US embassy cable - 05NEWDELHI8231

C O N F I D E N T I A L SECTION 01 OF 05 NEW DELHI 008231 
 
SIPDIS 
 
E.O. 12958: DECL: 10/21/2015 
TAGS: PREL, ECON, PGOV, PINR, IN, PK, IR, External Political Relations 
SUBJECT: JASWANT SINGH BELIEVES THE UPA IS INCAPABLE OF 
MANAGING THE INDO/US RELATIONSHIP 
 
REF: NEW DELHI 2949 
 
Classified By: Ambassador David C. Mulford, for Reasons 1.4 (B, D) 
 
1.  (C) Summary:  Meeting with U/S Burns and the Ambassador 
in New Delhi on October 21, former Foreign Minister and BJP 
leader Jaswant Singh expressed wholehearted support for the 
India/US agenda and its many components, but reading between 
the lines, that support was actually qualified.  Singh seemed 
preoccupied by domestic political considerations and very 
critical of the UPA and its performance.  He was adamant that 
the UPA lacked the ability to properly manage the India/US 
agenda and was critically handicapped by its reliance on 
Communist support to remain in power.  Singh implied that as 
long as the UPA was ruling, the US should not expect dramatic 
progress on its agenda and would have to wait for an NDA 
return to power to see real progress.  This changed stance 
reflects the changed fortunes of his party, which has 
suffered many political setbacks since joining the opposition 
in 2004.  Singh appeared to doubt that the BJP and its NDA 
allies could provide sufficient influence in the current 
political setup to move the process forward, that the BJP 
would place domestic considerations first, and would not 
sacrifice its political capital to advance the US/India 
agenda.  End Summary 
 
Preparation for POTUS 
--------------------- 
 
2.  (C) U/S Burns opened the meeting by noting that he was in 
India in June, prior to PM Singh's Washington visit, and is 
here again in preparation for the POTUS visit to New Delhi 
likely to take place early in 2006.  The purpose of the visit 
is to interact with Indian interlocutors regarding issues in 
the India/US bilateral relationship such as Pakistan/India, 
and nuclear questions.  The U/S pointed out that there has 
been a "sea change" in Washington regarding the relationship 
with India, and that there is broad congressional support for 
a broader relationship.  He asked Jaswant Singh for his 
thoughts and advice. 
 
3.  (C) Singh referred to previous meetings with President 
Bush in which they "exchanged views" regarding the 
relationship, and that he was clear regarding how he wanted 
things to develop.  He pointed out that during the 
President's first term the administration was "preoccupied: 
and did not give proper attention to the relationship, and 
then "we (the BJP) were thrown out" in 2004.  Singh praised 
Ambassador Sen in Washington, saying he was "capable and 
able," and had been hand-picked by the NDA government for the 
post.  He recalled informing Ambassador Sen about the 
"pitfalls" of the relationship prior to his departure for 
Washington, and conferring with him in July.  Singh revealed 
that the Ambassador and PM had provided him with a complete 
readout of the Bush visit. 
 
Advice to the Prime Minister 
---------------------------- 
 
4.  (C) Singh said he would be frank and tell the U/S exactly 
what advice he had provided the PM.  He opined that the UPA 
"does not have the intellectual commitment to improve 
US/India relations," as it had inherited its platform in this 
regard from the previous NDA government, and had "grown into" 
its present position.  He purportedly told the PM that India 
needs to stop asking for favors and start delivering to the 
world community.  Singh also pointed out that the UPA would 
not be able to deliver as long as it was propped up by the 
Communists, who he claimed are bent on "hollowing out" the 
Congress party by "disapproving anything and everything." 
Singh emphasized that these foreign policy issues are 
inherently "political," and the PM has not properly dealt 
with their political dimensions. 
 
5.  (C)  The PM purportedly responded to Singh that he cannot 
"rely on" anyone in the UPA leadership to give him proper 
advice except Finance Minister Chidambaram and some of the 
"scientists."  Singh emphasized to the PM that the 
non-proliferation regime has changed from one of controlling 
testing to controlling the production of fissile material and 
the GOI needs to stay ahead of these trends.  He also 
endorsed a missile defense system for India, saying that it 
makes sense to adopt a defensive rather than an offensive 
strategy.  Singh concluded his advice to the PM by 
emphasizing that the real enemies of Congress are not in the 
opposition, but "with you," and they will "defeat you." 
 
6.  (C) Singh characterized the PM as a "good economist," who 
is good at "reading paper," but not strong on executing 
policy.  As he told Strobe Talbott, after the Indian nuclear 
test of 1998, India must demonstrate that it is "part of the 
solution and not a problem," and to realize this, the country 
must have a total agenda, which the UPA does not have.  Singh 
then attacked the UPA for its undue "secrecy" regarding its 
decision on the IAEA vote, saying it was not necessary, and 
the GOI must explain to the opposition its reasoning behind 
the vote. 
 
