U.S. Ambassador to India David C. Mulford writes to Secretary of State Condoleezza Rice on the challenges ahead in fulfillinh the Indo-U.S. civil nuclear deal

40501 9/13/2005 12:49 05NEWDELHI7100 Embassy New Delhi CONFIDENTIAL "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 03 NEW DELHI 007100

SIPDIS

FOR THE SECRETARY FROM AMBASSADOR MULFORD

E.O. 12958: DECL: 09/13/2015 TAGS: PREL, PGOV, IN, External Political Relations SUBJECT: SCENE-SETTER FOR MEETINGS WITH MANMOHAN SINGH & NATWAR SINGH IN NEW YORK

Classified By: Ambassador David C. Mulford for Reasons 1.4 (B, D)

1. (C) Summary: Madame Secretary, your meetings this week with (we hope) Prime Minister Manmohan Singh and Foreign Minister Natwar Singh provide an occasion to sketch the real challenges we face in implementing legislative actions necessary for us to fulfill the civil nuclear vision of the July 18 Joint Statement, and to challenge India to take equally difficult steps on relations with Tehran and separation of India's civil and military nuclear facilities. In my meetings with the Foreign Minister and Foreign Secretary Saran, I have found them reluctant to acknowledge SIPDIS that Iran could jeopardize both our nuclear initiative and India's regional security interests. Your meetings provide an occasion to encourage the GOI to exercise leadership on this Iran issue, rather than hiding behind the NAM consensus, as happened on UN reform. In the region, Indo-Pak relations are progressing steadily, and you should urge India to consider further initiatives that build on the recent Delhi-Srinagar dialogue and PM Singh and President Musharraf's meeting on September 14 to sustain positive momentum. If there's time, you may also wish to elicit Natwar's thoughts on Afghanistan, Bangladesh and Nepal, where our partnership is increasingly visible. End Summary.

Iran: India Needs Alternatives

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2. (C) The September 8 House International Relations Committee hearings alerted the GOI to the need to stop fence-sitting when it comes to Iran's nuclear weapons program. New Delhi is trying to support us without alienating Tehran, on whom it depends for current oil supplies, future natural gas imports (pipeline and LNG), and access to Afghanistan and Central Asia. The GOI claims that the Iranians reacted very negatively when Natwar pushed privately on NPT compliance during his recent visit to Tehran. New Delhi believes it has helped behind-the- scenes in Vienna by moderating the position of other NAM countries, and FM Singh will likely point out that Congressman Lantos and others have not sufficiently appreciated India's positive role in the IAEA. On the plus side, there is little warmth to the India-Iran relationship, suggesting that India's attachment to Iran could weaken as and when New Delhi is able to secure other energy sources (e.g. gas pipeline from Bangladesh) and alternative access routes to Central Asia (e.g., overland transit through Pakistan). That said, Natwar Singh must be made to recognize that Congress is watching India's role at the IAEA with great care, and the Indian vote in Vienna will have real consequences for our ability to push ahead on civil nuclear energy cooperation. At least some in India's strategic elite have begun to argue that Indian indulgence of Iran's nuclear shenanigans does not serve the country's strategic interests.

Civilian Nuclear Energy Cooperation

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3. (C) In the face of Congressional and third country criticism over the non-proliferation ramifications of the July 18 agreement, the GOI has understood the importance of showing its willingness to cooperate with us on key proliferation benchmarks. There is a real debate inside the Indian strategic and scientific communities over how far to go, and how fast, on separation of civil and military facilities. In addition to India's critical support on Iran, you could use this opportunity to remind FM Singh of the need to be fully engaged as a partner in non-proliferation by moving briskly on civil/military nuclear separation and supporting the PSI Statement of Interdiction Principles. (Note: GOI concerns over the Suppression of Unlawful Activities Convention and PSI are on the agenda for a September 15 video-conference between NP experts and GOI counterparts. End Note)

UN Reform: New Delhi Says Yes, New York Says No

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4. (C) Unhelpful positions on UN reform issues emanating from Indian officials in New York and their sympathizers in New Delhi are at odds with assurances from senior Ministry of External Affairs (MEA) officials that India enjoys large areas of agreement with the US vision. During high-level meetings with Washington visitors, our MEA interlocutors have asserted their support for management reform, their backing for a credible Human Rights Council, and their recognition that UNSC expansion is just one element of the reform mix. Our contacts have insisted that the Indian delegation in New York was largely deciding its own positions on these issues while New Delhi remained preoccupied with planning the PM's agenda. You should seek an end to these mixed signals, and reinforce Shirin Tahir-Kheli's message about the benefits that would come from India and the US being seen visibly to partner on one or two major UN reform projects. The September 14 Democracy Fund event -- and the associated unveiling of India's democracy promotion tool kit -- are an important step forward in our effort to encourage a more courageous GOI line on this issue, but there are many other areas where we should be working together in a similar manner, to include peacekeeping.

Indo-Pak Relations

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5. (C) Indo-Pak relations are on a favorable trajectory, buoyed by a positive meeting in Delhi between the PM and moderate Kashmiri separatists and rumors in the press here of a possible breakthrough on the Siachen Glacier issue at the PM-Musharraf meeting in New York on the 14th. We continue to encourage both dialogue tracks (Delhi-Islamabad and Delhi-Srinagar) without inserting ourselves into Indo-Pak diplomacy. The Manmohan-Musharraf bilateral may move the process forward incrementally, but New Delhi will continue to watch Islamabad for any decisive action against terrorist infrastructure -- including shutting training camps, cutting communications links, and arresting terrorist cadres -- as the barometer to gauge before agreeing to an internal cease-fire in J&K, significant troop reductions in Kashmir or any possible concessions on territorial disputes. You should push Natwar to have India think big in terms of CBMs that India can champion to build on this week's PM-Musharraf meeting.

The Neighborhood

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6. (C) Bombings in Bangladesh and the deteriorating situation in Nepal have India worried about its neighborhood. The bright spot is Afghanistan, where Natwar and PM Singh had an excellent visit at the end of August. If there is time, you may wish to engage in a tour d'horizon with Singh to gauge Indian views on their neighbors. If you do, you could reiterate the value of meaningful New Delhi-Washington dialogue on ways we can work together to address regional tensions.

Explaining the Stakes while Preserving our Equities

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7. (C) In sum, we are enjoying real momentum from the July 18 Joint Statement, and the Indian team will arrive in New York with a good political tailwind from the Parliamentary debate over relations with the US and successful summit meetings with Blair and Chirac. However, Iran looms as a major political hurdle in Washington and a significant early test of India's readiness to exercise the responsibilities of global leadership. Our GOI contacts tell us that Natwar was struck by the forcefulness of your presentation on September 9 and feels squeezed between admonitions from us and pressure from the Iranians. Under the circumstances, the Indian instinct will be to lie low and hope that discussions in New York avoid the unpleasant prospect of a BOG vote on September 19. We need to give a clear accounting of these stakes, while also preserving the significant equity that we have built-up in the transforming US-India relationship.

MULFORD