US embassy cable - 05NEWDELHI1113

C O N F I D E N T I A L SECTION 01 OF 03 NEW DELHI 001113 
 
SIPDIS 
 
E.O. 12958: DECL: 02/10/2015 
TAGS: PREL, PGOV, PTER, IN, PK, INDO-PAK 
SUBJECT: NATWAR SINGH TO RESTART INDO-PAK DIALOGUE IN 
ISLAMABAD 
 
REF: A. NEW DELHI 909 
     B. NEW DELHI 586 
     C. 04 NEW DELHI 7494 
 
Classified By: DCM Robert O. Blake, Jr. for Reasons 1.4 (B, D) 
 
1.  (C) Summary: FM Natwar Singh's February 15-17 trip to 
Islamabad will be an opportunity for the two governments to 
re-engage at a high level after a hiatus of nearly two 
months, during which the most important bilateral stories -- 
Islamabad's request for World Bank assistance to resolve the 
Baglihar Dam impasse and the January LOC shelling incidents 
-- were largely negative, and when even the Pakistani cricket 
team's much-heralded February 25-April 18 tour of India has 
run into political hiccups.  For New Delhi, Pakistan has 
taken a back seat to other regional crises in the past month: 
the Tsunami, Nepal, the SAARC summit postponement, and 
resulting tensions with Bangladesh.  Although Mission 
contacts expect no major breakthroughs from Natwar's visit, 
they are upbeat about the resumption of high-level dialogue, 
given the opportunities the two sides lost to engage in Dhaka 
and the interregnum of the back-channel after NSA JN Dixit's 
death.  In addition to setting dates for Composite Dialogue 
(CD) and technical meetings through the summer, the Foreign 
Minister will likely take up concessions the GOI has made 
regarding the proposed Iran-Pakistan-India gas pipeline.  We 
also continue to hear rumors of an accord on the 
Srinagar-Muzaffarabad bus.  End Summary. 
 
Overcoming Recent Setbacks on LOC, Baglihar 
------------------------------------------- 
 
2.  (C) Natwar Singh's February 15-17 trip to Islamabad -- 
the first senior bilateral interaction since the December 
27-28 Foreign Secretaries meeting -- will occur after several 
setbacks in the Indo-Pak relationship.  Islamabad's request 
to the World Bank for a neutral arbiter to resolve the 
Baglihar Dam impasse (Ref A) and the January 18 and 20 
cross-LOC shelling incidents (Ref B) have receded into the 
background, but in the absence of the vigorous diplomatic 
activity of last fall, these negative episodes have 
introduced a note of pessimism into the commentary here on 
the Indo-Pak relationship. 
 
3.  (C) Now that the GOP has initiated the dispute resolution 
process to address the Baglihar Dam impasse, Mission contacts 
agree that New Delhi and Islamabad should let the process 
play itself out.  Former Director of the Observer Research 
Foundation's (ORF) Pakistan Centre Sushant Sareen explained 
that Baglihar could be addressed on its technical aspects, 
unlike the majority of bilateral issues that would require 
political compromise to resolve.  Commodore Uday Bhaskar, 
Deputy Director of the MOD-affiliated Institute for Defense 
Studies and Analysis, agreed with this perspective, as did 
International Centre for Peace Initiatives Director Karan 
Sawhny. 
 
4.  (C) Senior GOI officials seem willing to continue to give 
Islamabad the benefit of the doubt regarding the recent 
shelling incidents.  ORF Senior Pakistan Fellow Wilson John, 
usually a hawk on Musharraf, speculated to Poloff that the 
shelling was probably not an "official" act, but more likely 
the work of "spoilers" carried out either by Kashmir-focused 
terrorists or by low-ranking officers of the Pakistan Army 
acting unilaterally.  IDSA's Bhaskar added that India could 
"absorb" such incidents "to a point," and at the current time 
the GOI valued the peace process far more than retaliation. 
 
5.  (C) It is reflective of the current Indo-Pak malaise that 
even the much-awaited India tour of the Pakistani cricket 
team has become bogged down in wrangling over one of the 
proposed match sites, with Islamabad objecting to playing in 
Ahmedabad for "security reasons," which has been read here as 
a slap at the 2002 communal violence in Gujarat.  Indian 
observers expect the tour to go on, but the politicization of 
South Asia's most popular sport -- which last year played 
such an important role in fomenting mutual goodwill -- has 
cast a small shadow over the generally upbeat atmosphere 
around Indo-Pak people-to-people ties. 
 
Opportunity for the GOI to Refocus on Pakistan 
--------------------------------------------- - 
 
6.  (C) Natwar's trip comes after the GOI has directed much 
of its foreign policy focus elsewhere for the past several 
weeks.  Several regional crises -- the December Tsunami and 
its aftermath, the constitutional coup in Nepal, the 
deteriorating security situation in Bangladesh, and the GOI 
decision to pull the plug on the SAARC summit -- have 
diverted attention away from Pakistan.  ORF's Wilson John 
joked to Poloff that, "For once, the border with Pakistan is 
among India's least concerns."  An MEA Joint Secretary echoed 
this perspective, quipping that India's deteriorating 
relations elsewhere in South Asia have made Indo-Pak issues 
look good.  It took only days for the LOC shelling incidents 
and the Baglihar Dam impasse to disappear from India's major 
daily newspapers.  Against this background, Natwar's 
high-profile trip is expected to generate the momentum needed 
to begin the next round of CD talks. 
 
