US embassy cable - 05CANBERRA576

C O N F I D E N T I A L SECTION 01 OF 03 CANBERRA 000576 
 
SIPDIS 
 
E.O. 12958: DECL: 03/24/2015 
TAGS: PREL, PARM, PINR, KNNP, ETTC, ETRD, ENRG, AS, IN, UNSC 
SUBJECT: AUSTRALIA-INDIA BILATERALS: INDIA'S UNSC BID AND 
DEEPENING ECONOMIC TIES WITH CHINA 
 
Classified By: Political Counselor Woo Lee for reasons 1.4(b) and (d) 
 
1.  (C) SUMMARY:  The Australian Department of Foreign 
Affairs and Trade (DFAT) hosted a Senior Officials Meeting 
(SOM) and a strategic dialogue with India March 7-8.  The 
SOM's principal topics were the promotion of bilateral 
economic ties and Australian support for India's bid for 
permanent UNSC membership.  The Australians told the Indian 
delegation that Australia would publicly support an Indian 
permanent seat; however, India would need to further 
strengthen export controls before it could count on the GOA's 
vote.  India also announced that New Delhi and Tokyo had 
swapped pledges of support for Security Council permanent 
membership.  Overall, the Australians thought the strategic 
dialogue elicited more rhetoric than substance from the 
Indians, whose delegation members struck an ideological tone, 
speaking like "old Moscow hands."  Indian officials repeated 
familiar stances on nonproliferation, Iran, and Pakistan, but 
did emphasize that they wanted to expand their economic 
relationship with China.  India also expressed interest in 
joining the Proliferation Security Initiative, but only as an 
"equal partner."  End Summary. 
 
2.  (C) Australia consecutively hosted a Senior Officials 
Meeting and a strategic dialogue with India March 7 and 8, 
respectively, in Canberra.  Rajiv Sikri, Secretary (East) for 
the Ministry of External Affairs (MEA), headed the Indian 
delegation, which also included the Indian High Commissioner 
and the Consul General from Sydney.  DFAT Secretary Michael 
L'Estrange led the Australian SOM delegation and opened the 
strategic dialogue which Deputy Secretary Nick Warner then 
took over.  Poloff received readouts on both the SOM and the 
strategic dialogue from DFAT officials. 
 
3.  (C) Two Joint Working Groups (JWG), one on 
Counterterrorism and Immigration and one on Defense, also met 
on March 7 in preparation for the next day's strategic 
dialogue.  According to DFAT, the two working groups 
discussed but reached no firm decisions on holding seminars 
in Southeast Asia on religious extremism and on managing 
diversity within a democratic framework.  In the CT and 
Immigration JWG, the Australian and Indian delegations agreed 
that Bangladesh was becoming a country of increasing concern 
due to its weak economy and "expanding Muslim population." 
The Australians proposed establishing a third JWG on 
nonproliferation, which the Indian delegation said it would 
consider. 
 
SENIOR OFFICIALS MEETING 
------------------------ 
4.  (C) The March 7 Senior Officials Meeting was held at the 
Secretary of Department level (U.S. Deputy 
 
SIPDIS 
Secretary-equivalent).  Australian officials gave us an 
 
SIPDIS 
overview of the varied agenda that included trade, energy, 
education, tourism, UNSC reforms, and ASEAN.  DFAT India and 
South Asia Section Director Peter Howarth said the SOM 
underscored Australia's new effort to improve its 
relationship with India, particularly in trade.  He noted 
that India was now Australia's 6th largest merchandise export 
market and two-way investment was substantial.  During the 
SOM, the GOA informed the Indian delegation that Australia 
would publicly support India's bid for permanent membership 
on the UN Security Council.  Indian officials requested that 
Australia also talk up India's membership with South Pacific 
nations, which would have several votes to cast on the UNSC 
issue. 
 
5.  (C) Commenting on ASEAN developments, the Indian 
delegation noted that Indonesia was reemerging as a key 
player in Southeast Asia and acknowledged that India wanted 
to be invited to the East Asia Summit.  The delegation stated 
that the region needed to manage China's expanding political 
and economic influence, even though India also saw the 
Chinese market as an opportunity.  In that regard, Indian 
officials informed the Australians that Chinese Premier Wen 
Jiabao would visit India soon.  (NOTE:  Chinese and Indian 
online news sources reported that the purpose of Wen's visit 
would be to "enhance bilateral ties to strategic levels" and 
seek a fair resolution to the longstanding boundary issue on 
the basis of "mutual accommodation and accommodation of 
reality."  End Note.) 
 
6.  (C) The Indian delegation also briefed the Australians on 
the potential development of an Iran-Pakistan-India energy 
pipeline to bring liquefied natural gas (LNG) through the 
three countries.  Although the Indian and Iranian energy and 
petroleum ministers had met recently in India to discuss the 
proposal, Indian officials said their Foreign Minister was 
not very interested in pursuing the project given the 
political considerations and security risks involved.  GOI 
officials asserted that Pakistan had a "terrorism 
infrastructure" that Islamabad had to dismantle.  Indian 
officials also highlighted their concern that 70% of their 
energy came from the Gulf Region. 
 
