US embassy cable - 05NEWDELHI5047

C O N F I D E N T I A L SECTION 01 OF 05 NEW DELHI 005047 
 
SIPDIS 
 
E.O. 12958: DECL: 06/26/2015 
TAGS: PREL, KNNP, ETTC, EAGR, IN, NSSP 
SUBJECT: U/S BURNS DISCUSSES PM'S VISIT WITH FS SARAN 
 
REF: NEW DELHI 4633 
 
Classified By: Charge Bob Blake for Reasons 1.4 (B, D) 
 
1.  (C) Summary: In a three and a half-hour session with 
Foreign Secretary Shyam Saran on June 24, U/S Burns reviewed 
deliverables for PM Manmohan Singh's July 18 visit to 
Washington, discussing in detail those of greatest interest 
to New Delhi (Civil Nuclear cooperation and UNSC reform) and 
reviewing progress on a number of others (education, 
agriculture, democracy, HIV/AIDS, and S&T).  They also 
discussed Dabhol, Boeing, Iraq, PSI, space cooperation, and 
mil-mil ties.  On UNSC reform, the Under Secretary stressed 
that the Council must be adjusted to 2005 realities and 
include developing countries and states from outside Europe, 
explained the "two or so" position on permanent members, and 
urged India to delay a vote on the G-4 proposal.  Saran 
welcomed US support for an increase in permanent and 
non-permanent members, as well as developing countries before 
launching into an impassioned appeal for Indian membership in 
an enlarged UNSC: "Let me be brutal and honest," the recently 
elucidated membership criteria is similar to a longstanding 
Indian proposal, which "create huge expectations."  U/S Burns 
told Saran that Washington understands Indian sentiments, but 
that effectiveness of the Council and broader UN reform is 
paramount.  End Summary. 
 
2.  (C) Observing that the US and India are at an important 
juncture in their relations, Saran said the PM was very 
excited about his visit.  The US and India are poised at an 
historic transformation, which President Bush's planned trip 
to India confirmed.  The Under Secretary responded that 
Secretary Rice is convinced that the US and India are in an 
 
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historic phase in their ties, and wants to ensure that 
relations "fire on all cylinders."  He expected the PM's 
visit to be perhaps the most important one ever for the two 
countries, adding that the PM would receive a first rate 
reception as befits India's emerging global role. 
 
Recent Achievements 
------------------- 
 
3.  (C) Saran then reviewed the achievements of the last 
year.  Secretary Rice's March visit was a "defining moment" 
in the bilateral relationship.  Phase I of NSSP was completed 
in September, when the PM and President Bush also met.  India 
was the first country to support the UN Democracy Fund, and 
announced a significant contribution as well.  Defence ties 
were intensifying, with a vigorous schedule of joint 
exercises and the excellent Tsunami cooperation between the 
militaries.  Co-production of fighter aircraft was being 
discussed, which had never been on our agenda in the past. 
Defense Minister Mukherjee's late June visit to the US would 
be a success.  On economics, the Parliament passed the Patent 
Act, abolished Press Note 18 limiting foreign investment, and 
signed the Open Skies Agreement.  The Energy Dialogue was 
launched, the Economic Dialogue revived, and the CEO Forum is 
in train.  The recent Boeing order was the only issue on 
which President Bush has called the PM, "and that went 
through." 
 
4.  (C) Acknowledging that there had been skepticism in the 
USG about the course of US-India relations after the UPA 
government took power in May 2004, the Foreign Secretary said 
the record belied these apprehensions.  Saran said he had 
stressed to senior USG officials during two recent visits to 
Washington that the GOI would fulfill its commitments under 
the NSSP, and that the GOI was "in the process of adhering to 
the NSG and MTCR." 
 
