US embassy cable - 05NEWDELHI2550

S E C R E T SECTION 01 OF 14 NEW DELHI 002550 
 
SIPDIS 
 
E.O. 12958: DECL: 04/05/2015 
TAGS: PREL, MASS, MOPS, PTER, IN, Indo-US 
SUBJECT: SCENESETTER FOR ADMIRAL FALLON,S APRIL 13-16 VISIT 
TO INDIA 
 
Classified By: Ambassador David Mulford.  Reason 1.5 (B,D) 
 
1. (C) Summary:  Admiral Fallon, we welcome your upcoming 
visit to India, coming at a time of excellent relations in a 
fast maturing defense cooperation relationship.  You also 
come soon after Secretary of State Rice's first visit last 
month, which has been characterized as the most successful 
visit of any US Secretary of State.  Secretary Rice proposed 
a new and greatly expanded strategic relationship, 
specifically based on the US pledging to help India realize 
its vision to become a world power in the 21st Century. 
Secretary Rice proposed a number of new initiatives on her 
 
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trip, including:  starting a strategic dialogue to discuss 
global security problems, and regional issues such as 
disaster response planning (tsunami), and Nepal and 
Bangladesh.  A newly launched defense initiative will assess 
India's defense requirements and areas for defense 
cooperation to include issues of defense transformation and 
advanced technology.  She also proposed starting a high-level 
dialogue on energy security to include civil-nuclear issues, 
and a working group to strengthen space cooperation.  The 
Secretary and the GOI also agreed that we will revitalize our 
 
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economic dialogue to address legacy problems and establish 
conditions to enable robust growth in exports and 
investments. She also conveyed the President's invitation to 
Prime Minister Singh to visit Washington this summer. 
Secretary Rice also indicated that the US Government will 
 
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authorize American firms to compete in a tender for the 
purchase of 126 multi-role combat aircraft, including the 
F-16 and F-18. This visit has produced the most substantial 
agenda for US-India cooperation ever. As the first senior 
level visitor following Secretary Rice, your views and public 
comments will be closely scrutinized by the media and GOI 
officials looking for clues as to how we will fulfill the 
Secretary's ambitious vision and how quickly we will move 
 
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forward. 
 
2.  (C)  President Bush and Prime Minister Manmohan Singh 
agree that Indo-US relations have "never been as close as 
they are at present." Expanded defense cooperation has been 
integral to our growing ties.  We expect your interaction 
with Admiral Prakash and other defense and government 
officials will present new opportunities to build on our 
existing military cooperation and to help fulfill President 
Bush's vision of a long-term strategic partnership with 
India.  Following Prime Minister Singh's likely visit this 
summer, we expect President Bush to visit India either late 
in 2005 or early 2006.  End Summary. 
 
Defense Cooperation 
--------------------------- 
 
3.  (C) Military ties have developed into one of the most 
important and robust aspects of the US-India bilateral 
relationship and have often led the dramatic improvements in 
relations that we have witnessed since the end of the Cold 
War. However, these ties can only truly prosper within the 
context of the larger bilateral relationship. 
Cooperation is still coordinated through the architecture set 
forth in the Indo-US Agreed Minute on Defense Relations 
signed in 1995, which specified PACOM as implementing 
organization for Service-to-Service programs.  The USD(P) 
Co-Chairs the Defense Policy Group (DPG), the highest 
coordinating body for cooperation. The DPG last met in June 
2004, and we hope to schedule the next DPG this summer. 
PACOM co-chairs the Military Cooperation Group along with 
India's Integrated Defense Staff. The IDS (established well 
after the 1995 Agreed Minute) also has a relationship with 
the US Joint Staff.  Perhaps the DPG should reexamine the 
basis, structure, and methodology for military engagement 
with India as envisioned under the Minute, and in light of 
Secretary Rice's newly proposed framework, as well as changes 
 
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within India's military since the Minute was signed. 
 
4.  (C) The US and India currently enjoy an unprecedented 
level of military cooperation, thanks mainly to PACOM's 
efforts and resources. The framework laid out by Secretary 
Rice promises to take that security relationship to new 
levels, including cutting edge issues of defense 
transformation such as co-production, early warning systems, 
and command and control systems. We now routinely engage in 
mil-mil exercises of growing scope and sophistication.  I was 
pleased to attend the USN hosted reception for the MALABAR 
2004 Naval Exercise, which included the first visit of a US 
nuclear powered warship to India, the first use of the newly 
developed USN-IN Standard Operating Procedures (SOPs), our 
first sub vs sub exercise, and the first use of the Navy 
Fuels Transfer Agreement.  I also attended an excellent Army 
exercise at the Jungle Warfare School in India's North-East. 
In another example of our growing exercise program, during 
Cooperative Cope Thunder in July 2004, the Indian Air Force 
deployed four Jaguars and an IL-76 tanker to Alaska - as a 
demonstration of their newly acquired tanking capability. 
These exercises, and numerous others, were well covered in 
the Indian press and viewed as opportunities for the Indian 
military to demonstrate their professional prowess and to 
gain credibility as a regional power.  Our recent mil-mil 
cooperation in tsunami relief in Sri Lanka and elsewhere can 
provide a template for what we expect will be increased 
Indo-US cooperation to manage crises and address common 
threats in the region from Southeast Asia to the Arabian Gulf 
and East Africa. 
 
 
Defense Equipment Sales--Underexploited 
------------------------------------------- 
 
5.  (C) Although our military sales relationship remains 
underdeveloped, the GOI's serious consideration of US 
suppliers for its next generation multi-role fighter reflects 
a new willingness to consider the US for a major hardware 
purchase. (Secretary Rumsfeld's engagement was critical to 
our ability to bid for this tender.)  Since final procurement 
decisions will be made at a political level, continued senior 
engagement will be necessary to succeed in this mission. 
Despite some political backlash following the US announcement 
of F-16s to Pakistan, we expect to receive the RFP on the 
Multi-Role Combat Aircraft competition in the next 1-2 
months.  US arms sales have struggled to overcome the 
perception that the US is not a dependable partner (based on 
our past sanctions), and heavy competition from the Russians, 
Israelis, and French for a very price sensitive customer.  We 
believe a significant contract would further cement Indo-US 
defense ties.  We continue to see serious potential for the 
sale of P-3C Orions, and the chance to compete for multi-role 
combat aircraft. During Admiral Prakash's recent visit to the 
US he indicated a strong desire to move quickly on 
acquisition of P-3Cs, even requesting leasing two P-3's as an 
interim solution. In 2004 the Indian Navy signed a LOA for 
Deep Submergence Rescue Vehicle services worth $700,000 and 
they have indicated a desire to test this capability as soon 
as possible.  The recently enacted budget includes a 7.8 
percent increase for the military to fund ongoing 
modernization and purchases.  Up to this point the major arms 
sales have remained 200 million USD for 12 An-TPQ-37 
Firefinder Radars, and 14 USD million worth of Special Forces 
Equipment. 
 
