US embassy cable - 05NEWDELHI8245

C O N F I D E N T I A L SECTION 01 OF 07 NEW DELHI 008245 
 
SIPDIS 
 
E.O. 12958: DECL: 10/21/2015 
TAGS: PGOV, MASS, EAID, EAGR, ENRG, EINV, KNNP, ETRD, EAIR, ETTC, ECPS, TSPA, TBIO, TSPL, CVIS, KDEM, SENV, IN, PK, Indian Domestic Politics, Indo-US 
SUBJECT: BURNS-SARAN OCTOBER 21 MEETING ON BILATERAL ISSUES 
 
REF: NEW DELHI 8004 
 
Classified By: Ambassador David C. Mulford, Jr. for Reasons 1.4 (B, D) 
 
1.  (C) Summary: Much progress was made in the October 21 
opening meeting in Delhi between Under Secretary for 
Political Affairs Burns and Foreign Secretary Shyam Saran 
which reviewed the US-India joint ventures launched at the 
July 18 Summit.  Both agreed that the two sides must ensure 
that small issues do not detract from the broad and 
substantial progress laid out by the July 18 agreement.  The 
foundation steps of realizing the July 18 agenda -- creating 
and staffing appropriate working groups and formalizing terms 
of reference -- are largely complete.  Work on the agenda 
itself is now underway in numerous areas: energy, the CEO 
Forum, agriculture, information and telecomms, civil space, 
promoting democracy, HIV/AIDS, and disaster relief.  Also 
discussed were the public announcement of F-16 sales to 
Pakistan, visas for Indian scientists traveling to the US, 
the HTCG, Indian defense procurement, the Boeing-Air India 
tender, wildlife conservation cooperation, and proliferation 
security.  End Summary. 
 
Ensure Convergence Prevails Over Tactical Concerns 
--------------------------------------------- ----- 
 
2.  (C) Saran began by thanking Undersecretary Burns for the 
USG contributions to the PM's National Relief Fund for 
earthquake disaster assistance, and for his October 18 
remarks at the Asia Society.  He noted that Indians "in all 
sections of society" consider the PM's visit to the US and 
the July 18 agreement as a "major step forward" in bilateral 
relations.  Saran said that "both sides must not allow 
short-term or tactical concerns take our eye off the board 
... We must be relentlessly positive in our approach," 
although he recognized that both democracies must bring along 
our respective public opinions. 
 
3.  (C) U/S Burns reaffirmed the condolences offered by 
POTUS, the Secretary, and Ambassador Mulford for the loss of 
life due to the October 8 earthquake, and offered whatever 
relief assistance the GOI might require.  He responded that 
the US side has been hard at work in all the areas outlined 
for cooperation under the July 18 agreement, and noted that 
it signaled Washington's commitment to the new strategic 
partnership.  The U/S invited Saran to come to Washington in 
December and noted that he would return to Delhi in January, 
and suggested that many items could be finalized before the 
expected early 2006 POTUS visit to India. 
 
F-16 Sale to Pakistan: GOI Concern is Public Opinion 
--------------------------------------------- ------- 
 
4.  (C) Saran and MEA Joint Secretary (Americas) S Jaishankar 
pointed out that the GOI's concern over F-16 sales to 
Pakistan is not over strategic balance -- which they admitted 
would not be seriously impacted -- but over the optics. 
Saran predicted that Indian skeptics would view the sale as 
rewarding Pakistan's decision to abstain from the September 
24 IAEA vote on Iran (in which India voted with the US), 
which could cause political problems for India's coalition 
government.  He added that "the public will view that India 
can be their only target" (referring to the F-16s). 
 
5.  (C) U/S Burns replied that the USG is pursuing separate, 
de-hyphenated relations with New Delhi and Islamabad, in 
which the US-India relationship would be the fullest and most 
comprehensive in Asia.  He told Saran we could not let F-16 
sales unduly complicate the host of other ties which India 
and the US are forging, and informed him that the public 
announcement would probably arrive around October 26.  U/S 
Burns reminded Saran of the prospect of larger sales of US 
fighters to India, PAC-3 sales, and Indo-US fighter 
co-production, and suggested that neither the US nor India 
wants to over-hype the F-16 sale. 
 