Prospect for Manmohan Trip in March 
----------------------------------- 
 
7.  (C) One agenda item certain to be on the Islamabad agenda 
will be the GOP's invitation to PM Manmohan Singh to visit 
Pakistan in March.  Coming on the heels of Natwar's trip, and 
given the positive read-out of PM Singh's meeting with 
Pakistani PM Shaukat Aziz in November (Ref C), we expect a PM 
Singh visit would be well received in both countries.  That 
being said, our MEA interlocutors have carefully stuck to a 
"one step at a time" approach to their bilateral engagements, 
and have not committed either way on the PM's travel.  The 
outcome of ongoing state elections and the status of economic 
reform efforts in the budget session of Parliament could be a 
factor here. 
 
Clearing the Way for Pipeline Discussions 
----------------------------------------- 
 
8.  (C) The Indian Cabinet on February 9 authorized Petroleum 
Minister Mani Shankar Aiyar to pursue energy deals with 
Burma, Bangladesh, Iran and Pakistan.  This announcement 
represents a GOI climb-down from the MEA's prior insistence 
on Pakistan extending MFN to India and/or providing transit 
rights for Indian trade to Afghanistan as a prerequisite to 
the pipeline.  In a short conversation looking ahead to 
Natwar's trip, MEA Joint Secretary (Pakistan, Afghanistan, 
Iran) Arun K. Singh indicated to PolCouns that this pipeline 
breakthrough would be a deliverable for the Foreign 
Minister's trip to Islamabad.  On February 11, Petroleum 
Minister Mani Shankar Aiyar told the Ambassador that an 
agreement was "not going to happen easily, quickly, or 
smoothly."  The Energy and Resources Institute's (TERI) RK 
Batra indicated to us that numerous pipeline issues remain, 
including financing, physical protection, and possible ILSA 
restrictions. 
 
Future of Composite and Technical Talks 
--------------------------------------- 
 
9.  (C) Natwar's trip should yield a schedule for this 
Spring's round of bilateral talks, although it would be too 
soon to expect an announcement of an accord on any of the 
Composite Dialogue agenda items (Wullar Barrage, Siachen 
Glacier, Promotion of Friendly Exchanges, Terrorism and Drug 
Trafficking, Sir Creek, and Confidence Building Measures in 
Jammu and Kashmir) or the bilateral technical talks (nuclear 
CBMs, conventional military CBMs, and the Khokhrapar-Munnabao 
rail link).  One major issue that may be ripe for a 
breakthrough is the Srinagar-Muzaffarabad bus route. 
 
10.  (C) J/S Singh told us on February 10 that negotiations 
are continuing, and remarked that "we're close but not quite 
there."  Veteran journalist and Track-Two practitioner Kuldip 
Nayyar was convinced the bus service would begin within the 
year.  Likewise, the "Hindustan Times's" Pramit Pal Chaudhuri 
told us that MEA sources have been promising "something big" 
for the Natwar trip, and suggested that the bus was it. 
International Centre for Peace Initiatives Director Karan 
Sawhny suggested that even incremental movement in any 
bilateral discussions would be critical, to ensure that 
Islamabad continued to find value in ongoing engagement.  A 
more detailed examination of Indian predictions for Indo-Pak 
relations in 2005 follows septel. 
 
Next Up: Trade Talks 
-------------------- 
 
11.  (C) In the next scheduled major bilateral interaction, 
New Delhi will host expert-level trade talks on February 22. 
There are a host of bilateral trade issues, including 
normalizing the trade flows that now transit third-countries, 
intellectual copyright issues, and preparations for the South 
Asia Free Trade Area that is to begin next year.  Further 
details on this event will be addressed septel. 
 
Comment 
------- 
 
12.  (C) Several recent opportunities have passed for Indian 
and Pakistani officials to interact since the Foreign 
Secretaries met last December, including the postponed SAARC 
 
SIPDIS 
summit, and much of the news in the meantime has been 
unhelpful to the peace process.  If Natwar's trip takes place 
as scheduled and both capitals see it as successful, that 
could herald another 6-9 months of diplomatic engagement 
which would be as important as the continued LOC cease-fire 
and possible further reduction in Kashmir-oriented terrorism. 
 The fact that his trip is being heralded as "the first 
bilateral visit of an Indian Foreign Minister to Pakistan in 
17 years" demonstrates the difficulty the Indian media has in 
accurately describing so-called milestones in Indo-Pak 
diplomacy, given last year's hectic calendar of meetings. 
However, the run-up to Natwar's trip is demonstrating the 
new, positive dynamic of Indo-Pak relations, with each senior 
level encounter creating pressure on the bureaucracy to 
generate deliverables of some sort -- and that in turn 
helping to ratchet the two sides further away from conflict. 
MULFORD