US embassy cable - 05NEWDELHI5318

C O N F I D E N T I A L SECTION 01 OF 03 NEW DELHI 005318 
 
SIPDIS 
 
E.O. 12958: DECL: 07/11/2015 
TAGS: PREL, PTER, KCRM, KWMN, ETRD, ENRG, BD, IN, India-Bangladesh 
SUBJECT: INDIA REVIVES TOP-LEVEL ENGAGEMENT WITH BANGLADESH 
BUT SUSPICIONS LINGER 
 
REF: A. NEW DELHI 4330 
     B. DHAKA BG IIR 6 925 0054 
     C. NEW DELHI 5048 
 
Classified By: PolCouns Geoff Pyatt, for Reasons 1.4 (B, D) 
 
1.  (C) Summary: Meetings between the Foreign Secretaries of 
India and Bangladesh in New Delhi on June 21-22 provided the 
first opportunity after a two year gap for the nations' top 
diplomats to turn around deteriorating relations by airing 
disagreements, reviving several working groups, and planning 
for additional exchanges before the SAARC summit in November. 
 Delhi-based analysts observed a sincere interest on both 
sides to improve relations and believe the GOI has realized 
the importance of greater engagement with Bangladesh as the 
first step towards mending the soured fences.  The Foreign 
Secretaries'  meeting is an important high-level effort, but 
 
SIPDIS 
real progress will require a perception in Delhi that Dhaka 
is addressing India's security concerns as well as a GOI 
commitment to hear Bangladeshi grievances and intensify 
economic cooperation.  End Summary. 
 
A Show of Top-level Bonhomie 
---------------------------- 
 
2.  (U) Despite the recent border tension and security 
concerns about insurgents in Bangladesh, Indian media 
reported that FS Saran's meetings with FS Heymayetuddin, who 
previously served as Dhaka's envoy to Delhi, were held in a 
"cordial atmosphere" in which both sides evinced a genuine 
interest in mending ties.  The meetings followed sharp 
criticism of GOI policy toward Bangladesh (Ref A) and calls 
from strategic analysts for top-level intervention to address 
piled-up issues and repair the neighborly rift.  Setting a 
positive tone for PM Singh's visit to Dhaka for the SAARC 
conference in November, FS Saran personally received his 
counterpart at the airport and thanked him for the June 16 
operation against anti-India military camps in Moulovibazar 
(Ref B). 
 
3.  (U) After seven hours of meetings, the Joint Press 
Statement listed the following results: 
 
-- Agreement to convene the bilateral Joint Working Group on 
Trade by August 2005, sign the revised Trade Agreement and 
the Bilateral Investment Protection and Promotion Agreement 
(BIPPA), and send the Indian Minister for Commerce and 
Industry to Dhaka. 
 
-- Resumption of meetings of the Joint Boundary Working 
Groups (JBWG) in August 2005 to consider boundary-related 
issues such as boundary demarcation and exchange of enclaves 
and territories. 
 
-- Satisfaction at the commencement of coordinated patrolling 
by border forces of both countries and Bangladesh agreement 
to examine the Indian proposal for coordinated patrolling of 
the feasible sections of the riverine boundary. 
 
-- Need to convene the Joint Rivers Commission in Dhaka and 
Indian pledge not to take any unilateral action on the Indian 
River Linking Project which would harm Dhaka's interests. 
 
-- Indian invitation to Bangladeshi delegation to visit in 
July 2005 to discuss extension of USD 150 million line of 
credit for infrastructure projects. 
 
-- Explore bus services between Dhaka and Guwahati, Dhaka and 
Shillong and Dhaka and Siliguri. 
 
Diplomats Agree to Disagree 
--------------------------- 
 
4.  (C) The Foreign Secretaries aired their views on other 
contentious issues, but agreed to nothing beyond future 
meetings.  The Joint Statement reflects differences over the 
two toughest disagreements, namely border fencing issues and 
anti-India insurgents.  Bangladesh insisted that India's 
plans to build border fences within 150 yards of the frontier 
do not conform with the 1975 border guidelines.  The GOI 
requested a high-level meeting on illegal cross-border 
activity and migration, which Dhaka continues to deny 
publicly.  Delhi stressed the need for greater information 
sharing and action against Indian insurgents in Bangladesh, 
but FS Hemayetuddin did not agree to the Indian request to 
share intelligence on Northeast insurgents.  Mashfee Binte 
Shams, Counselor at the Bangladesh High Commission expressed 
satisfaction over the meetings, stressing that the "negatives 
shouldn't outweigh the progress made in the discussions," but 
noted that Bangladesh is looking for greater economic 
concessions from India.  FS Saran emphasized to U/S Burns the 
progress on boundary and trade issues and the agreement to 
revive several joint working groups (Ref C). 
 