Bilateral 
--------- 
 
7.  (C) U/S Burns emphasized that the US is ready, and there 
is a growing political consensus in favor of a broad 
expansion of Washington/New Delhi ties.  There are many 
components to this cooperation, including a much more 
intensive business and economic dialogue on trade, energy, 
defense production, and opening investment.  The second piece 
of the policy regards new cooperation in entirely new areas 
such as space launch, and democratization.  The UN has just 
launched a Democracy Fund, and the USG hopes it can work with 
the GOI on this. 
 
8.  (C) Civil Nuclear cooperation between the US and India is 
"very contentious" in Congress, with some criticizing the 
President for putting too much trust in India.  We are 
convinced, however, that we are right, and that it is in the 
US interest to go from the "abnormal" situation of the past 
30 years to a new pragmatic relationship, and he hoped 
Congress would come around in the next few months.  The US 
has already gone to the NSG and emphasized the need to 
liberalize and modernize norms regarding India, and there are 
a full range of technical and scientific projects the two 
countries can work together on.  By the time of the POTUS 
visit, he predicted that we will see "dramatic steps forward." 
 
9.  (C) The U/S also pointed out that there is scope for 
"much more active cooperation" with India in regional affairs 
and in transnational issues such as HIV/AIDS, crime, 
narcotics, trafficking in persons and nuclear 
nonproliferation.  He did not see much "separation" between 
the two countries on these issues and foresaw India playing a 
global role in the future. 
 
and Iran 
-------- 
 
10.  (C) U/S Burns pointed out that the US position on Iran 
and the IAEA is more "nuanced" than popularly perceived in 
India.  The USG seeks a negotiated settlement of the dispute. 
 The Secretary has met with the Russians to broaden the 
diplomatic environment beyond the EU3 to eventually include 
Russia, India, China, Brazil, and South Africa.  The goal is 
to isolate Iran and pressure it back to the negotiating table. 
 
11.  (C) Emphasizing that the new government in Teheran is 
"more conservative" than the previous one, (half of its 
Cabinet comes from the Revolutionary Guard), the U/S noted 
that it will need more time to determine its policy 
orientation, and may be getting back to a more balanced 
position.  The US is prepared to go to the IAEA and the UNSC 
for votes, but would prefer multilateral negotiations, and 
believes that Russia shares this view.  India should 
encourage Iran to return to talks and should advise agaisnt 
enrichment.  It is significant that India voted with the 
majority in the IAEA and that Iran is isolated.  The 
President has agreed that every country has a right to 
peaceful nuclear energy, but Iran needs to rebuild trust 
within the IAEA that was lost by its deception.  This will be 
a gradual diplomatic process in which India will pay a key 
part.  Iran must come to realize that its position on nuclear 
weapons does not make sense. 
 
India is Supportive, But... 
--------------------------- 
 
12.  (C) Jaswant Singh maintained that the BJP has always 
pressed India to help by engaging Iran, and believes that a 
nuclear armed Iran is not in India's interest.  However, the 
UPA stance on this issue is not correct.  It needs to sit 
down and consult with the opposition and explain its 
position.  India is in a unique position in this regard in 
that 40 percent of its Muslims are Shias and it is the third 
largest Shia country in the world.  India must know something 
about Islam, as its Muslims are not involved in terrorism. 
 
A Spotty Historic Record 
------------------------ 
 
13.  (C) Singh characterized the US/India relationship as 
"episodic" and reminisced about when he was Defense Minister, 
when "the only word in the US vocabulary was no."  He noted 
that both countries need to engage politically and learn from 
each other to get out of this pattern of highs and lows.  He 
emphasized that he was totally on board when it comes to the 
US/India economic agenda, and there was room for dramatic 
movement in military to military relations.  However, the 
biggest difficulty is the huge gap between promise and 
delivery.  The GOI is saddled with an "obstinate bureaucracy" 
which is determined "not to let anything happen."  The 
private sector cannot implement economic reform on its own. 
The GOI must be engaged. 
 
14.  (C) The Ambassador pointed out that Secretary Snow is 
coming to New Delhi in November to address these issues.  He 
noted that one of the greatest needs in India is the further 
liberalization of the financial market, and the USG is 
confused about the division of labor, as there seems to be a 
contradiction between the policies of the Finance Minister 
and the Reserve Bank.  The Bank is very conservative and this 
is the biggest impediment to economic progress.  Snow will 
need guidance on how and where to push. 
 
15.  (C) Singh responded that this was the first he had heard 
of these problems.  The Reserve Bank should not be making 
economic policy, he opined, and should restrict its 
activities to managing the currency.  The Finance Ministry 
may be using the Bank to justify its failure to deliver.  The 
Reserve Bank Governor Dr. Reddy meets with him often, and he 
would discuss these issues with him.  This problem stems from 
the UPA's failure to identify who runs the financial 
portfolio.  The Communists remain the greatest obstacle and 
will continue to defeat the government on essentials. 
 
