement for the protection suite India was now being asked to sign as problematic. ""We don't mind if it is recast for some financial or technical thing,"" she stated, ""but to insert an EUM requirement retroactively and say if you don't agree we'll put it in storage, that would make our people flip."" Kumar went on to say that both the U.S. and India have an interest in quickly reaching an agreement on a blanket EUM agreement, and offered to meet anytime to further negotiate language. She added that the Indian side had felt the draft which had been worked out at the May 2007 Defense Production and Procurement (DPPG) meeting in Honolulu had been acceptable to India, but that later, after the principals who negotiated the draft left their posts, the agreed upon draft was abandoned. DASD Clad encouraged Kumar to be involved in further, immediate dialogue on EUM, asking her to consider leading a delegation to Washington. Kumar said she would consider it.

----- Desiring BMD cooperation, but when? -----

4. (C) Turning to BMD, DASD Clad noted that, following up on

NEW DELHI 00001218 002 OF 003 a request National Security Advisor Narayanan had requested to SecDef Gates in February, he was accompanied by a team of BMD experts ready to brief on the state of the U.S. system and to seek areas for cooperation with India. He offered three areas for immediate cooperation:

1) an invitation to the international BMD conference in Hawaii in September, to include India's participation in both classified and unclassified portions;

2) joint analysis to help India assess SIPDIS its threat environment, BMD requirements, and options for a BMD system; and

3) reciprocal flight observations of two future missile tests.

Later, in the full group session, Kumar mentioned the BMD MOU the U.S. had previously offered to negotiate and said India would not be in a position to quickly agree because of political considerations, but wanted to keep all options on the table. OSD-Policy Officer Cara Abercrombie explained that some technical cooperation would be possible under the new information exchange agreement for modeling and simulation, which DRDO BMD expert Dr. Saraswat would be able to sign. Kumar then went on to explain that Prime Minister Singh had instructed the Ministries of Defense and External Affairs, as well as the Prime Minister's Office, to work together to come to a decision on how to proceed with cooperation with the U.S. on BMD. While there was no conclusive plan as yet, Kumar said the visit of DASD Clad and this delegation would provide valuable input as the GOI went through its internal deliberations. She noted that at the following day's briefing on BMD by DASD Clad's delegation, the GOI would send a broad representation to include MEA's America's and Disarmament Divisions, MoD, the National Security Advisor's office, and the Defense Research and Development Organization (DRDO). She asked for patience, adding that domestic political considerations were quite sensitive, and that ""we will be done when we are good and ready, so it may take awhile."" In a reference to the impact of Pakistani and Chinese concerns, she stated that one question on the minds of all Indian policymakers was ""What will the neighbors think?""

----- Please keep phone link offer a secret -----

5. (S) XXXXXXXXXXXX

----- Hope to see U.S. Navy at Maritime Security talks -----

6. (C) The Indian Navy was eagerly seeking U.S. participation in the Maritime Security discussions in June, Kumar told Clad, noting that the President and Prime Minister Singh had agreed to enhanced cooperation on maritime security in their March 2006 Joint Statement. Kumar asked the U.S. to say whether we were interested in pursuing the core group. DASD Clad assured her of the DoD commitment to expanding maritime cooperation. India strongly hoped for the opportunity to enhance cooperation with the U.S. and to learn from the expertise the USN brings, regardless of whether it would be CENTCOM, PACOM, AFRICOM or some other command, she stated.

----- Entity list, Visas MANTIS ""disadvantaging"" U.S. in Indian market -----

7. (C) Kumar raised a couple broader issues which adversely affect the security relationship in the Indian opinion. First, the fact that DRDO entities remain on the Commerce Department's Entity List ""we think is crazy,"" she said, noting that the U.S. and India are currently discussing BMD cooperation and a civil-nuclear agreement, and that DRDO is routinely an active participant in sensitive discussions in the Joint Technology Group, Senior Technology Security Group and the Defense Production and Procurement Group. Second, the Visas MANTIS program was working counter to enhancing our relationship, she felt, as it caused undue delays or even NEW DELHI 00001218 003 OF 003 refusals of visas for researchers who often were going to the U.S. to test equipment India intended to purchase. In order to have some bargaining leverage on the visa issue, India instituted a reciprocal MANTIS-like procedures, she said, adding both sides would benefit by removing such procedures. The U.S. was ""disadvantaging"" itself in the Indian market with its entities list and visa systems, she suggested.

----- Hope for indirect offsets, credit banking -----

8. (C) Kumar spoke extensively on her views on India's offset program, saying she has been working at high levels to try to get an indirect offset program approved which would allow for investments to take place outside of the defense sector. She reported that she has taken the issue to the level of India's Planning Commission. She also said that offset credit banking was a possibility in the next Ddfense Procurement Policy, and urged U.S. business to lobby the MoD on the issue.

----- Praise for SecDef Gates visit -----

9. (C) Speaking more broadly on the security relationship, Kumar said the Indian government felt Secretary Gates visit was ""excellent"" and that it had enhanced the clear directives set forth in the 2005 Defense Framework Agreement. The GOI now hoped to further strengthen institutional arrangements and other forms of cooperation, to include joint exercises, joint research and acquisitions.

10. (U) DASD Clad has cleared this message.

MULFORD