US embassy cable - 05NEWDELHI997

C O N F I D E N T I A L SECTION 01 OF 02 NEW DELHI 000997 
 
SIPDIS 
 
E.O. 12958: DECL: 01/27/2015 
TAGS: PREL, ETTC, PTER, BG, NP, IN, PK, Indo-US, India-Bangladesh 
SUBJECT: NEW NSA SIGNALS COMMITMENT TO US-INDIA 
PARTNERSHIP, RAISES CONCERN ABOUT "TALIBANIZATION" OF 
BANGLADESH 
 
REF: NEW DELHI 922 
 
Classified By: DCM Robert O. Blake, Jr. for Reasons 1.4 (B, D) 
 
1. (C) Summary: In his first meeting with the Ambassador 
since his elevation as National Security Adviser, MK 
Narayanan identified progress in US-India relations as one of 
the three or four top priorities that the PM has tasked him 
to focus upon.  Although Narayanan was uninformed about Phase 
2 of the Next Steps in Strategic Partnership (PolCouns 
briefed in detail), the NSA understood the importance of PMO 
involvement to maintaining forward momentum, including on the 
NSSP export control benchmarks.  Narayanan also welcomed the 
Ambassador's proposal to stay in close touch on our 
respective regional policies, relating  how King Gyanendra 
had explicitly assured Prime Minister Singh in a January 
telephone call that there would be no Palace move against the 
civilian government.  The NSA was typically preoccupied with 
India's eastern neighbors, warning of creeping 
"Talibanization" in Bangladesh and leadership splits in 
Burma.  On Kashmir, Narayanan assessed that violence is "now 
at one of its lowest levels in 15 years, with a vibrant 
grassroots democracy."  But he also warned that this progress 
is "fragile and cannot be taken for granted."  In a telling 
reflection of the NSA's place in the national security 
hierarchy, Narayanan mentioned on two issues the need to 
check with the Foreign Ministry before getting back to us, 
but also emphasized that he, more than most, is attuned to 
the political realities of coalition government.  End Summary. 
 
2. (C) The Ambassador used a February 7 meeting with 
recently-named NSA MK Narayanan to review major issues on our 
bilateral agenda and to seek a better sense of where 
Narayanan will fit into the new national security team. 
Narayanan continues to occupy the same tastefully decorated 
office he used as internal security adviser, a few steps down 
the hall from the PM's South Block office, but the stacks of 
files on his desk and credenza had grown visibly since the 
last time we saw him there.  Responding to the Ambassador's 
opening presentation, Narayanan explained that Manmohan Singh 
had identified progress in US-India relations as one of the 
three or four top priorities that he expected the new NSA to 
focus upon.  In this context, he was up to speed on issues 
including the Boeing civil aircraft tender (he noted the 
importance of the President's phone call) and discussion of a 
possible Presidential visit later this year.  Although 
familiar with the broad outlines of our Next Steps in 
Strategic Partnership (NSSP) Narayanan was unbriefed on the 
Phase 2 requirements or the status of Phase 1 implementation. 
 PolCouns briefed in detail on the Phase 2 quid-pro-quos, 
reinforcing the Ambassador's hope that the GOI will quickly 
build an interagency consensus for the required export 
control legislation.  Narayanan asked specifically about the 
division of NSSP responsibilities between State and NSC, 
sharing his sense that White House (and PMO) backing had been 
key to getting us this far. 
 
Nepal 
----- 
 
3. (C) The Ambassador noted with concern the pattern of 
insurgency and failing governance that seems to be emerging 
in much of India's periphery, and flagged the need for us to 
coordinate closely, including through intelligence and C/T 
channels.  Honing in on Nepal, Narayanan described King 
Gyanendra as an "enigma," whose declarations the GOI is no 
longer prepared to believe.  To explain this point, the NSA 
described a January conversation in which the King conveyed 
to the PM his decision to postpone a long-anticipated visit 
to New Delhi.  Asked explicitly whether the Palace was 
"planning something," the King said no.  These Palace 
reassurances were conveyed again in late January, so that 
now, Narayanan added, whatever the King says "we will take 
with a ton of salt."  Echoing the Foreign Secretary (reftel), 
Narayanan expressed concern about Chinese efforts to exploit 
the crisis in Kathmandu for bilateral advantage, and was 
pleased that the US had joined India in demarching Beijing on 
the need to oppose the King's action. 
 
4. (C) Looking beyond the immediate situation in Kathmandu, 
Narayanan described a deep crisis of governance, with the 
political parties marginalized, the King hurting democracy 
and a crown prince who is a "loon."  "We can starve the RNA," 
Narayanan noted, but what if that just "strengthens the 
Maoists?"  Narayanan said he did not anticipate any changes 
in the current GOI position, but asked rhetorically how we 
should deal with the Maoists -- pointing to the fact that the 
Palace writ now extends only to Kathmandu, and not beyond. 
 
Bangladesh/Burma 
---------------- 
 
5. (C) Turning to Bangladesh, the NSA described with concern 
what he called a BDG "plan to decimate Awami League leaders" 
adding that this "is not something we can accept as part of 
their system."  He argued that Jamat Islami is now firmly 
entrenched in rural Bangladesh, warning of what he termed the 
creeping "Talibanization" of that country.  PolCouns pressed 
for better US-India information sharing in this area, 
prompting Narayanan to promise to check with the MEA on how 
our dialogue might be intensified.  In addition to spill over 
effects from Bangladesh, Narayanan was also concerned by what 
he called the "apparent divergence" within the leadership in 
Burma, and the risk that India could find itself surrounded 
"by states which are collapsing." 
 
Kashmir 
------- 
 
6. (C) The Ambassador raised Kashmir, asking about conditions 
of governance there.  Narayanan was cautiously upbeat, 
reporting that "violence is now at one of its lowest levels 
in 15 years, with a vibrant grassroots democracy."  But he 
also warned that this progress is "fragile and cannot be 
taken for granted."  (Other Pakistan topics septel). 
Concluding this SA overview, Narayanan offered to pursue the 
idea of an intensified regional dialogue that addresses the 
issues in a less piecemeal manner. 
 
Military Sales 
-------------- 
 
7. (C) The meeting wraped-up with a review of military sales 
issues, building on Narayanan's discussion earlier that day 
with a delegation from the US-India Business Council headed 
by Tom Pickering and Joe Ralston.  The Ambassador cited the 
strong US delegation at Aero-India as evidence of the US 
intention to play in a big way in the Indian military sales 
area.  Narayanan -- who spoke warmly of his past 
relationships with Ambassador Pickering and General Ralston 
-- described the US as "the most important player in the 
market" with a diverse range of offerings.  Nonetheless, 
Narayanan said, "we have a nagging feeling about 
reliability."  The Ambassador argued that US companies are 
well positioned to address the Indian interest in 
co-production, and underlined that the climate for addressing 
reliability issues has totally changed in the US. 
MULFORD