7.  (C) The two sides also discussed visas and tourism issues 
in the context of the high numbers of Indian visitors to 
Australia.  According to DFAT, India was Australia's third 
largest source of foreign students in its tertiary 
educational institutions.  Indians were also the largest 
recipients, by nation, of Temporary Business Entry visas for 
information and communications technology professionals, with 
a 94% approval rate.  Overall, 50,000 Indians arrived in 
Australia every year on various types of visas. 
 
STRATEGIC DIALOGUE 
------------------ 
8.  (C) In the strategic dialogue that followed the SOM, the 
delegations found a common perspective on counterterrorism, 
but differed on other issues such as Iran's nuclear program. 
Australian officials told us they were disappointed that the 
Indians had resorted to "old-time rhetoric" on 
nonproliferation, Iran, and Pakistan. 
 
NONPROLIFERATION 
---------------- 
9.  (C) The Indians trumpeted New Delhi's work on export 
controls, noting that it was a difficult challenge because of 
the many interested agencies in the Indian system.  GOI 
officials emphasized to the Australians that although India 
was located in an "arc of proliferation," India itself was 
not a proliferator.  India said it had stayed out of the 
Nuclear Nonproliferation Treaty because of "security 
compulsions" emanating from within its own region.  The 
Indian delegation expressed concern about weapons transfers 
from China to Pakistan, and subsequently to Libya and North 
Korea.  Indian officials declared that they were willing to 
join the Proliferation Security Initiative, but only as an 
equal partner.  They indicated that they would either join 
the core group or join as an equal member once the core group 
had been disbanded. 
 
UNSC REFORM 
----------- 
10.  (C) The GOI delegation announced that New Delhi had 
swapped pledges of support for Security Council permanent 
membership with Tokyo under the proposed UN reforms.  India 
believed it had met all the requirements for membership.  GOA 
officials told the Indians that, although Australia would 
support India's UNSC bid publicly as promised at the SOM, 
India would need to strengthen its export controls further 
before it becomes a permanent member. 
 
CHINA 
----- 
11.  (C) The Indian delegation stressed again that India 
wanted to improve its relationship with China, noting that 
there were "growing points of convergence in the 
relationship."  The delegation added that the two countries 
were trying to put aside differences for the sake of broader 
interests such as economic cooperation.  Indian officials 
pointed out that China was their fastest growing economic 
partner.  Nonetheless, they wondered whether China could 
sustain its pace of growth without antagonizing the region or 
others in the international community and whether the PRC 
economic system could handle the growth without the 
modernization of its political system.  The GOI delegation 
believed China needed to be more significantly "factored into 
the calculations" of the First World across the spectrum of 
political, economic, and security issues.  At one point, 
Indian representatives described China and India as being "at 
the center of the universe," noting that the two countries 
had the world's biggest populations and that India 
historically had been one of the two biggest economies in the 
world.  It seemed clear to GOA officials that India was keen 
to expand its economic ties with China and that the 
development of ties between New Delhi and Beijing would bear 
watching. 
 
12.  (C) At the same time, the Indian delegation claimed New 
Delhi also wanted to have a better relationship with Japan 
and talked about "discovering" Japan as a new ally.  Indian 
officials said they had established a security dialogue with 
Japan and had formed a joint study group for trade and 
economic relations. 
 
IRAN 
---- 
13.  (C) The GOI urged Australia not to support efforts to 
bring the issue of Iranian nuclear weapons to the UN Security 
Council.  New Delhi's desire was to keep the EU3 dialogue 
open in the hope that a resolution would come through that 
process.  The GOI delegation added that military action would 
inflame the whole region and that there should be moderation 
in maintaining the EU3-Iran dialogue.  Indian officials also 
suggested that Australia and others were trying to hold Iran 
accountable for not meeting voluntary NPT requirements rather 
than legal NPT obligations.  Iran should be "treated fairly 
and not singled out," they said. 
 
PAKISTAN 
-------- 
14.  (C) The Indian delegation characterized Pakistan as 
exporting terrorism to the region and accused the 
international community of being too soft on Islamabad, thus 
only encouraging Pakistan to behave badly.  India had been 
suffering from terrorism for years, officials noted, but only 
now was terrorism seen as a major problem because the West 
was targeted.  One Indian official asked rhetorically, "Why 
is Bali any worse than Bombay?"  The Indians argued that work 
against extremism should not target just Muslims because 
there were Jewish and Christian extremists as well. 
 
OTHER BILATERALS 
---------------- 
15.  (C) According to DFAT, in May Australia would hold the 
next rounds of continuing strategic dialogues with Indonesia, 
Japan, South Korea, and Vietnam, and hopefully a first round 
with Malaysia if the two capitals could agree on dates. 
 
COMMENT 
------- 
16.  (C) Australia's strategic dialogue with India did not 
address some obvious candidate topics such as missile 
defense, the ASEAN Regional Forum, or the EU arms embargo on 
China.  DFAT officials expressed general frustration that the 
Indian delegation seemed to be full of "old Moscow hands" who 
preferred using "NAM rhetoric" over addressing the issues at 
hand.  Only one delegation member, MEA Additional Secretary 
for International Security Meera Shankar, seemed interested 
in addressing the specific agenda items.  The majority of the 
discussion was more "ideological," dominated by Indian 
officials theorizing that the world was becoming more 
multipolar and that U.S. dominance was transitory. 
 
STANTON