US embassy cable - 04NEWDELHI7512

C O N F I D E N T I A L SECTION 01 OF 03 NEW DELHI 007512 
 
SIPDIS 
 
E.O. 12958: DECL: 11/15/2014 
TAGS: PREL, PTER, KNNP, KIPR, MASS, IN, PK, IR, Non Proliferation 
SUBJECT: SENATOR BAYH'S MEETINGS IN NEW DELHI, NOVEMBER 
23-24, 2004 
 
 
Classified By: Charge Robert O. Blake, Reasons 1.4 (B,D). 
 
1. (C) Summary:  In a series of senior level GOI meetings on 
November 23-24 during a private visit to India, Senator Evan 
Bayh (D-Indiana) heard a strong Indian commitment to move 
ahead with our bilateral partnership, coupled with concern 
about the potential disruptive effect of US F-16 sales to 
Pakistan.  Citing India's "impeccable" record of preventing 
onward proliferation, Foreign Secretary Saran advised that 
the US needs to bear in mind our shared interest in stopping 
the spread of WMD and to clarify whether India is part of the 
problem or the solution.  NSA Dixit made a similar point, 
urging America not to look at India as another Libya or Iraq, 
but as a democracy and responsible nuclear power.  Dixit 
characterized the "theology" of non-proliferation as the only 
difference between our two countries.  Echoing points made 
during his recent visit to Washington, Saran also flagged the 
Indian need to expand the use of clean nuclear energy, and 
sought flexibility on civilian nuclear supplies.  Senator 
Bayh praised the progress in Indo-U.S. relations on many 
fronts, but noted that U.S. intelligence experts would like 
to deepen operational cooperation.  The Senator also made a 
strong pitch for enhanced IPR protection.  End Summary. 
 
F.M. NATWAR SINGH 
----------------- 
 
2. (C) Indo-US Relations: After welcoming Senator Bayh, 
Foreign Minister Singh hailed the good momentum in Indo-Pak 
relations.  Infiltration rates from Pakistan have dropped, 
partly due to the winter weather and defensive steps taken by 
India, but also because the GOP has made "some" effort.  On 
Indo-U.S. relations Singh laughingly apologized to the 
Senator and said India was glad President Bush had won 
re-election.  He praised the President's vision for Indo-U.S. 
relations and said they have been moving forward since day 
one of the Bush presidency.  He recalled with satisfaction 
that the President had told the PM in September that India 
would be one of the first countries he visits if re-elected. 
The FM predicted Indo-U.S. relations will continue to 
improve.  But he told the Senator he wanted to flag one 
concern.  He predicted any sale of F-16s to Pakistan would be 
a "fly in the ointment of Indo-U.S. relations".  The key 
point for India is that F-16s can be 
fitted with nuclear weapons. 
 
3.  (C) NRIs:  Singh praised the success of non-resident 
Indians in the United States.  He recounted how Indian steel 
tycoon Lakhsmi Mittal is now the largest steel magnate in the 
world.  Senator Bayh responded that Indiana manufactures more 
steel than any state in America, and that Mittal owns four of 
the state's five steel mills. 
 
4.  (C) No Clash of Civilizations: In response to a question 
from Senator Bayh about radical Islam, the FM noted proudly 
that India had proved Sam Huntington's Clash of Civilizations 
theory wrong.  India's Islam differed substantially from the 
Islam of Saudi Arabia or Indonesia.  Although India has the 
second largest population of Muslims, not a single one had 
joined Al-Qaida or the Taliban.  The Minister noted with 
concern, however, that the Madrassah "movement" is catching 
fire, so the issue of radical Islam affects all of us, 
including the United States where Islam is the fastest 
growing religion. Senator Bayh concluded by expressing his 
hope that the United States and India can work to enhance our 
long term mutual strategic interests, which he said are many. 
 
F.S. SHYAM SARAN 
---------------- 
 
5. (C)  Indo-US Relations:  Saran welcomed the Senator by 
noting that he had just returned from a productive visit in 
the United States, during which he had been pleased to see 
SecState designate Rice and enjoyed good meetings of the 
working groups on High Technology Cooperation (HTCG) and the 
Next Steps in Strategic Partnership (NSSP). He expressed his 
satisfaction with the higher than expected turnout of 
American and Indian business to the HTCG private sector 
meeting, which he characterized as "on track" to get tangible 
results.  Overall, he thought there is a strong commitment on 
both sides to carry  relations forward.  Now that landmarks 
like NSSP Phase 1 have been achieved, both sides need to make 
important decisions and turn words into action.  Given that 
India has had an "impeccable" record on proliferation and 
given our shared interest in stopping the spread of WMD, the 
US needs to clarify whether India is part of the problem or 
part of the solution.  Another challenge for India is to 
maintain economic growth rates of 7 to 8 percent per annum, 
for which its energy needs will be enormous.  Given 
constraints on conventional energy supplies and the global 
need to ensure environmental and climate sustainability, 
India has no choice but to resort to greater use of clean 
nuclear energy.  This could be an area for closer economic 
cooperation between the United States and India and the FS 
expressed hope that India's US partners could be flexible. 
The FS also recounted the potential for technology 
cooperation and co-production in the areas of information, 
defense, and bio-technology. 
 