For India, Security Counts 
-------------------------- 
 
5.  (C) The Foreign Secretaries agreed to increase 
coordinated patrolling as one method to decrease tension and 
corruption between Border Security Forces (BSF) and 
Bangladesh Rifles (BDR).  According to Shams, coordinated 
patrolling along the land border has already begun, and 
Hemayetuddin agreed to examine a new Indian proposal for 
expansion to the riverine boundary.  Institute of Defense 
Studies and Analyses Associate Fellow Sreeradha Datta told 
Poloff that this simultaneous patrolling is little more than 
increasing coordination between the guards regarding where 
they are at what time of day.  She noted that corruption is 
so endemic on both sides of the border that greater 
coordination between guards will do little to cut down on the 
win-win economics of facilitating petty smuggling and illegal 
migrant crossings. 
 
6.  (C) The BDG operation against anti-Indian insurgents one 
week before the meeting contributed to the improved 
atmosphere, but did little to ease the ongoing security 
concerns.  Calling the June 16 operation "cosmetic," IDSA's 
Datta told Poloff that this was a intentionally-timed 
maneuver before the meetings and not a symbol of commitment 
to rooting out insurgents.  To further beef up security, the 
"Hindustan Times" reported on the last day of meetings that 
the India Home Ministry will replace approximately 10 
battalions of BSF serving in the Kashmir Valley with the 
Central Reserve Police Force (CRPF) in order to increase the 
number of guards available for the Indo-Bangla border. 
 
Improving Relations Through Economic Concessions 
--------------------------------------------- --- 
 
7.  (C) New Delhi's "carrots" in its Bangladesh relationship 
are primarily economic and stem from Dhaka's one billion USD 
trade deficit with India.  In the revised Trade Agreement, 
which has been pending since 1999, New Delhi has offered to 
extend some economic concessions to Dhaka in the form of duty 
free entry for additional goods.  The details of this 
agreement, yet to be signed, are not public.  The Bilateral 
Investment Protection and Promotion Agreement (BIPPA) has 
been under negotiations since 1982, and would guarantee that 
Indian investments in Bangladesh can't be expropriated, with 
the hope that other Indian companies to follow Tata's recent 
investment example.  Shams indicated that Dhaka would look 
more favorably on gas pipeline discussions if Delhi gave 
transit rights for Bangladeshi goods going to Nepal and 
Bhutan, facilitated the delivery of electricity from Nepal 
and Bhutan, and made efforts to reduce the trade gap. 
8.  (C) Delhi-based analysts viewed this economic leverage as 
an opportunity for the GOI to make simple gestures to improve 
quickly the atmosphere and take some pressure off Bangladesh. 
 Professor S.K. Pandey from Jawaharlal Nehru University told 
Poloff that as the "big brother neighbor," it was the GOI's 
responsibility to grant economic concessions as the next step 
towards improving relations.  Strategic analyst C. Raja Mohan 
called on Prime Minister Singh to de-link economic and 
security dimensions of its policy towards Dhaka in the same 
way that the GOI de-linked cross-border terrorism and 
normalization of ties with Pakistan.  By refusing to 
negotiate on the economic aspects until Dhaka acts on 
terrorism and migration, Mohan observed that India has 
blocked progress on either front. 
 
A Positive Note or Upward Trend? 
-------------------------------- 
 
9.  (C) Indian analysts agreed that the Foreign Secretaries' 
meeting was a long overdue first step towards improving 
relations, but differed on their interpretations of results 
and next steps.  Noting the upcoming elections in Bangladesh 
and the anti-Indian tendencies of the BNP electoral base, the 
IDSA's Datta speculated that the improved relations would 
face a ceiling as long as the country was under BNP rule. 
Dr. Deba Prasad Nanda of Delhi University agreed that the 
traditionally anti-Indian stance of the BNP would be a 
limiting factor, but told Poloff that India will need to put 
more efforts into this relationship to avoid losing a 
burgeoning market and influence to China.  JNU's Dr. Pandey 
observed that the GOI showed greater maturity by restarting 
engagement, but needs to take additional steps to fulfill 
India's role as a stabilizing force in South Asia, primarily 
through greater economic engagement. 
 
Comment: Its a Start at Least 
----------------------------- 
 
10.  (C) Whether this diplomatic overture spreads to a real 
improvement of relations will in the short term depend upon 
the upcoming meetings between the Home, Commerce and Water 
ministries and on the perception in India that Dhaka is in 
fact responding to its security concerns.  Given the recent 
terrorist incident in Ayodhya and the media sensitivity to 
perceived threats from Bangladesh, de-linking economic 
cooperation from cross-border issues in the current climate 
will be difficult and could open the Congress to BJP 
criticism ahead of elections in West Bengal (which the 
Communists are expected to win).  It is also not clear 
whether the GOI is ready to offer attractive market access to 
Bangladesh that would improve the latter's economy and reduce 
the large trade deficit.  Increasing concern about, and 
criticism of, the GOI's Bangladesh policy as well as PM 
Singh's visit to Dhaka for the November SAARC meetings are 
all incentives for New Delhi to remain engaged constructively. 
BLAKE