US embassy cable - 05NEWDELHI3653

C O N F I D E N T I A L SECTION 01 OF 03 NEW DELHI 003653 
 
SIPDIS 
 
FOR P, C, ACTING E WAYNE AND D/NSA CROUCH 
 
E.O. 12958: DECL: 05/13/2015 
TAGS: PREL, KNNP, KDEM, ETTC, MASS, NP, CH, IZ, IN, Indo-US 
SUBJECT: FS SARAN PREPARES FOR WASHINGTON 
 
REF: NEW DELHI 03646 
 
Classified By: Charge Robert O. Blake, Jr., for Reasons 1.4 (B, D) 
 
1.  (C) Summary. In a May 14 meeting with the Charge, Foreign 
Secretary Shyam Saran gave an optimistic overview of the 
 
SIPDIS 
issues for his upcoming trip to Washington, emphasizing the 
GOI's intention to develop a rich menu of deliverables to 
make the Prime Minister's July White House visit "a defining 
moment in our relationship".  One day after the passage of 
GOI export control legislation (which Saran called "my most 
difficult exercise in 35 years") the Foreign Secretary 
underlined the Indian resolve to complete the remaining NSSP 
requirements before the PM's visit.  The GOI has committed 
USD 5 million to the UN Democracy Fund, but is waiting for 
the account to become operational and believes the ball is in 
the UN's court.  On the PM's recent meeting with Putin in 
Moscow, Saran was encouraged by the Russian President's 
willingness to reconsider nuclear fuel and additional 
reactors for India.  Briefing the Charge at length on Nepal, 
Saran expressed concern about Maoist threats and RNA abuses 
leading to increased Nepali migration into India, as well as 
the reported Chinese intention to provide ammunition to the 
RNA, which India will protest.  He argued that the RNA 
currently has "sufficient" supplies of ammunition.  End 
Summary. 
 
Export Control Legislation and the Steps Ahead 
 
 
2.  (C) The Charge congratulated Saran on the GOI's quick 
passage of the "WMD and their Delivery Systems Bill", which 
Saran called his "most difficult exercise in 35 years" of 
government service.  Saran was sensitive to a question about 
when the GOI would promulgate revised control lists, and 
stressed that the US needs to have patience. He added that 
any public perception of pressure coming from the US would be 
the "kiss of death", and noted that this process must be 
managed and packaged carefully in order for India's coalition 
government and a "skeptical Parliament" to be comfortable 
with these rapid changes.  Saran did however affirm that the 
roadmap is clear and that the GOI is committed to fulfilling 
all NSSP requirements (including control lists) before the 
PM's visit to Washington. He later added that work is well 
under way on the control lists, noting that there is 
consensus within the GOI "on the need to get NSSP out of the 
way".  Compared to the export control law, Saran said, the 
remaining NSSP requirements are relatively modest tasks that 
can be accomplished through executive decree. 
 
Working Group Preparation 
 
 
3.  (C) With Manmohan Singh focused on his upcoming trip, 
Saran is committed to using his time in Washington to make 
the PM's visit a "defining moment" in US-India relations, 
adding that "I hope we will be able to come up with a 
meaningful package".  The Charge suggested that Saran lay the 
groundwork for all the key working groups to hold their first 
meetings before the PM's visit.  In response to the GOI 
suggestion for a Space Working Group meeting on May 23 and 
24th, the Charge explained that US technical agencies can 
meet on these dates only by DVC.  (Mission will follow-up on 
May 16 to seek GOI concurrence.)  Saran agreed broadly with 
our concept of five tracks for the Energy Dialogue and hoped 
that Montek Singh Alhuwalia's visit to the US in late May 
would provide a mandate to the working groups to generate 
some deliverables before the July PM visit.  With the goal of 
holding the CEO Forum during or just before the PM's visit, 
the Indians have refined their composition and requested 
initiative from the White House to energize the forum and 
recruit top CEOs.  The Charge assured him that the US has a 
strong candidate list that the Ambassador will review soon to 
make recommendations to Washington.  The Charge also noted 
acting Undersecretary Tony Wayne's interest in meeting the 
Foreign Secretary on economic issues.  Saran was open to this 
possibility and instructed his staff to look into scheduling 
possibilities. 
 