6.  (C)  Senior Indian officials, however, remain concerned 
and Defense Minister Pranab Mukherjee reminded observers that 
'for us, the two main criteria are dependence as a source of 
supply and transfer of technology' during a visit the 
Aero-India aviation show in January 2005. Unfortunately, 
there is still no galvanizing example of a major defense 
procurement deal to inspire confidence. We hope the P-3C 
contract will help build Indian trust.  (See paras 43-48 for 
more details). 
 
Your Host, Admiral Prakash 
------------------- 
 
7.  (C) I think you will find Admiral Prakash to be a highly 
professional and thoughtful officer, well disposed toward the 
United States, and progressive in his thinking. He just 
returned from his counter-part visit to the US, hosted by the 
CNO. (He also attended school with Admiral Walter Doran). 
His visit to CONUS (and then PACFLEET) was successful and 
indicated a strong desire to expand the relationship through 
hardware purchases, training, and Naval institutional 
linkages. He will be direct and engaging in conversation.  He 
attended the US Naval War College, graduating in 1990.  He 
has fond memories of his time in Newport, and during his 
visit took the opportunity to speak at the college.  Admiral 
Prakash is a Naval Aviator with 2,500 hours of flight time. 
He attended flight training in the UK and was the first 
commanding officer of an Indian Navy Harrier squadron.  He 
has commanded four ships including the Indian Navy aircraft 
carrier INS Viraat.  He was promoted to flag rank in 1993 and 
as a Rear Admiral served as the Commander of the Eastern 
Fleet.  As Vice Admiral he served as the Commander-in-Chief, 
Andaman Nicobar Command (India's only operational joint 
command), and Commander-in-Chief, Western Naval Command.  He 
was appointed Chief of Naval Staff and promoted to Admiral in 
August 2004 and became the Chairman of the Chiefs of Staff 
Committee (roughly analogous to CJCS) in January 2005. 
 
8. (C) Admiral Prakash leads a highly professional, 
regionally dominant Navy with growing capability and blue 
water aspirations.  Most importantly, India shares many of 
our key maritime concerns - maritime terrorism, use of the 
seas for proliferation of WMD, safety of sea lines of 
communication (particularly for Arabian Gulf Oil), piracy, 
smuggling, and un-regulated dhow traffic.  Regrettably, we 
expect Admiral Prakash's leadership will be somewhat 
constrained by a lumbering and sometimes corrupt bureaucracy 
(particularly in procurement), a coalition government that 
includes representation of two regional Communist Parties, 
and some old-think (in a few cases anti-American) government 
officials.  We ask that you join us in continuing to search 
out practical, mutually beneficial ways to expand military 
cooperation, understanding that this is part of a long term 
effort to build a substantial, reliable, mutually beneficial 
21st century partnership with India.  A priority in this area 
is to bring India into the Proliferation Security Initiative 
(PSI), since it has unique assets it can bring to bear in 
this region. 
 
"Jointness" and Chairman, Chiefs of Staff Committee 
--------------------------------------------- ------ 
 
9.  (C)  As the senior of the three Indian Service Chiefs, 
Admiral Prakash is the default Chairman of the Chiefs of 
Staff Committee. His two main charters are first, to 
represent the combined service's opinion on major defense 
issues to the central government and MOD.  Second, he 
supervises India's four year old Integrated Defense Staff 
(IDS)-India's Joint Staff, whose role and authority are still 
evolving. The Chief of the Integrated Defense is Vice Admiral 
Raman Puri, who directs the daily operations of the IDS, and 
who reports to Prakash.  There is no Indian 
"Goldwater-Nichols" Act to drive "jointness" in their system 
and the GOI has again deferred its decision on appointment of 
a four star Chief of Defense Staff who would in efect,b 
in charge of all military matters.  Thus, each sevice chief 
still commands and controls his servie.  Three joint 
organizations that fall under theIDS are Andaman and Nicobar 
Command, Strategic Frces Command, and DIA. 
 
10.  (C) During its development, the IDS had counterpart 
talks with joint staffs from US, UK, Italy, Japan, Australia, 
and Germany. The IDS borrowed ideas mainly from US and UK 
models.  The main challenges facing the IDS are establishing 
an operational role, drafting a joint doctrine, gaining sway 
over defense budget priorities, and incorporating joint 
intelligence efforts. Fundamentally, the single services 
drive each of the service's war planning and execution--there 
is still no approved joint doctrine for the Indian armed 
forces. 
 
Asymmetries with US System 
------------------------------------------ 
 
11.  (C) India has no direct counterpart to the Marine Corps 
or to joint special operating forces as embodied in the US 
SOCOM; high-level joint headquarters are not as integral to 
the Indian military hierarchy as they are in the US system. 
These asymmetries add substantially to the coordination and 
planning burden required of any bilateral activity (deciding 
how to engage multiple Indian services in order to take 
advantage of a US Marine unit passing through the Indian 
Ocean, for instance.) Such challenges can be and have been 
overcome with imaginative staff work, but they are not 
inconsiderable; they can impose additional preparation time 
and require persistent attention even when they are focused 
on training or exercises that address the highest priorities 
on the Indian agenda (such as special forces exchanges). 
 