GOI Reports Progress on Energy Dialogue 
--------------------------------------- 
 
6.  (C) Saran reported that four of the five joint working 
groups have finalized their terms of reference (TOR), and 
only the civil nuclear group's TOR is pending.  He noted that 
the two sides have not yet come to closure in three areas -- 
material security, physical security, and safeguards -- but 
predicted that the issues would be resolved in the next DVC, 
scheduled for November 2.  Saran outlined the next steps as 
face-to-face working group meetings, moving forward on the 
TOR activities, and broadening private sector participation, 
and asked if a Steering Committee meeting by the end of 2005 
was possible.  He hoped that Secretary Bodman would be 
available for a meeting before the POTUS visit to India. 
Jaishankar listed three priority areas where the GOI sought 
to realize concrete benefits: civil nuclear energy; coal 
technology (both coalbed methane and NC2 gassification); and 
renewable energy, particularly bio-diesel. 
 
7.  (C) U/S Burns noted that the working groups still have a 
lot of work ahead of them to finalize Energy Dialogue 
deliverables.  He told Saran that security issues should be 
on the civil nuclear agenda, and hoped the GOI could be 
flexible on this.  Ambassador Mulford pointed out that 
addressing the security aspects under the civil nuclear 
dialogue was "vital," and doing so would underline India's 
reputation as a responsible nuclear power.  Dividing civil 
nuclear facilities from military facilities would govern the 
timing of bringing the civil nuclear agenda before Congress. 
U/S Burns indicated that progress would have to precede a 
Steering Group meeting. 
 
CEO Forum Needs to Focus on Macro Problems 
------------------------------------------ 
 
8.  (C) The Indian members of the CEO Forum met September 9 
in Mumbai under Indian Co-Chair and prominent industrialist 
Rattan Tata, and crafted a list of issues to raise with their 
American counterparts, and the US side has done likewise, 
according to Saran.  Tata and US Co-Chair William Harrison 
are to meet in Moscow and share their inputs, and Tata had 
already met with Deputy Chairman of the Planning Commission 
Montek Singh Ahluwali.  Saran added that the proposal for a 
January meeting in Delhi between Ahluwali and Assistant to 
the President for Economic Policy Allan Hubbard worked well 
for the MEA.  The GOI was also anxious to move ahead with the 
draft framework to accelerate US investment in India that the 
GOI had submitted to US TDA on October 14, and Saran pointed 
to Secretary Snow's upcoming visit as an opportunity to move 
forward on a host of economic issues. 
9.  (C) Ambassador Mulford underlined that it is essential 
the CEO Forum convenes before the POTUS trip.  They should 
not meet prematurely, however; they must be ready to be 
productive when they meet.  The US side is distilling their 
agenda down to 4-5 major cross-cutting policy issues, 
Ambassador Mulford reported, adding that they had risen above 
corporate interests and would single out for attention the 
macro-level problems hampering the flow of Indo-US trade and 
investment.  He said that further liberalizing financial 
markets and services will be on the CEO Forum agenda, and 
could have wide-ranging impact on how India finances major 
projects like infrastructure improvements. 
 
Trade Dialogue Evolving to Forum 
-------------------------------- 
 
10.  (C) Saran proposed recasting the Trade Policy Dialogue 
into a Trade Policy Forum.  He said the GOI looks forward to 
hosting USTR Portman, pending agreement on mutually suitable 
dates. 
Agriculture Dialogue Needs Direction 
------------------------------------ 
 
11.  (C) Ambassador Mulford indicated that the Agriculture 
Dialogue was important for the POTUS visit.  However -- as he 
noted in talking to interested food and agriculture firms and 
universities at the Council on Foreign Relations in Chicago 
-- many potential stakeholders are uncertain how to move it 
forward.  Saran replied that the TORs have been finalized, 
the two sides have held several DVCs to sort out funding 
issues and create 8-person boards, and all these items will 
probably be finalized in November with a view to ensuring 
deliverables for the POTUS visit.  This issue is near the top 
of the bilateral agenda per PM Singh.  Jaishankar added that 
the Indian side had passed a 60-page report on moving the 
process forward. 
 
Information and Telecomms Dialogue 
---------------------------------- 
 
12.  (C) Saran reported that a senior Department of 
Information Technology official would soon visit the US, 
following successful DVCs that resolved the TORs.  U/S Burns 
shared that U/S Josette Shiner has been talking to US firms 
about prospects in this arena. 
 