UN Democracy Fund and Iraq Reconstruction: Waiting to 
Contribute 
 
 
4.  (C) The Charge highlighted the symbolic importance of 
India's inaugural contribution to the UN Democracy Fund. 
Saran explained that the GOI had pledged USD 5 million last 
November which could be used for the Iraq election and 
training electoral officers, but understood the fund was not 
yet operational.  The GOI is currently awaiting instructions 
from the UN on how to donate the money.  Saran suggested that 
PM Singh make a statement about the contribution during his 
White House visit, highlighting India's commitment to 
democratic principles. He agreed with PolCouns that the 
Foreign Secretary's late May visit to New York provided an 
opportunity to catalyze the process of making this fund 
operational and underlined India's support for the 
Administration's emphasis on global democracy.  The Charge 
expressed his satisfaction with the PM's renewed offer of 
assistance to Iraq and suggested that India's many eminent 
jurists could provide constitutional expertise.  Saran 
responded that the GOI is waiting for a request from the 
Iraqi government, which may come when GOI Special Envoy for 
West Asia and the Middle East Peace Process Chinmaya 
Gharekhan visits Iraq May 22-25.  Gharekhan may also offer 
Iraqi diplomatic and civil service training in India. 
Embassy will seek an appointment with Gharekhan prior to his 
departure. 
 
Russian Nuclear Cooperation Looks Encouraging 
 
 
5.  (C) Charge sought a readout on PM Singh's talks with 
President Putin on nuclear issues.  Saran replied that 
although Russia has not yet changed its view regarding NSG 
constraints on the Indian requests for nuclear fuel and 
additional nuclear reactors for the Koodankulam facility, 
Putin promised to give the issue his "individual attention." 
The Indians expect the Russians to work with the NSG to see 
if it is possible to achieve some flexibility in the current 
restrictions on civil nuclear transfers to India.  Saran 
stressed the GOI's long term plan to use nuclear power to 
meet 25% of India's energy demands.  He was "pleasantly 
surprised" about the "encouraging response" the GOI heard at 
last November's EU Summit at the Hague and said a less 
restrictive international environment would help India meet 
its energy needs. He also took encouragement from President 
Bush's public emphasis on the revival of nuclear energy 
options. 
 
Nepal: Working Closely Amid Increased Concerns 
 
 
6.  (C) Saran briefed the Charge at length about GOI concerns 
regarding increased Nepali migration into India as a result 
of RNA human rights abuses and Maoist threats. According to 
Saran, the exodus from Nepal to the Indian states of 
Uttaranchal and Uttar Pradesh is growing as migrant laborers 
who used to commute back and forth across the border are 
joining their families in India. As more and more Nepalis 
settle in India, Saran worried that "India's safety valve 
will not be enough".  The migration is having a major impact 
on both countries and leaving the mid-west hill area of Nepal 
a land of "deserted villages". Increases in unemployment, the 
closure of industries, and decreases in tourism will cause 
the Nepali economy to come to a halt, further destabilizing 
the political situation. He welcomed the unity of the 
political parties and their platform as a "good basis for 
beginning talks", adding that there is "no reason for the 
King not to invite the parties into talks". Saran speculated 
that without engagement from the King, at some point the 
"temptation (for the political parties) to join the Maoists 
will be irresistible". 
 
7.  (C) Saran also flagged concern about GOI reports that the 
Chinese company Norinco has agreed to supply the RNA with 
ammunition.  If true, this development contradicts the 
assurances offered by the Chinese Foreign Minister that the 
PRC will not provide arms to Nepal.  If China supplies the 
RNA, this will "complicate" the political situation.  He 
raised the GOI's intention to protest the Chinese offer and 
indicated New Delhi would also raise this issue with the GON. 
 Recalling the GOI decision to release non-lethal supplies 
(reftel), Saran said the only equipment to be provided for 
now were vehicles held on the border on February 1, night 
vision devices stored at he Indian Embassy in Kathmandu, and 
non-lethal material like body armor and barbed wire.  He 
agreed with the Charge on the need to share assessments of 
RNA ammunition supply shortages, but commented that current 
RNA supplies are "sufficient".  The Charge thanked Saran for 
his assessments and promised to continue working closely with 
the GOI to pressure the King and the parties back toward 
democracy. 
BLAKE