US embassy cable - 05NEWDELHI6804

C O N F I D E N T I A L SECTION 01 OF 04 NEW DELHI 006804 
 
SIPDIS 
 
E.O. 12958: DECL: 09/01/2015 
TAGS: PREL, PGOV, ENRG, PBTS, IR, IN, India_Iran 
SUBJECT: INDIA WALKING IRAN TIGHTROPE 
 
REF: A. NEW DELHI 6485 
     B. NEW DELHI 5615 
     C. 04 NEW DELHI 2556 
 
Classified By: A/DCM Geoff Pyatt for Reasons 1.4 (B, D) 
 
1.  (C) Summary:  As Natwar Singh travels to Tehran September 
2 to meet the new regime, India's overriding goal is securing 
energy, followed by preserving access to Afghanistan, 
maintaining influence in what India perceives as a swing 
state in the debate over Islam, and advancing other business 
relationships.  Growing international unease about Iran's 
nuclear ambitions and long-standing relationships with 
terrorist organizations are subordinated to India's 
realpolitik interests in Iran.  New Delhi hopes statements in 
the IAEA and elsewhere encouraging Iran in the right 
direction will appease other partners (especially the US) 
without upsetting its ties with Tehran.  The GOI has clammed 
up about the August 30 visit of Tehran's nuclear negotiator 
Ali Larijani, with normally open interlocutors protesting 
ignorance of his message.  India needs good relations with 
Washington and Tehran, and hopes to avoid being forced to 
choose between the two.  End Summary. 
 
Balancing Interests in Iran: Pipeline Trumps 
-------------------------------------------- 
 
2.  (C) India is engaged in a risky balancing act in its Iran 
policies.  While the GOI has no illusions about Iran's 
nuclear ambitions or support for terrorism, these concerns 
are subordinate in its foreign policy and economic 
considerations.  New Delhi does, however, fear the 
consequences of being forced to choose between Iran and the 
US or other western countries if the nuclear standoff 
escalates.  Against this danger, India sees Iran as an 
enormous actual and potential energy supplier, and a 
balancing power on Pakistan's opposite border.  Thus, Indian 
policy tries to advance its interests with Tehran, appease 
the West, and largely ignore the looming crises. 
 
3.  (C) To this end, New Delhi hosted the visit of Iran's top 
nuclear negotiator, Ali Larijani, for talks August 30. 
Larijani sought support for Iran's IAEA position in meetings 
with Natwar Singh and NSA Narayanan.  Larijani told the press 
that he sought India's help in the IAEA on Iran's nuclear 
program, insisted Iran was fully committed to international 
regulations related to the nuclear field, and reported that 
the focus of his talks was expanding "strategic relations and 
partnership" with India on energy, including the planned $7 
billion, 1800 mile natural gas pipeline from Iran through 
Pakistan to India and the recently-agreed deal to export 
liquefied natural gas to India.  Star News foreign affairs 
editor Jyoti Malhotra told us September 2 that the pipeline 
deal is moving fast.  Larijani told IRNA upon his arrival in 
Tehran that the modalities of Pakistan transit were a key 
element of his New Delhi talks. 
 
MEA: Iran a Lower Priority 
-------------------------- 
 
4.  (C) In this context, USG concerns with Iran (WMD programs 
and support for terrorism) remain largely unaddressed in GOI 
policy-making in part because they are hidden under two 
levels of neglect from decision makers.  First, Iran is the 
third priority in the MEA division tasked with overseeing the 
relationships with Pakistan and Afghanistan.  Indeed, Natwar 
Singh's reaction when the Ambassador raised Iran with him on 
August 23 (Ref A) suggested strongly that the Minister was 
unaware of the coincidence between his visit to Tehran and 
the next IAEA report.  Second, Iran's attraction for Indian 
foreign policy is primarily as a source of oil and natural 
gas, and not out of any ideological affinity.  Iran's role as 
a gateway to Afghanistan, a neighbor to play off of Pakistan, 
and a swing state in the Muslim world are also important. 
Although the GOI acknowledges international worries about 
Iran's nuclear deceit and support for terrorism, it has 
limited itself in public to anodyne suggestions encouraging 
Iran to clear up problems through dialogue with the IAEA.  In 
private we understand the GOI approached Iran at the UK's 
behest to urge a positive reply to the latest EU-3 offer. 
 
MEA Statements on Iran 
---------------------- 
 
5.  (SBU) GOI interlocutors have been mum on the content of 
Larijani's New Delhi visit, but MEA spokesman Navtej Sarna 
previewed for the media the FM's September 2-4 Tehran trip on 
September 1 and took questions on Larijani's visit.  Sarna 
refused to comment on Iran's IAEA and EU-3 negotiations, even 
avoiding the standard GOI encouragement for Iran to comply 
with its NPT obligations.  Sarna declined to answer whether 
India had consulted with the US, or to discuss the nuclear 
matter further.  He also avoided questions on India's view of 
a role for the NAM in the IAEA or EU-3 negotiations. 
 
6.  (C) In the absence of the regional Joint Secretary 
(accompanying the FM to Tehran), A/DCM called J/S (Americas) 
S Jaishankar to express concern about the forgiving tone of 
Sarna's briefing, noting that in the past GOI officials have 
been clear about the requirement for Iran to live up to its 
NPT obligations.  At this juncture in the EU-3 process, we 
have stressed, it is important that Indian actions and 
statements not give the impression of forgiving Iran. 
Jaishankar reported that he had discussed Iran with the 
Foreign Minister, who indicated that he would rather not 
conduct India's Iran diplomacy "in the glare of the public 
spotlight."  The J/S added that both Natwar and Foreign 
Secretary Saran would want Iran to be a priority topic of 
 
SIPDIS 
discussion during meetings with the Secretary and U/S Burns 
on the margins of UNGA. 
 