Bureaucratic systems 
------------------------ 
 
12. (C) Bureaucratic structure has also been an obstacle on 
the Indian side.  Given their limited roles in the Indian 
governing establishment, the MoD and the services have not 
traditionally had a large foreign policy function.  Moreover, 
until the opening of US-India defense engagement in the 
1990s, India had never had a bilateral defense relationship 
of the type the US has developed with dozens of friends and 
allies. The Indian link with the USSR was centered on 
hardware, technical training and logistical support; it did 
not encompass the broad array of exercises, exchanges, 
discussions and military sales that the United States 
considers part and parcel of a normal defense relationship. 
There is thus an organizational asymmetry between us with no 
Indian counterparts to the policy offices and the staff 
sections specifically designed to conduct interaction with 
foreign militaries that are found in the US DoD, the Joint 
Staff, the Service headquarters and the Combatant Commands. 
This structure poses a capacity challenge on the Indian side 
that can impede progress and delay potentially fruitful 
cooperation.  Among other things, this means that we have to 
calculate how much cooperation the Indian structure can 
manage at any one time and that excellent short-notice 
opportunities can be lost because the Indian side is not 
staffed to cope with manifold activities without extended 
lead time. 
 
Lumbering process 
------------------ 
 
13. (SBU) The Indian bureaucracy is large and slow moving. 
Every case revolves around a "file" that contains everything 
related to the case and which must physically move from one 
agency to another for approval.  There is little delegation 
of authority, so decisions of any importance are made at very 
high levels. (The Prime Minister himself decided on India's 
MPAT participation with CSF-536 during tsunami relief 
operations.) In general, decisions are made by committee, 
which diffuses responsibility and is a legacy of past arms 
scandals.  One by-product of past arms scandals is that the 
Indians are beginning to prefer FMS to DCS for defense sales 
because government-to-government transactions have less 
potential for allegations of corruption. 
 
Intelligence Exchange Agreements 
------------------------------------------ 
 
14. (S/NF) The overarching intelligence exchange agreement is 
"Morning Dew" signed in July 2003 between our two DIAs. There 
have been two intelligence exchange conferences between the 
DIAs, but little progress has been made in the routine flow 
of information from the Indian side mainly due to India's 
DIA's slow institutional development and challenges in its 
relationship with India's three service intelligence 
organizations.  Moreover, US Foreign Disclosure policy limits 
us from exchanging information most desired by the 
Indians-such as information on Pakistan, Nepal, and 
Bangladesh. 
 
15. (S/NF)  We have been exchanging intelligence information 
with the Indian Navy under the Morning Dew agreement on 
issues such as suspect merchant vessels, and information on 
China.  Although we provide information to the Indian Navy 
routinely through the bilateral (secret rel India) circuit, 
they have provided little in return.  For their part, the 
Indian Navy has voiced dissatisfaction with the type of 
information provided.  They routinely request "actionable" 
intelligence.  During RADM Porterfield's 9-12 January visit 
the Indian Navy was provided with detailed information about 
two high interest vessels.  The Indian Navy responded quickly 
with useful information regarding one of the vessels (in an 
Indian port) and promised more to follow.  They recently 
provided photographs of the Chinese heavy l)vll have moved to a new and 
ar more satisfying level of 
cooperation. 
 
Benefits of Defense Engagement with India 
----------------------------------------- 
16.  (C)  Secretary Rice's visit highlighted the US strategic 
objective of strengthening India's role as a major world 
power.  At the regional level, good military-to-military ties 
can contribute to US interests in combating terrorism, 
fostering regional stability, securing sea lines of 
communication through the Indian Ocean, rebuilding 
Afghanistan and countering the spread of narcotics. 
Similarly, enhanced US-Indian military cooperation supports 
humanitarian operations and peacekeeping actions in the 
regions adjacent to South Asia. 
 
17. (C)  As demonstrated by collaborative efforts over the 
past decade, some of the benefits from expanded cooperation 
will be tangible and will manifest themselves in the 
near-term.  Joint US-Indian naval patrols in the Straights of 
Malacca during 2002, coordination of tsunami relief 
operations, and coordination of policies regarding the 
vicious Maoist insurgency in Nepal stand out as three 
examples of recent interactions where US and Indian 
militaries have played an important role in developing and 
implementing national policy with near-term impact. 
 
18.  (C) Likely Indian Subjects May Be Raised During Your 
Visit 
------------------------------------------ 
 
--Desire to expand US-India defense cooperation and the 
agenda for our new dialogue on defense transformation and 
interoperability 
--Major US Arms Sales to Pakistan and their impact on the 
Composite Dialogue 
--Pakistan's role in supporting terrorists against India 
--Greater/more rapid access to US Defense Technology 
--Access to Net-Centric Command and Control technologies and 
doctrines 
--Desire for regular interaction with CENTCOM & NAVCENT 
--More Coordination on military assistance to Nepal 
--Greater Indian role in Afghanistan 
--Cautious attitude on Iraq 
--Cooperation on energy security in the northern Indian Ocean. 
--Indian Ocean Security 
--Better/more effective exchange of "actionable intelligence" 
--Prospects of a full time India LNO at PACOM and CENTCOM 
--Acquisition Cross Servicing Agreement 
 
Political Background 
----------------------------- 
 
19. (C) PM Singh's Congress Party came to power in an upset 
election victory over the BJP-led coalition in May 2004. 
Although Singh's senior advisors had been out of power for 
eight years, they wasted no time articulating their 
priorities for India's foreign and defense policies.  They 
have stressed that an expanded and mutually beneficial 
partnership between India and the US on regional and 
transnational security issues is a high priority for the new 
government.  Defense Minister Pranab Mukherjee sees practical 
advantage in cooperating with the US to modernize India's 
military equipment and strategy while advocating transparency 
in defense acquisitions.  Foreign Minister Natwar Singh, who 
will be in Washington to meet Secretary Rice during your 
visit, has also moved much closer to the US, stepping away 
from his historical views on non-alignment. 
 
20. (C) As noted in "The Congress Agenda on Security, 
Defense, and Foreign Policy," the Party seeks to improve the 
function and transparency of India's natL7G 
t#QSQ concentrated 
national security decision-making largely in the Prime 
Minister's office, Congress has a more diffuse, transparent, 
and collective approach which utilizes a resuscitated 
National Security Council (NSC), expanded Cabinet Committee 
on Security (CCS), and reenergized Strategic Policy Group 
(SPG) and National Security Advisory Board (NSAB). 
 