Deliverables for PM Visit 
------------------------- 
 
5.  (C) The Foreign Secretary and the Under Secretary went 
through a number of deliverables for the PM's visit: 
 
-- Democracy Initiative: GOI hopes to come up with a package 
to announce together with the USG.  U/S Burns thanked the GOI 
for its pledge to contribute to the UN Fund and urged 
agreement on a bilateral project such as democracy promotion, 
which was central to the Administration's second term, as 
exemplified by the Secretary's recent Cairo speech, the most 
important of her first six months in office.  Saran responded 
that the GOI initiative (reftel) reflected PM support.  India 
was glad to join hands with the US in a multilateral 
framework, because the GOI wants to avoid the perception that 
any joint undertaking is "imposed by another country."  India 
is serious about working with the U.S. on democracy issues, 
and this has the PM's support.  The Under Secretary conveyed 
a USG democracy proposal, which the FS undertook to study. 
 
-- HIV/AIDS: Saran reviewed briefly the GOI India-US Global 
HIV/AIDS Initiative.  U/S Burns passed a paper proposing 
cooperation with considerable private sector participation, 
including a Capital Fund.  Saran noted that the PM is 
personally interested in more US-India cooperation on 
HIV/AIDS. 
 
-- Education: Urging a "restoration of the spirit of the 
1950s," Saran outlined an "India-US Educational Cooperation 
and Exchange Initiative."  Recalling that the IIT Kanpur was 
a child of US-India cooperation, and the Green Revolution 
owed much to American support, he urged a revival of the 
"Kanpur spirit," but adding new areas such as Indian Studies 
into the mix.  After the DCM reminded of GOI restrictions on 
fundraising efforts by the U.S. Educational Foundation in 
India, MEA Joint Secretary (Americas) S. Jaishankar said this 
issue was "very close to resolution." 
 
-- Agriculture: PDAS Camp briefed on ideas to beef up or 
restore linkages between the two sectors, and apprised Saran 
of a proposed June 30 DVC along these lines.  The Foreign 
Secretary said India was working in the same direction and 
 
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predicted that it would not be difficult to work something 
out.  He outlined the GOI "India-US Knowledge Initiative on 
Agricultural Research," which would strengthen cooperation 
with Indian institutions that are themselves a product of 
relations with the United States.  He stressed that there was 
a strong private sector dimension to the Indian initiative. 
Ambassador Mulford expressed enthusiasm for a strong 
agriculture deliverable. 
 
-- Tsunami Disaster Relief: Recalling excellent US-India 
cooperation in the Core Group, the Under Secretary proposed 
greater cooperation in capacity building to combat natural 
disasters in Asia, such as by conducting joint military 
exercises focused on this issue, and passed a paper fleshing 
out this idea.  PDAS Camp added that while disaster 
management is largely a civilian function, PACOM is the nodal 
point for activities in much of Asia, which increases the 
importance of bringing the militaries together.  Saran 
responded that disaster management is a civilian function in 
India, and that the Indian Navy would never have begun to 
operate during the Tsunami without clearance, but that the 
GOI would consider the proposal.  It might be useful to 
fine-tune arrangements.  U/S Burns observed that the US 
military also operates under a civilian umbrella, mentioned 
the greater effort the Department is putting on coordinating 
reconstruction efforts after international tragedies, and 
suggested that Ambassador Carlos Pascual (S/CRS) visit India 
or that Indian visitors in Washington seek him out.  This a 
natural area for US-India cooperation, the U/S concluded. 
 
-- Science and Technology: Saran reviewed a proposal to 
cooperate on nano-technology which the MEA had recently 
conveyed to the Embassy (see septel).  Stressing that this is 
a frontier area, he urged the conclusion of "something 
pioneering" at the summit.  The U/S responded that he 
expected relevant agencies to look into the idea carefully. 
The DCM observed that during Minister Kapil Sibal's recent 
visit to Washington, it was clear that India is very 
interested in concluding a bilateral S&T Agreement.  The U.S. 
is waiting for India's counter draft.  DCM noted that any 
changes to the IPR annex of the Agreement would complicate 
prospects to conclude one before July 18.  The Foreign 
Secretary undertook to check on the status of the Agreement 
 
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with the S&T Secretary. 
 
-- Industrial Research and Development: Saran outlined a 
proposal (see septel) modeled on the US-Israel "Bird" 
Program, which would complement the existing High Tech 
Cooperation Group (HTCG).  The U/S pledged that the USG would 
consider the matter. 
 