Caution Is Justified 
-------------------- 
 
16.  (C) In response to a question from U/S Burns, regarding 
parliamentary and public support for closer US/India ties, 
Singh emphasized that the BJP is committed, but was skeptical 
regarding the political climate.  This is a democracy and no 
one can predict future priorities and political instincts can 
overwhelm policy considerations.  The Communists will 
obstruct the policy and the PM should deal with this problem. 
 Singh emphasized that the US should not have frontloaded the 
relationship with nuclear issues but should have waited to 
construct a large political base first. 
 
17.  (C)  Kashmir is another place where the UPA may not be 
able to deliver.  The NDA worked to put the past behind and 
move forward.  However, Kashmir and the range of India/US 
issues are hampered by institutional memories.  The NDA made 
progress to overcome this and PM Singh is trying, but Singh 
was not hopeful.  The NDA will support the US/India agenda, 
but the UPA is dubious, especially since there is a hierarchy 
of controversial issues to be dealt with that will be 
difficult to address. 
 
Trust But Verify 
---------------- 
 
18.  (C) Singh was also skeptical regarding the US/Pakistan 
relationship, saying that he had dealt with President 
Musharraf earlier and he epitomized the "best options 
syndrome."  Whoever becomes the leader of Pakistan, whether a 
military dictator or an elected civilian, is embraced by the 
US as the "best option," to address Pakistan's problems.  He 
complained that he could not work within the "best option" 
paradigm, as Musharraf has "betrayed me."  He is giving the 
US what it wants and the US must continue with him to try to 
get the maximum advantage, but should not expect Musharraf to 
"repeatedly sell his soul." 
 
19.  (C) The US Pakistan policy structure is based on one 
person.  Singh noted that no US diplomatic mission or 
diplomat has been attacked in India, but that is not the case 
with Pakistan.  The US and India are "natural allies," but 
Pakistan is different.  It was carved out of India to provide 
Muslims a separate nation and must continue this separation 
to survive.  Pakistan has repeatedly betrayed Indian peace 
efforts.  He remembered going to Kandahar to retrieve the 
hi-jacked Indian aircraft and its passengers.  The hi-jackers 
drove to Quetta where they were warmly welcomed by their ISI 
handlers.  Musharraf has given you all that he can. 
 
20.  (C)  When U/S Burns responded that the US needs Pakistan 
to jointly combat the Taliban and Al Qaeda, Singh urged the 
US to determine whether it is "paying too high a price" for 
services from Pakistan.  He pointed out that if left alone 
the people of Kashmir would have solved their problems, but 
Pakistan has insisted on interfering in order to justify 
India's partition.  He conceded that India needs a peaceful 
and economically viable Pakistan. 
 
21.  (C) U/S Burns emphasized that the US will move forward 
with Pakistan, but the A.Q. Khan problem has not yet been 
fully resolved.  The US no longer maintains a "hyphenated 
relationship" when it comes to relations with India and 
Pakistan in any case, and the US/India relationship is much 
broader in its scope. 
 
23.  (C) Singh concluded by urging the US not to become 
"illogical" in its relations with states such as Pakistan. 
He recounted how an American at the IAEA had once proposed a 
new category of "gross violator" of the NPT.  If this policy 
had been pursued in regards to Pakistan, it would have upset 
US/Pakistan policy.  The same thing could now happen with 
Iran.  The US need less arbitrary policies that appear less 
"mismatched" than at present.  Singh confirmed that he hoped 
to travel to the US at the beginning of 2006 and would visit 
the State Department while in Washington. 
 
Comment 
------- 
24.  (C) Singh made the right noises regarding NDA support 
for the US/India agenda, and the Indian stance regarding Iran 
in the IAEA, but appeared more focused on domestic politics 
than the international agenda.  His criticism of the Prime 
Minister and his performance was more vitriolic than 
expected, and he was particularly contemptuous of the UPA's 
Communist allies.  Singh was convinced that the UPA is an 
unholy alliance between a clueless Congress and rapacious 
Communists that is unworkable and unable to deliver on any 
aspect of the political/economic agenda, whether it be 
economic reform, dealing with Iran and Pakistan or the 
India/US relationship.  Such an absolutist approach would 
imply that only a return of the NDA to power can save the 
agenda.  The BJP out of power presented a different picture 
than the BJP in control in New Delhi.  The party has suffered 
many setbacks since leaving office in 2004 and is clearly on 
the defensive.  It is clear that as long as it faces an 
uphill battle against the UPA, it will not be prepared to 
sacrifice its domestic political fortunes on the altar of 
improved US/India relations. 
 
25.  This cable was cleared by U/S Burns. 
MULFORD