21.  (C) Coalition governments are likely to be the norm in 
India's parliamentary democracy for the foreseeable future, 
so senior Indian leaders will be sensitive to events that can 
be portrayed as foreign policy failures or miscalculations by 
its domestic opponents.  Potential problem areas for the 
ruling party include military-to-military activities. 
Although most of these activities are considered routine by 
US audiences in the Congress and in the broader public, they 
can become lightning rods in India.  The failure to acquire a 
high-profile item of hardware or technology, for example, or 
the appearance of sacrificing India's cherished foreign 
policy autonomy in some way can create frictions inside the 
ruling coalition or can be used by opposition parties to 
attack the government for staking too much on relations with 
the United States. 
 
22.  (C) Defense Minister Mukherjee, an economist and former 
Foreign Minister with little defense background, will likely 
acquiesce to the collective Congress leadership (include 
Sonia Gandhi, who remains the ultimate power or matters of 
domestic politics) on matters requiring broad consensus.  A 
proponent of maintaining strong mil-mil tis with Russia, we 
expect Mukherjee to adhere to he larger Congress agenda 
toward the US by contiuing to move US-India defense ties 
forward, albet with less supportive public rhetoric than the 
BP, out of deference to the leftist parties.  He ma visit 
Washingtn and he Pentagon in late June. 
 
Next Steps in Strategic Partnership 
---------------------------------- 
 
23.  (C/NF) On Septemer 17, 2004 the US and India signed 
Phase One of he President's "Next Steps in Strategic 
Partnersip" (NSSP).  The NSSP lays out an ambitious path o 
cooperation in four strategic areas:  civil nucear energy, 
civilian space programs, high-technoogy commerce, and 
dialogue on missile defense.  Tese areas of cooperation are 
designed to progress through a series of reciprocal steps 
that build on each other.  Completion of Phase One has 
enabled the US to make modifications to US export licensing 
policies that will foster cooperation in commercial space and 
civilian nuclear energy programs, remove the headquarters of 
the Indian Space Research Organization (ISRO) from the 
Department of Commerce's "Entities List," and offer an FMS 
sale of the PAC-2 missile defense system.  On February 22, 
the GOI received a classified briefing on the capabilities of 
the PAC-2 GEM PLUS missile defense system as a deliverable 
for successful completion of Phase One.  The Indian 
government has now requested a missile defense technical 
cooperation agreement of the sort we have with other key 
allies.  This month, three Indian's will observe the Roving 
Sands MD exercise in Texas at the SECRET level.  In his role 
as Chairman, Chiefs of Staff Committee, Admiral Prakash will 
have a role in shaping Indian nuclear and missile defense 
policy.  We believe his recent visit to NORAD was proposed by 
the Indian Navy specifically to offer Admiral Prakash a view 
of US policy in these areas. 
 
24.  (S) Phase Two of the NSSP requires intensive efforts by 
the GOI to adopt national legislation governing technology 
transfer, adhere to the Missile Technology Control Regime and 
Nuclear Suppliers Group guidelines, and strengthen export 
controls. The GOI has promised movement on these issues. In 
turn, the US commits to undertake new cooperation on 
US-Indian commercial satellites, approve the sale of the 
PAC-2 system and offer a classified briefing on the PAC-3 
system.  Until now, the Indian Ministry of External Affairs 
(MEA) has the lead in this effort, with the MOD playing a 
supporting role. 
 
Tsunami Relief 
 
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--------------- 
 
25. (C) The Indian military reacted exceptionally well to the 
recent tsunami disaster.  The rapid and effective deployment 
of resources to Sri Lanka, the Maldives and later Indonesia, 
in addition to India's hard hit Andaman and Nicobar Islands 
clearly demonstrated India's regional force projection 
capability.  At the peak of operations, the Indian Navy had 
31 ships, 22 helicopters, four aircraft and 5,500 personnel 
assigned to disaster relief.  The Air Force, Army and Coast 
Guard were just as heavily involved.  The Indian military was 
hit hardest on the island of Car Nicobar.  The Indian air 
force lost 103 personnel on this island and the Navy lost 
about half that.  During the operation, the Indian Navy 
converted three hydrographic ships to 47 bed hospital ships 
(a design feature of the class) and sailed them to Sri Lanka, 
Indonesia and Chennai, India.  During the relief effort the 
Indian military was unusually responsive to questions about 
their intentions and provided almost daily briefings.  We 
reciprocated with the PACOM force lay down.  The Indian 
government also coordinated closely with us as a founding 
member of the Tsunami Core Group.  Later, India provided two 
MPAT planners to CSF-536 in Utapao, Thailand and sent a 
liaison officer (Indian Naval Attache in DC) to PACOM Hqs and 
a liaison officer to CSF-536 (Indian Air Attache in Bangkok). 
 This exchange of information assisted both countries in 
channeling relief to those areas most in need while avoiding 
duplication of effort. 
 
PSI, CSI, RMSI 
-------------- 
 
26. (C) Despite skepticism among some strategic commentators, 
New Delhi continues to express interest in the Proliferation 
Security Initiative (PSI) and other maritime security 
initiatives, but not as a junior member and not without 
concern about possible contravention of international 
maritime conventions.  The GOI continues to inquire about the 
status of the PSI Core Group, suggesting India be offered 
Core Group membership (or that the Core Group be disbanded) 
before it will consider participation in the initiative.  We 
are urging Washington to respond to India's approaches, 
believing that PSI is a vehicle for bringing India into the 
global counter-proliferation community and changing India's 
historic role as a regime outsider.  In contrast, the GOI has 
already agreed to join the Container Security Initiative 
(CSI).  This may be a stepping-stone toward greater 
cooperation with India on other maritime security issues, 
outside the political obstacles posed by PSI.  Indian Navy 
leaders see Regional Maritime Security Initiative (RMSI) as 
an interesting concept that has yet to take shape. 
 
Cooperative Security Locations (CSL) 
------------------------------------ 
 
27.  (C) DoD is looking to extend its air transportation 
fleet reach to world regions that to a great extent were 
previously unconsidered.  Indian airfields and ports hold 
tremendous potential for CSLs. However, we have not broached 
this idea with the GOI, nor do we think it can soon be 
deployed during this divided political climate in Delhi. We 
believe the ACSA with India has remained hung up within the 
Indian system because of concern that ACSA implies granting 
basing rights.  We spend a great deal of energy disabusing 
them of this misconception.  We are close to resolution on 
ACSA, but the idea of CSLs would be political dynamite here 
as the opposition parties and left would exploit this against 
the ruling party. We still have a difficult time gaining 
approvals for PACAF TERPS to access airbases because of 
Indian security sensitivities. 
 