Other Issues 
------------ 
 
-- (C) Dabhol: Ambassador Mulford highlighted the positive 
impact an end to the Dabhol dispute would have on US 
investors, and urged that a target date of early July be set 
for the completion of negotiations.  Observing that all the 
US parties have resolved their issues with the GOI except one 
(Bechtel), he drew on a telephone call the previous evening 
with a member of the firm's senior management to explain why 
the Bechtel perspective about outstanding matters (tax and 
third party liability) differ so from those of the other 
parties.  The Ambassador urged the GOI to appreciate the 
firm's unique situation, commenting that a resolution could 
open the door to more international involvement in 
infrastructure development, a sector of great needs in India. 
 Addressing Bechtel's concerns would be extremely important 
signal for other CEOs with concerns about how investors are 
treated in India. 
 
-- (C) Boeing aircraft sale: The Under Secretary said he had 
spoken with Boeing the previous evening, which had expressed 
interest in final Cabinet approval for the recent sale to Air 
India.  Saran undertook to check whether this would be 
possible before July 18. 
 
-- (C) PSI: U/S Burns conveyed that the Core Group would soon 
be phased out, and urged India to take the preparatory steps 
to endorse the Statement of Principles.  Saran replied that 
if it is phased out, the GOI would have to look at the 
details and run the issue through the Indian system. 
Commenting that as a matter of principle, there was no 
ambiguity in New Delhi's position and that India is 
interested, he reiterated the standard GOI caveats -- that 
participation does not violate international or maritime law, 
and that India would have to know more about the operational 
details.  He expressed interest in obtaining these details to 
determine whether India could participate.  U/S Burns 
emphasized that the step does not represent a diminution of 
USG interest in PSI, that it is one of the Administration's 
major CT initiatives, and said the USG would be pleased to 
provide a briefing on operational details early in the week 
of June 27. 
 
-- (C) Iraq: The Under Secretary expressed appreciation for 
the intervention by Foreign Minister Natwar Singh at the 
US-EU Iraq conference in Brussels earlier in the week, 
commenting that the only country that had been unhappy with 
the meeting was Damascus.  U/S Burns reviewed problems 
arising out of Syria's negative role with regard to foreign 
fighters. 
 
-- (C) Military: The Under Secretary expressed satisfaction 
that Defense Minister Mukherjee was on his way to Washington, 
stressing how important such mil-mil contacts are for the 
bilateral relationship.  On the P-3, Saran said Admiral 
Fallon had recently called the Navy Chief to report that no 
P-3s were immediately available, but that he was looking for 
one.  On the F-16-/F-18 issue, Saran said he was certain 
Mukherjee would ask about co-production under license and 
tech transfer during his visit.  U/S Burns agreed that 
co-production is key, and that the USG is still in the early 
stages of this issue.  Nevertheless, the US-India 
relationship stands on its own merits, and is not related to 
other countries. 
-- (C) Space: U/S Burns expressed interest in fielding an 
instrument on the Chandrayan lunar mission, but that a TAA 
(Technolgy Assistance Agreement) would need to be completed 
first.  On negotiating a Space Launch Agreement, the U/S 
noted that USTR is preparing a draft agreement.  Saran took 
note of this. 
 
-- (C) Project Tiger: The Foreign Secretary conceded that the 
MEA had not been focused on the US proposal to work with the 
GOI to save the Bengal Tiger, and undertook to speak about it 
with the Ministry of Environment and Forests. 
 
UNSC 
---- 
 
6.  (C) The Under Secretary explained the USG position on 
UNSC reform, stressing that the Council must be adjusted to 
2005 world realities and include developing countries and 
states from outside Europe.  On the high degree of skepticism 
in the Congress to the UN, he said the Secretary opposes the 
Hyde Act and will invest political capital in fighting it, 
but observed that the proposed legislation reflects the very, 
very negative attitude towards the UN in Washington as 
scandals continue to unfold.  This could affect the prospects 
for ratification by the Senate of a UNSC expansion.  In order 
for India to achieve UNSC permanent member status, the Senate 
will be interested in India's voting patterns at the UN, 
where New Delhi voted only 24% of the time in favor of those 
matters of greatest interest to the USG, he stated. 
 
