US embassy cable - 02KATHMANDU613

C O N F I D E N T I A L SECTION 01 OF 02 KATHMANDU 000613 
 
SIPDIS 
 
STATE FOR SA/INS 
 
E.O. 12958: DECL: 03/26/2012 
TAGS: PREL, PGOV, PTER, NP, IN, CH, India Relations 
SUBJECT: PM DEUBA'S TRIP TO INDIA 
 
REF: A. (A) KATHMANDU 0575 
     B. (B) KATHMANDU 0467 
 
Classified By: POL/ECON MAHONEY.  REASON:  1.5 (B,D). 
 
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SUMMARY 
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1.  (C) Ministry of Foreign Affairs meetings offering a 
read-out of Prime Minister Sher Bahadur Deuba's March 20-25 
visit to India revealed no specifics of any assistance the 
Indians may have offered their smaller neighbor in its effort 
to contain a Maoist insurgency.  Despite the apparent absence 
of tangible deliverables, the lengthy official visit--Deuba's 
first since assuming office last July--gives the PM's sagging 
domestic prestige a much-needed boost.  End summary. 
 
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SOLID SOIL ASSURANCES 
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2.  (U)  Poloff met with Ministry of Foreign Affairs 
Undersecretary Prahlad Prasai March 26 for a read-out of 
Prime Minister Sher Bahadur Deuba's March 20-25 visit to 
India--his first official visit to a foreign country since 
becoming PM last July (Ref A).  The Ambassador also touched 
on the visit in a March 27 meeting with Foreign Secretary 
Madhu Raman Acharya.  Prasai said the invitation from India 
had been a "long-standing" one and there was no particular 
siginificance to the timing.  Deuba was accompanied by 
Commerce Minister Purna Bahadur Khadka; Water Resources 
Minister Bijaya Gachhedar; State Minister for Foreign Affairs 
Arjun Bahadur Singh; State Minister for Science and 
Technology Bhakta Bahadur Balayar; and Foreign Secretary 
Acharya. 
 
3.  (SBU)  Prasai described the visit as touching on all 
aspects of the wide-ranging bilateral relationship, but 
highlighted what the Government of Nepal (GON) views as the 
chief deliverable:  solid assurances from India that its 
"soil will not be used against Nepal" by terrorists or 
insurgents believed to slip back and forth across the border. 
 Prasai acknowledged that Nepal had asked for--and 
received--similar assurances in the past, but stressed this 
time the GON "asked with emphasis."  Poloff asked if the GON 
provided names of particular individuals believed to be on 
Indian territory; Prasai said the discussion was not that 
specific.  He noted Deuba received the same pledge from the 
Chief Minister of West Bengal, where Nepali Maoist insurgents 
are believed to have links.   The Indians also promised to 
beef up border security and made a reciprocal request that 
Nepali soil not be used against India, Prasai reported, 
specifically by Pakistani intelligence agents they believe 
operate in Nepal.  In response to that request, Prasai 
related the GON gave its standard promise to act on any 
report of illegal activity in Nepal that the Government of 
India (GOI) furnishes.   Joint Secretary Gyan Chandra Acharya 
told the Ambassador the Indians had said they would be able 
to do more against the Maoists once the Terrorism Bill passed 
Parliament.  The GON now expects India may begin banning some 
organizations, such as the Maoists. 
 
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PROMISES OF ASSISTANCE 
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4.  (C)  Prasai said Deuba also received general assurances 
that the GOI is "ready to give assistance" to Nepal in its 
effort to counter the Maoist insurgency.  Deuba indicated 
that the GON would welcome "logistic" assistance--i.e., arms 
and equipment but not troops--from its neighbor, but made no 
specific formal request for such equipment.  (Note:  Prasai 
acknowledged equipment requests might have been discussed 
during the one-on-one meeting between the two PMs, but he 
said he could not be certain.  End note.)  Deuba had to 
emphasize in the local press that he made no request for 
foreign troops in order to appease his domestic audience, 
Prasai noted.  In fact, the MFA official said, the subject of 
Indian troops assisting Nepal was never contemplated and did 
not come up during the visit.  Joint Secretary Acharya noted 
to the Ambassador Nepal's delicate geographical position 
between two large neighbors, which necessarily raises 
regional sensitivities about Nepal soliciting or receiving 
military assistance from foreign donors.  Nonetheless, he 
added, during the visit the Indians emphasized their own 
interest in seeing the situation in Nepal stabilize.  The 
Nepalis had in turn stressed that they were seeking only 
"support"--not help in fighting the insurgency--from other 
donors like the U.S. and the U.K. 
 
 
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TRADE AND TAXES 
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5.  (SBU)  Deuba asked that a four-percent tax on Nepali 
imports, imposed by some state governments in excess of 
duties stipulated by the re-negotiated bilateral trade treaty 
(Ref B), be lifted.  The GOI undertook to review the matter, 
Prasai said.  The long-pending completion of a rail link 
between the Nepali border city of Birgunj and the Indian city 
of Raxaul was also raised, Prasai reported, noting that only 
one km of rail line on the Indian side is left.  The 
completion of the rail line and the accompanying Inland 
Container Depot, or "dry port," at Birgunj will cut down the 
substantial storage costs in India that Nepal now incurs on 
third-country imports shipped via Calcutta. 
 
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DAMS AND DEMARCATION 
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6.  (SBU)  Also significant for Nepal, said Prasai, was 
India's commitment to "find a solution before the next 
monsoon" season to flooding in the two southern districts of 
Rupandehi and Banke that Nepal claims is caused by Indian 
embankments.  (Note:  The Indians had earlier temporarily 
suspended construction of the embankments after GON 
complaints last year; there is some suspicion construction 
has since resumed.  End note.)  The Indians also committed to 
finish a long-pending project report on a joint hydroelectric 
project in western Nepal by June.  The two governments also 
agreed to hold bilateral consultations on boundary 
demarcation, especially the disputed territory at Kalopani in 
the far west where India has stationed troops since 1962, 
Prasai said. 
 
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CONSULATE FOR INDIA? 
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7.  (C)  Prasai reported the Indians also raised a previous 
request to establish a consulate on the border in Birgunj. 
He said the GON is reluctant to grant the request, since the 
Chinese would then press for progress on their outstanding 
request to set up a consulate in Biratnagar on Nepal's 
southeastern border with India.  When poloff queried why the 
Chinese would want a consulate so far from their own border 
with Nepal, Prasai responded that the official reason is 
trade--and then speculated that a likelier reason is to keep 
an eye on the Indians. 
 
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COMMENT 
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8.  (C) The GON has long suspected that Maoists find quick 
and easy shelter across the border, and has asked for--and 
received--on previous occasions Indian assurances of 
assistance in blocking that access.  Despite extensive 
official press coverage billing the visit a grand success, it 
isn't clear what specific deliverables--outside of these same 
general assurances of support--Deuba managed to bring back. 
That said, for a PM who faces a violent insurgency in his own 
country and increasingly internecine politicking in his own 
party any message of support, no matter how generic, may be 
welcome.  End comment. 
MALINOWSKI