Pakistan 
-------- 
 
28.  (C/NF) While India and Pakistan are currently in their 
most intense period of dialogue in decades, the GOI continues 
to place a high priority on containing Pakistan's nuclear 
threat.  Following the positive Indo-Pak Foreign Ministers' 
talks (dubbed the "Composite Dialogue" or "CD"), the 
successful Singh-Musharraf meeting in September, and an 
attempt at developing  a "Kashmir Roadmap" based on the PM's 
first visit to Kashmir in November,  a mood of cautious 
optimism has emerged in India that Islamabad and New Delhi 
have indeed started on a path of sustainable rapprochement. 
During these recent CD meetings, India put forward a total of 
72 CBMs, of which Indian FM Singh and his Pakistani 
counterpart FM Kasuri agreed to 13 including to: continue the 
LOC ceasefire; conduct a joint survey of the International 
Boundary along Sir Creek; implement the outcome of the August 
meeting of Defense Secretaries regarding the Siachen Glacier; 
and discuss trade cooperation.  The Ministers also agreed to 
technical talks on conventional and nuclear CBMs among other 
issues during the fall.  As expected, the two sides disagreed 
on infiltration levels and the centrality of Kashmir, but 
have expressed commitment to continue their dialogue on these 
issues.  The February 16 agreement to begin bus service 
between Srinagar and Muzaffarabad beginning April 7 has been 
hailed as the most important Kashmir-specific CBM since the 
November 2003 ceasefire. 
 
29.  (S) Despite Indian allegations of mortar firing by 
Pakistan against Indian positions along the LOC twice in 
three days (January 18 and 20, 2005), both governments 
responded in a measured and serious manner, conscious that 
the 16 months of silence along the LOC had come to symbolize 
the de-escalation of the Indo-Pak conflict, while providing 
tens of thousands of Kashmiris the longest respite from daily 
shelling since the 1999 Kargil War.  The ceasefire, the first 
formally observed in peacetime between the two countries 
since 1947, has fueled hopes for broader progress in military 
CBMs.  These instances of shelling, if they resume, could 
spill over into the Composite Dialogue and negatively affect 
the broad sense of goodwill that exists in India for fixing 
relations with Pakistan. 
 
30.  (C/NF) Despite positive progress on these pending issues 
and growing acceptance of "de-hyphenating" America's 
relationships with the two neighbors, the recent US decision 
to provide F-16  to Pakistan has brought long-held fears to 
the fore again.  The widely-held view in India is that such 
weapons are inappropriate for destroying terrorist assets and 
that Islamabad ultimately seeks F-16s as a nuclear weapons 
delivery system to be used against New Delhi, thereby 
sparking a regional arms race.  Moreover, Indians often 
complain of a lack of balance in US policy which Indians 
believe favors Pakistan.  The US is seen as soft on 
proliferation issues regarding Pakistan and harsh in its 
judgment on India.  The fear among the Indian security and 
military establishment is that new weapons for Pakistan will 
cause Pakistan to become more aggressive against India. 
Secretary Rice's far reaching initiatives helped mute Indian 
 
SIPDIS 
criticism of the announcement of F-16s for Pakistan, but you 
should expect to hear criticism from your interlocutors. 
 
Siachen Glacier 
--------------- 
 
31.  (C) In 1984, India and Pakistan occupied parts of the 
Siachen Glacier and the Saltoro Ridge, which became the 
highest altitude battleground in the world.  Siachen is 
politically relevant as it is linked to unresolved border 
disputes with Pakistan and China.  This remote region lacks 
military strategic relevance, leading many Indians to 
question the economic cost of such a burdensome deployment. 
In 1994, in an effort to lower tensions, New Delhi and 
Islamabad almost reached an agreement on demilitarizing the 
Glacier.  If redeployment/demilitarization along the Siachen 
Glacier were to take place, monitoring mechanisms would need 
to be implemented to provide both sides confidence that 
reoccupation of the ridge lines was not occurring.  The 
cease-fire along the LOC on the Glacier, in effect since 
November 26, 2003, remains in effect, and the two sides 
continue to discuss the matter as part of the Composite 
Dialogue.  India's main demand is that positions currently 
occupied by both armies be verified prior to any reciprocal 
withdrawal. 
 
Afghanistan 
----------- 
 
32.  (C) On Afghanistan, India has backed up its strong 
political support for President Karzai with generous economic 
assistance (over $500 million).  India provided in-kind 
assistance for the October elections, has offered to assist 
in training Afghan diplomats, army, and police, and has 
committed to construction of a power line connecting Kabul to 
Baghlan province in the north.  With the imminent completion 
of the GOI program to outfit the ANA with military vehicles, 
New Delhi is now assessing what more India might do to assist 
with the Afghan Army's development. 
 
Iran 
---- 
 
33.  (C) India views Iran as a source of energy, a corridor 
for trade to Central Asia (most importantly to Afghanistan), 
a partner in stabilizing Afghanistan, and as a counterweight 
in Pakistan's regional calculations.  Increased high-level 
exchanges and intensified cooperation in the energy sector 
illustrate the degree to which the GOI values the 
relationship.  There has been considerable movement recently 
in the Indian position on the proposed Iran-Pakistan-India 
pipeline.  India has removed its Most Favored Nation and 
transit corridor conditions and given Cabinet backing for the 
Petroleum Minister to negotiate with Iran and Pakistan.  At 
the same time, the GOI is strongly opposed to Iran's 
acquisition of nuclear weapons.  New Delhi is pursuing a 
low-key but engaged policy toward Iran, attempting to achieve 
its strategic goals in the Gulf without jeopardizing its 
growing ties with the US or Israel.  New Delhi portrays 
itself as a moderating influence on Tehran, particularly on 
nuclear issues where Indian and US interests on 
nonproliferation converge. I have outlined for India's energy 
minister the USG's concerns about large scale energy 
cooperation with Iran because such cooperation could bolster 
Iran's support for terrorism with its efforts to acquire WMD. 
 