6. (C) IPR: Senator Bayh noted that India's emphasis on 
innovation would require a strong IPR regime, which would 
find favor among potential US business partners.  Saran 
confirmed that many IT contracts already include IPR 
provisions and India was working on more comprehensive 
legislation that would be in place before the January 1, 2005 
deadline. He elaborated that India is one of the few 
developing countries where services contribute 50% of GDP, 
underlining the importance of IPR to Indian companies. 
 
7. (C) Indo-Pak Relations:  In response to Senator Bayh's 
question about Pakistan PM Aziz's visit, Saran began by 
noting while infiltration attempts had stopped, this was more 
due to Indian efforts to beef up the border fencing in key 
areas, improve its surveillance technology, and winter 
weather.  He said Pakistan had cracked down on some of the 
Jihadi groups inside Pakistan in part to satisfy American 
requests, in part because several had turned against 
Musharraf.  He cautioned, however, that the LET is still 
active, has no restraints imposed on them, and are "more or 
less in the arms of ISI."  The FS also noted India's concern 
that the infrastructure to support cross border infiltration 
remains.  Nonetheless, India remains committed to take the 
peace process with Pakistan forward, according to Saran.  He 
reviewed PM Singh's recent visit to Kashmir and his reduction 
in the number of troops there which had played well in 
Pakistan, despite Musharraf's dismissal of the action as a 
"cosmetic" measure.  He expressed hope that India's action 
would help create "a virtuous cycle" in Indo-Pak relations. 
In response to the Senator's question about the internal 
situation in Pakistan, Saran said Pakistan should have faith 
in its people and that democracy was worth fostering to 
strengthen the fight against the Taliban and Jihadis. 
 
NSA J.N. DIXIT 
---------------- 
 
8. (C) Indo-US Relations: Dixit characterized Indo-US 
relations as on the right track. On the economic and 
technological side, he said India accepts that it must 
address U.S. concerns and provide the necessary incentives 
for U.S. businesses to come to India.  But India needs the 
U.S. to trust India a little more.  He urged America not to 
look at India as another Libya or Iraq, but as a democracy 
and responsible nuclear power.  Senator Bayh praised the 
progress in Indo-U.S. relations on many fronts, but noted 
that deeper operational intelligence cooperation would be 
desirable.  Dixit acknowledged that operational cooperation 
is "not there yet," but he predicted great potential for such 
cooperation as the campaign against terror and organized 
crime proceeds, and as the need for greater maritime security 
cooperation grows.  He pledged that as long as the current 
Congress government is in place, it will work toward greater 
cooperation with the U.S. in these areas.  He told the 
Senator that the FBI and CIA already have good interaction 
with their Indian counterparts and expressed appreciation for 
recent CIA information and security advice regarding 
potential security threats to the PM during his trip to 
Kashmir.  He observed there is no conflict between U.S. and 
India in any field; the only difference is in the "theology" 
of nonproliferation. Senator Bayh saw India's rise as an 
economic and strategic power as inevitable and said U.S. 
wants to help India emerge as a great and responsible world 
power, and in helping to resolve the Kashmir problem.  Dixit 
responded that the U.S. has a role as a friend and 
facilitator and that the U.S. has emerged as a high priority 
in India's foreign, economic and security policies. 
 
9. (C) Iran: Dixit took the opportunity to urge that the 
United States not pursue too punitive a policy with Iran as 
that would only strengthen hard-liners there.  Recalling his 
visit to Tehran in October, Dixit recounted that the Iranian 
President and Foreign Minister had told him Iran will sign 
additional safeguard agreements if deliberations continue 
within the IAEA.  However, if the matter is referred to the 
UN Security Council, Iran may 
reject all cooperation with the IAEA.  The NSA averred that 
the international community should not be blackmailed, but 
does need to encourage the forces of reason and moderation in 
Iran.  Senator Bayh responded that there is strong bipartisan 
support for sanctions against Iran and skepticism that Iran 
is not seeking nuclear weapons. 
 
10. (U) Senator Bayh's staff cleared this cable. 
BLAKE