Domestic (NAM and Shia Muslim) Considerations 
--------------------------------------------- 
 
7.  (C) Domestic opinion continues to influence GOI policy 
toward Iran.  The UPA government derives a significant 
portion of its support from the Left Front and Congress 
factions who view Iran as a plucky developing nation holding 
out against Western imperialism.  Although we do not believe 
this view prevails among senior GOI officials, who strongly 
oppose Iran developing nuclear weapons and recognize the 
threat this will pose to Indian interests, it does constrain 
their ability to speak out publicly against their fellow NAM 
member and be seen as siding with the United States.  An 
op-ed by a reliably anti-American reporter for the Hindu on 
September 1 encouraged the GOI to stand by Iran as the 
"litmus test" of India's willingness to pursue an 
"independent" foreign policy. 
 
8.  (C) Additionally, Iran sees itself as a protector of Shia 
around the world, including some 13 million in India.  The 
Iranian Embassy is very active in Shia cities like Lucknow, 
and our Shia interlocutors have told us that they expect the 
new Ahmadinejad regime in Iran to be more active in trying to 
whip up anti-American sentiment among Indian Muslims (Ref B). 
 This religious appeal will also restrict the leeway of the 
UPA government to be seen siding with the US, as the UPA came 
to power promising to improve India's relations with the 
Muslim world.  These domestic sentiments (which Iran played 
up with its appeal to involve the NAM in the nuclear 
negotiations) will be a thorn in the side, forcing the GOI 
leadership to make difficult choices as it calibrates its 
public approach to Iran. 
 
The Middle Neighbors: Pakistan and Afghanistan 
--------------------------------------------- - 
 
9.  (C) India's ties to Iran have a Pakistan and Afghanistan 
dimension as well.  India sees Iran as a useful power with 
which to cooperate to encircle Pakistan, although it 
recognizes that Tehran aligns with Pakistan on the issue of 
Kashmir, and has in the past protested India's treatment of 
Muslims (Ref C).  Iran, desiring Indian business and 
suffering its own strained relations with Pakistan, appears 
deliberately to have toned down its earlier comments on 
Muslims in order to maintain good relations with India.  The 
outcome of both parties' balancing is a politely cordial but 
shallow commonality of interests. 
 
10.  (C) Iran's importance to India is greatly enhanced by 
Pakistan's unwillingness to grant transit rights to Indian 
goods moving to Afghanistan.  Helping Afghanistan is a top 
Indian foreign policy goal.  Iran is India's least expensive 
alternative entry point to reach Afghanistan and Central 
Asian markets, leading to the Indian commitment to expand the 
Chabahar port and build roads from there to Afghanistan. 
However, the MEA has complained to us that Iran has been less 
than helpful to India in providing access to Afghanistan and 
support (supplies and fuel) for India's Afghan reconstruction 
efforts. 
 
Hoping to Duck a Confrontation Between Useful Partners 
--------------------------------------------- --------- 
 
11.  (C) Ultimately, although formal India-Iran relations are 
cordial, they remain prickly and ultimately self-serving. 
Retired Ambassador to Iran Hamid Ansari, now a member of the 
Prime Minister's National Security Advisory Board, agreed 
that India's policy has always been based on hard national 
security interests, despite all the talk of brotherly 
relations.  What is clear is that the elites in New Delhi do 
not want to have to choose sides between Tehran and 
Washington.  India has so far publicly supported our stance 
on Iran's NPT obligations while desperately hoping to avoid 
any vote in the IAEA that would force it to come out publicly 
in favor of one capital over the other.  Indian policy is 
informed by a hard-nosed realpolitik calculus, but reflects a 
hope that Washington may one day adopt a modus vivendi with 
Tehran, at which stage India would position itself to help 
build bridges between its two partners. 
 
What We Can Do to Try to Alter the Dynamic 
------------------------------------------ 
 
12. (C) If the two main areas of Indian interest (energy and 
Central Asian access) were to disappear, India would have 
much less glue left in its relations with Tehran.  Despite 
our commitments, the USG cannot solve India's energy needs 
immediately, but we do have an opportunity to try to 
eliminate the attraction of access via Iran to Central Asia 
by helping convince Pakistan to allow Indian transit to 
Afghanistan (septel). 
 
13.  (C) The mixed signals from the GOI (including the near 
simultaneous acceptance of our Iran briefing team, Larijani's 
New Delhi visit, and dispatching FM Singh to Tehran) 
illustrate India's continued efforts to straddle the fence. 
We should continue to make clear to New Delhi our view that 
turning a blind eye to Iran's nuclear ambitions out of 
NAM-centric motivations will not help India's relations with 
us or with Iran in the long run.  The GOI realizes that 
coming down on either side of the fence will involve painful 
choices; we need to help soften the impact of sticking with 
us by eliminating India's need for Iran to advance its Afghan 
policy and achieve energy security.  Without these two 
linchpins, India's affinity for Iran could fade, and a 
potential major irritant in our relations with India might 
subside. 
 
14.  (U) Visit New Delhi's Classified Website: 
(http//www.state.sgov/p/sa/newdelhi) 
MULFORD