Nepal 
----- 
 
34.  (C) New Delhi responded swiftly and with unusual 
firmness to King Gyanendra's February 1 decision to dissolve 
the multiparty government in Nepal and reserve all power for 
himself, calling the action "a serious setback to the cause 
of democracy."  The GOI has expressed a strong desire to 
coordinate with the United States as the situation unfolds in 
Kathmandu and remains concerned about the effect of the 
King's actions on the ongoing Maoist insurgency.  Prior to 
these developments, New Delhi had expressed concerns about 
the Maoist influence in Nepal, the potential for violence and 
political instability to spill over into India, and 
repercussions for Indian interests in Nepal.  The US and GOI 
have coordinated closely in response to the coup, providing a 
template for the sort of security partnership we would like 
to apply elsewhere.  Although we have not joined India in 
publicly declaring a suspension on supplies of weapons, the 
US and India broadly agree on the problem and the way forward. 
 
Bangladesh 
---------- 
 
35.  (C) The wave of terrorist attacks in early October in 
the northeastern Indian states of Nagaland and Assam are 
raising alarms that violence and political instability in 
Bangladesh are now affecting India, courtesy of the United 
Liberation Front of Assam (ULFA).  These follow other 
incidents such as the August attack on former Prime Minister 
Sheikh Hasina and seizure of a major arms shipment in 
Chittagong in April.  Dhaka has accused New Delhi of 
contributing to its deteriorating political situation while 
Delhi maintains that the source of Bangladesh's problems is 
Islamic fundamentalism and terrorists the GOB is unwilling or 
unable to control.  Despite these differences, both 
countries' Foreign Ministers recently agreed to work together 
to address each others' security concerns.  The GOI is also 
considering increasing its deployment of security forces 
along its border with Bangladesh and constructing a fence, 
similar to the LOC fence in Kashmir, along the border. 
 
Iraq 
---- 
 
36.  (C) The escalating violence in Iraq in 2004, including 
the taking of Indian hostages in July (who were subsequently 
released), stories of abuse of prisoners, and inaccurate 
reports of mistreatment of Indian laborers by US forces and 
companies in Iraq hardened Indian public opinion against 
Coalition activities.  The GOI, however, has a strong 
interest in stability in Iraq and wants to preserve its 
historic cultural, economic and political links with Baghdad. 
 Although their line remains firm against sending troops to 
Iraq, the GOI has already disbursed half of its $20 million 
commitment to Iraqi reconstruction, split evenly between the 
UN and World Bank Trust Funds, and has welcomed ideas of 
where India might do more. We suggested that India might help 
Iraq revamp its judicial sector. 
 
37.  (C) Despite the GOI's deliberately low profile public 
and material support in the run-up to the elections, Indian 
Government, media, and other observers welcomed the 
successful completion of Iraq's first election on January 30. 
 The MEA called the election a "noteworthy development" and 
reaffirmed Iraq's strategic importance to New Delhi. 
Circumspect about engaging the interim regime, the GOI will 
likely engage the new Baghdad government with more 
conviction, although practical and security concerns and 
continued opposition from India's left wing parties will 
present obstacles to a more visible Indian presence in the 
near future. 
 
China 
----- 
 
38.  (U) India's "Look East" policy, initiated in the 1990s, 
envisions India as an equal player in the greater Asian 
community, ideally and eventually as influential as China. 
Beijing, on the other hand, does not view New Delhi as a 
geographic, strategic, or economic peer. The upcoming visit 
April 9-12 visit of Chinese Premier Wen is likely to give new 
momentum to Sino-Indian dialogue on the long-standing border 
dispute between the two countries. While India's direct 
dispute with China about its border does not present much of 
a hurdle, China's supply of material and technology to rival 
Pakistan has been a more formidable obstacle to relations 
between the two countries.  Much of India's political class 
continues to see China as a long term military, economic, and 
political challenge if not threat.  Booming trade between the 
two countries is contributing to a softening of long held 
suspicions, however. 
 
Russia 
------ 
 
39.  (C) By far the largest supplier of military equipment to 
India for decades, Russia's exceptional military relationship 
with the country is guaranteed for a long time to come and 
was reaffirmed by Russian President Putin's December 04 visit 
to Delhi.  The inconsistent quality of Russian-made materiel 
as well as the difficulty of obtaining spares since the 
break-up of the Soviet Union are common complaints among the 
Indian military.  The Indians, however, are shopping more on 
the global market for other sources of weaponry -- namely 
Israel and France -- to improve their military capabilities. 
While not reneging on its traditionally strong bond to 
Russia, the Congress Party has made it clear that more effort 
must be spent on fostering India's relationship with the US 
on a variety of fronts, especially in the areas of defense 
and high-tech. 
 
Israel 
------ 
 
40.  (C) Despite the return to power of India's traditionally 
pro-Palestinian Congress party, the robust Indo-Israeli 
relationship established under the previous government does 
not appear to have lost steam, at least privately.  This is 
largely a result of India's growing reliance on Israel for 
military hardware, technology, and training, and Israel's 
streamlined and less public arms sales process.  Although 
official figures are not available, Israel appears to be 
India's number two supplier of military hardware (behind 
Russia).  Most recently, India signed a $1.5 billion contract 
for three Phalcon airborne radars.  Previous deals included 
infantry and special forces equipment, UAVs, aircraft 
avionics, Barak missiles, sensors for defense above the LOC, 
Green Pine radars, and assorted munitions.  New Delhi is also 
considering acquiring the Arrow ATBM from Israel, and is a 
strong contender for a multi-billion dollar contract to 
upgrade and modernize the Indian Army's artillery.  Recent 
reciprocal visits by top  brass from both armies are paving 
the way for the first ever joint military exercises between 
the two countries which may be held in India some time in 
2005.  Publicly the UPA government has been less willing to 
embrace Israel than previous BJP government because of 
Congress' longstanding ties to the Palestinians. 
 