7.  (C) The more modest US proposal of "two or so" more 
permanent members reflects a concern about the effectiveness 
of an expanded UNSC, the U/S continued.  He lamented that 98% 
of the discussion about UNSC reform is about expansion, and 
not the other critical issues (human rights, management, 
etc.) facing the organization.  It was important to talk 
about UNSC reform, but also that it not outpace discussion of 
these other critical issues.  The debate thus far has been 
superficial, and needs to become more substantive.  The Under 
Secretary urged India to use its influence to postpone the 
 
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vote on the G-4 Framework Resolution proposed for mid-July. 
The USG would prefer to see a more iterative process, and 
predicted that a vote on the G-4 proposal would be divisive. 
 
8.  (C) The Foreign Secretary responded that India welcomes 
the two aspects of the US proposals: that there should be an 
expansion of permanent and non-permanent members, and that 
developing countries should have greater representation. 
Saran asserted that there would be more divisiveness if 
reforms were to be more limited.  The lack of representation 
or under-representation of regions also "must be set right." 
The G-4 proposal is the only one on the table that looks at 
an increase in permanent and non-permanent members, and 
representation from the developing world.  "We have adjusted 
where we can, and are confident that our proposal can carry 
along a larger number of countries than a more limited 
expansion."  "I hasten to assure you that we're not 
unifocally looking at the UNSC, to the exclusion of 
everything else."  The GOI agrees that UN reform is about 
more than enlarging the UNSC, and has been working on 
management and other issues, he stated. 
 
9.  (C) Saran said India is also conscious that UN reform is 
a "long haul," that there are many complex issues to face and 
hurdles to cross.  "We are not impractical about this," he 
went on, but the issue has momentum for the first time in 
many years, and the GOI wants to ensure that in the shake-up, 
developing countries get a better deal, as India has a lot of 
influence there.  "Our aspirations may not be the same as 
yours," he continued.  Much depends on how the Africans 
regard this.  "It is like a kaleidescope, changing every 
day."  India's bottom line is that it is important to keep 
G-4 solidarity intact. 
 
10.  (C) Saran recalled that India had spelled out criteria 
for UNSC expansion in 1994 that did not differ that much from 
those the USG recently set forth, which included size, 
democratic form of government, role in international 
peacekeeping operations, and non-proliferation record.  On 
this basis, he stressed, "we pass the test," and "India 
belongs in the UNSC."  He urged the US "not to look for 
support from India on each and every issue," noting that 
there were many areas (consensus resolutions) where the two 
countries are very close.  On human rights, India does not 
like the "report card approach."  "It would be an enormous 
gesture for the US to say that it welcomes India, but if you 
cannot do this, please tell us and we will accept it."  "We 
fully recognize that this is a long haul, and that it may not 
happen for a number of years, but a gesture would transform 
the relationship and would make a tremendous difference." 
"Let me be brutal and honest," he continued, the UNSC 
membership criteria recently elucidated by the USG is very 
similar to those India spelled out in 1994, which "creates 
huge expectations in India." 
 
11.  (C) The Under Secretary replied that the USG is keeping 
its options under review and supports Japan.  There is a 
danger of a collision of interests if the process is not 
slowed down.  Beijing wants no reform.  For the P-5, 
effectiveness is the issue.  Washington understands Indian 
sentiments, but the President will make the decision, he 
concluded.  Saran responded that "when you say these things, 
no one will look at the fine print."  He realized this was a 
decision for President Bush to make.  Unlike China, India has 
been extremely careful in its reactions.  U/S Burns cautioned 
that he did not know whether the decision would be made by 
the time the PM visits Washington on July 18. 
 
12.  (U) Participants: 
 
U.S. 
---- 
 
U/S Burns 
Ambassador Mulford 
DCM Bob Blake 
PDAS Don Camp 
NSC Director Xenia Dormandy 
P Special Assistant Caitlin Hayden 
Acting Pol M/C Matt Boyse 
 
India 
----- 
 
Foreign Secretary Saran 
Joint Secretary S. Jaishankar 
Director Renu Pall 
Deputy Secretary Santosh Jha 
Under Secretary Raj Srivastava 
BLAKE