An Evolving View on Indian Ocean Security 
----------------------------------------- 
 
41. (C) Indian Ocean security issues have become increasingly 
important in GOI strategic thinking as India has become more 
dependent on foreign sources of energy (primarily oil and 
natural gas), while deepening its commercial and security 
ties to Southeast Asia and the Middle East.  The Indian Navy 
considers its area of responsibility to extend from the 
Strait of Hormuz to the East Coast of Africa to the Strait of 
Malacca.  This strategic perception drives the Indian Navy's 
desire to interact with US forces outside the PACOM's AOR. 
 
42. (C) During the Cold War, India was highly sensitive to 
the US presence in the Indian Ocean.  Indian think tanks and 
politicians used to routinely criticize and make issue of the 
US presence on Diego Garcia.  Indian security agencies for 
decades reported fictitious US efforts to build bases or 
acquire basing rights in the region.  Although some 
suspicions of USG strategic objectives in the Indian Ocean 
persist among left wing politicians, intelligence agencies, 
and old-school defense analysts, there has been a dramatic 
change in Indian perceptions of both their role and the US 
role in Indian Ocean security for the following reasons: 
 
A. (C) Today India is more cognizant that their Indian Ocean 
security concerns can only be met in an atmosphere of 
cooperation and coordination with regional countries and 
particularly with the US.  They are looking at peaceful 
non-military areas, such as search and rescue, anti-piracy 
and smuggling interdiction, where they can lead and influence 
their regional partners.  Participating with the US in 
exercises, joint patrolling, etc., enhances India's role as a 
leader in maintaining maritime security in the Indian Ocean. 
 
B. (C) India and the US have common interests in energy 
security, and the USN plays a critical role in assuring safe 
oil supplies and freedom of navigation against various 
threats in the northern Indian Ocean. 
 
C. (C) India has a growing perception that China is 
attempting to increase its influence around the Indian Ocean. 
 Indians have complained for years about Chinese transfers of 
military technology and arms to Pakistan and Burma, but now 
they worry about China's efforts to enhance its ability to 
protect its sea lines of communication with energy sources in 
the Persian Gulf.  Indian analysts are worried specifically 
about reports that China has built a radar station for Burma 
in the great Coco islands (with a good view of the Indian 
missile test site in Orissa) and is involved in up-grading 
the port at Gwadar in western Pakistan.  China's military 
infrastructure modernization on the Tibetan plateau completes 
the encirclement in Indian eyes.  The Indian Navy is very 
conscious of the ongoing modernization and expanding 
operating area of the PLA(N). 
 
Foreign Military Sales (FMS) 
---------------------------- 
 
43. (C) Reliability and Responsiveness of the USG are two 
constant themes you will hear. The Indians remain concerned 
about the reliability (i.e., no sanctions) and responsiveness 
of the US as a defense supplier in general, although less so 
than previously.  These concerns emanate from past experience 
with sanctions and delays in responding to requests for 
information and pricing data.  Four rounds of sanctions over 
the years have left some within GOI with the impression that 
the US is not a reliable defense supplier and that we 
practice "light switch" diplomacy.  The sanctions that 
followed the 1998 nuclear tests in particular left a deeply 
negative impression because they cut off military supplies 
not just from the US, but also from third party sources that 
contained US components.  On 1 December 2004, Chief of Naval 
Staff Admiral Prakash sent a letter to Admiral Doran 
expressing concerns about the status of FMS and security 
assistance issues.  Three main issues raised concern the 
Sub-Rescue contract, P-3 Orion, and Aviation Training. 
Admiral Doran replied on 14 January 2005 with details on the 
status of each program (see below). 
 
44. (U) Aero India the largest aerospace tradeshow in South 
Asia, took place from 9-13 February 2005 at the Yelahanka 
Indian Air Force Base in Bangalore.  The centerpiece of press 
attention for Aero India 2005 was the participation of five 
US military aircraft on static display and fifteen US defense 
contractors.  The US demonstrated the largest foreign 
presence at this show.  Two themes emerged from Aero India: 
1) All MoD officials and military personnel were very pleased 
and impressed with the USG's participation in this event, and 
2) There are still serious doubts about the USG's reliability 
as a defense supplier.  Having established the seriousness of 
US commitment to competing in the Indian arms market, the 
challenge now is to come to the table in a timely fashion 
with competitively priced products for a major military 
platform. 
 
45.  (C) P3 Orion Maritime Patrol Aircraft - In response to 
their request, the Indian Navy was provided P&A data in 
September 2003 for 8 P-3B(H) Orion maritime reconnaissance 
aircraft.   These aircraft would be brought out of long-term 
storage and fully refurbished, bringing them up to P-3C Plus 
capability.  The total case value for 8 aircraft with 
associated weapons, equipment, spares and training would be 
approximately $1 Billion.  When the Indian Navy learned that 
P-3Cs might be available they expressed interest in these 
aircraft instead of the P-3Bs.  A P-3C aircraft and sensor 
package has since been cleared for release to India and a 
weapons package is under development.  The US Navy's 
International Programs Office sent a delegation to New Delhi 
from February 15-16, to discuss P&A information for P-3C with 
the Indian Navy.  Currently, the US Navy's International 
Programs Office is exploring Indian Navy requests for the 
"hot" transfer of one or two P-3Cs to the Indian Navy and is 
exploring the possibility of lowering the total costs of this 
proposed sale. 
 
46.  (C) SH-60 Sea Hawk helicopters - In September 2003 the 
Indian Navy requested pricing data for the purchase of 16 Sea 
Hawk helicopters to replace their aging Sea Kings.  This P&A 
data is expected in early 2005. ODC has learned that GOI will 
probably release a global Request for Proposal (RFP) to meet 
this requirement.  If that happens the Sea Hawk will face 
stiff competition from French and Russian aircraft, which are 
likely to be aggressively priced. 
 
47.  (C) E-2C Hawkeye aircraft - In July 2003 Northrop 
Grumman provided the Indian Navy with an open source brief on 
the E-2C Hawkeye, which led to a request for P&A data for 6 
aircraft.  This P&A data has just arrived, with a total case 
value of approximately $1.3 Billion for 6 aircraft and 
associated equipment.  The Indian Navy's interest in the 
Hawkeye waned however, when they learned that it would not be 
able to operate from their newly acquired aircraft carrier 
Admiral Gorshkov.  As a result, the Hawkeye sale is on hold 
for the foreseeable future. 
 
48.  (C) Deep Sea Rescue Vehicle (DSRV) - The DSRV case was 
initially opened in 1997 but was suspended in 1998 due to 
sanctions.  The case was restarted after September 2001.  In 
March 2004, the Indian Navy approved an amendment to the DSRV 
case and made an initial deposit of $158,425.  The total 
value of the DSRV amendment is $734,443.  ODC is currently 
working gith the Indian Navy to update the DSRV case to allow 
for modifications to their model 209 submarines so they are 
compatible with the DSRV.  The Indian Navy has indicated 
their desire to conduct a demonstration of this rescue 
capability. 
 
49.  (C) Excess Defense Articles.  On 15 February the Indian 
Navy was briefed by Navy IPO that the US will be retiring MHC 
and LPD class ships in FY 2006 and 2007.  The Indian Navy has 
indicated an interest in these vessels and specifically asked 
that this information be kept confidential (possibly to avoid 
interference from Indian shipyards). 
 
US-India Joint Exercises Continue to Expand 
--------------------------------------------- ------ 
 
50. (C) Since sanctions were waived in September 2001, we 
have conducted a series of nearly 20 bilateral exercises of 
increasing scope and sophistication with all three services. 
The fifth and largest 'Malabar' exercise was conducted from 
October 1-10 off the south Indian Coast and featured ASW, 
AAW, SUW, and VBSS exercises.  For the first time we utilized 
the IN-USN Standard Operating Procedures (SOPs) which were 
perceived to significantly ease the planning process and set 
the stage for even more sophisticated exercises.  These SOPs 
will be reviewed, enhanced and expanded during the Malabar 05 
planning conferences.  The exercise also featured the first 
sub vs sub event, the first port visit of a US nuclear 
powered warship to India, and the first use of the Navy to 
Navy fuel transfer agreement (which we hope will ultimately 
open the door for an ACSA).  We have proposed that Malabar 05 
include the Indian aircraft carrier Viraat, and Malabar 06 
include a US carrier.  Despite numerous requests, the Indian 
Navy has not included a KILO class submarine in any of our 
exercises. 
 
51.  (C) Exercise Flash Iroquois with USN SEALS and Indian 
Maritime Commandos (MARCOS) was conducted in October 2004 in 
a training area south of Mumbai. The focus was on ship 
intervention.  Also Indian MARCOS participated in the EOD 
exercise, Spitting Cobra with EODMU Five in January 2005. 
Finally, US warships are stopping routinely in Chennai, 
Cochin and Mumbai for refueling, crew rest and recreation. 
 
52. (C) Future exercises in 2005 will include only the 
Malabar 05. A Flash Iroquois Special operations exercise 
involving SEALs was not scheduled due to operational 
commitments of the SEALs.  The planned Search and Rescue 
exercise (SAREX) has been postponed to CY 2006 due to funding 
issues (PACFLT) and a desire to conduct a more sophisticated 
exercise by the Indian Navy.  The Indian Navy would like this 
exercise to include a submarine rescue phase and to actually 
test the DSRV capability purchased through FMS. 
 
53.  (C) USARPAC and SOCPAC have conducted a number of high 
altitude warfare, CT, and jungle warfare exercises at the 
platoon level.  PACAF has conducted several air exercises to 
include Para-drop.  PACAF's COPE India DACT will be in 
November in India and feature F-16s, AWACs, and tankers. Air 
forces agreed on a road map for IAF to participate in REDFLAG 
exercise in 2006-07. The USMC and the Indian Army have 
company level exercises this summer at Camp Pendelton and 29 
Palms.  USARPAC has a plan to raise the level of engagement 
up to battalion and brigade by 2007. 
 
Port Visits 
------------------ 
54. (C) Port visits to India continue at about one per 
quarter.  Last visit was USS Blue Ridge in Goa, 15-18 
February 2005.  During the July 2004 visit of USS Cushing to 
Mumbai, the local Foreigners Regional Registration Office 
(INS equivalent) demanded a "crew list" from the ship and, in 
accordance with policy, the CO refused.  The FRRO then 
refused to process visa applications for two sailors 
departing on emergency leave.  The Charge appealed to the 
Ministry for External Affairs and was able to obtain the 
visas.  Diplomatic approval for subsequent visits has been 
contingent on the ship providing a "Shore Party List" of 
names only, of those departing the ship and entering India. 
Four ships have visited India under this regime without 
incident.  The Indian Navy views this issue as outside their 
purview. 
 
Non-Combatant Operations (NEO) Planning 
----------------------------------------- 
 
55. (S/NF) In time of war or natural disaster as many as 3000 
official AMCITs and 50,000 passport holders might become 
affected. PACOM's and III MEF's NEO Planning for India has 
evolved rapidly since the near war situation in 2002 
resulting in a highly developed on-the-shelf plan. The 
embassy's NEO planning in coordination with the other four 
allies has also progressed to a high level. What's left to do 
is approach the GOI to ask for guarantees for access to bring 
military equipment and personnel into India during a time of 
crisis.  The tsunami tragedy has presented an opportunity to 
engage the GOI on issues linked to our NEO planning.  We plan 
to exploit this window to start a dialogue that will lead to 
engagement on direct questions that support our NEO planning 
 
ACSA 
---- 
 
56. (C) One key administrative goal we need to complete to 
further advance our defense cooperation programs is 
completing the ACSA which PACOM has been trying to get signed 
for close to three years.  Embassy has reinvigorated it with 
Mr Mukherjee several times. USD(P) Feith mentioned it in June 
during the Defense Policy Group.  Mr Feith also mentioned it 
with Foreign Secretary Saran in September. Recommend you 
stress with Mukherjee and other officials the importance of 
getting this signed. 
 
POW-MIA Issues 
---------------------------- 
 
57. (C) OSD's POW-MIA coordinator has visited India and laid 
the ground work for future investigations into possible 
recovery of remains of downed US fliers who flew "the Hump" 
from India across Burma, into China during WWII. Presently 
three possible recovery sites have been provided to GOI in 
Indian's North-East. According to US war records, up to 406 
personnel may have perished on Indian soil. 
 
Conclusion 
---------- 
 
58. (C) Once again, we appreciate the opportunity your visit 
presents and look forward to your arrival. 
MULFORD