Work Needed to Clear the Way for Civil Space Cooperation 
--------------------------------------------- ----------- 
 
13.  (C) Turning to civilian space cooperation, Saran thanked 
the U/S for the August 31 announcement that three Indian 
space organizations were removed from the Entities List, and 
repeated the GOI's call to remove the remaining Indian space 
agencies.  Such a move would garner excellent PR and would be 
practical in order to realize "ambitious results" in space 
cooperation, he added.  Saran reported that the GOI had 
received the US draft technology agreement on space launches 
and the draft on commercial aspects, and hoped to have both 
finalized as POTUS visit deliverables.  The two sides had 
some differences with the draft agreement on technical 
assistance for launching US payloads, Saran continued, adding 
that he hoped the September ISRO-NASA nondisclosure agreement 
would suffice.  Beyond the ISRO-NASA interaction, he asked 
that space experts from MEA and the Department meet to narrow 
differences.  On sending an Indian astronaut on the space 
shuttle, Saran said that Delhi had not yet received a formal 
proposal from Washington, and asked for details of what is 
envisioned, underlining that Indian astronauts would be 
"extremely interested." 
 
14.  (C) U/S Burns responded that not only does an Indian 
astronaut on a US shuttle provide excellent optics, it also 
provides an opportunity for deeper cooperation between the 
two space agencies.  He outlined that the GOI would need to 
identify several candidates to ensure at least one would pass 
the series of qualifying examinations and complete the 4-5 
years of required training, which would include multiple 
visits and much practical cooperative work.  The U/S also 
noted that the GOI's financial obligation would be in the 
range of $100,000/year.  On the agreements, the U/S said we 
are waiting for Delhi to sign the technical safeguards 
agreement and the space launch agreement. 
15.  (C) PDAS Don Camp underlined that India launching an 
American payload on the Chandrayan mission was important.  He 
explained that US law requires a technical assistance 
agreement in the case of American payloads on non-American 
spacecraft, despite ISRO's assertion that the regulations 
should not apply because they are providing the space launch. 
 We have already presented our bottom line. 
 
GOI Seeks Visa Facilitation for Space Scientists 
--------------------------------------------- --- 
 
16.  (C) Turning to a related subject, Saran told the U/S 
that he still receives reports of Indian scientists having 
their US visa applications denied or delayed, including 
scientists traveling for USG programs.  He continued that the 
GOI is having difficulty convincing some scientists of the 
benefits of the July 18 agreement, and these delays 
perpetuate the image that the US views India "as a target, 
not a partner."  The U/S underlined that the applicable visa 
regulations are global and not India-specific; that they 
cannot be suspended for an individual country; and that a 
critical factor is to allow a lead time of at least 14-21 
days.  DCM Robert Blake noted that the processing time for 
scientists has come down from over 70 days to generally 
around 14 days, demonstrating a significant effort on the USG 
side. 
 
HTCG a Defining Element of Indo-US Partnership 
--------------------------------------------- - 
 
17.  (C) Saran hailed the October 17 Indo-US Agreement on 
Science and Technology as a July 18 deliverable and called 
the HTCG "a defining element of the Indo-US partnership."  He 
added that the three foci for New Delhi were nanotechnology, 
biotechnology, and defense offsets and technology transfer. 
 
Democracy Initiative Shows Most Progress 
---------------------------------------- 
 
18.  (C) Calling the Democracy Initiative "the item that has 
moved the farthest," Saran reported that the GOI had paid 
half of its $10 million commitment in September.  He is eager 
to receive US ideas on how to take the Initiative forward, 
particularly in Afghanistan.  The GOI has identified Indian 
training courses that could be offered under through the US 
Democracy Fund.  Saran said two items he had discussed with 
U/S Dobriansky appeared promising: a bilateral event on 
federalism and links with the Democracy Transition Center in 
Budapest.  The U/S responded that we need to go further on 
democracy building, in Afghanistan and elsewhere. 
 
Progress on HIV/AIDS Initiative 
------------------------------- 
 
19.  (C) Saran outlined that private sector involvement in 
the HIV/AIDS Initiative is moving forward, including the 
Federation of Indian Chambers of Commerce and Industry, the 
Confederation of Indian Industry, and AmCham, with India's 
ICICI bank to be the secretariat.  He expressed appreciation 
for the streamlining of FDA approval for Indian drugs to 
combat HIV/AIDS, and reported that clearance time has dropped 
from 1-2 years down to three months.  The Health Ministry is 
identifying collaborative partners to conduct clinical trial 
research. 
 
Earthquake Underscores Disaster Relief Initiative 
--------------------------------------------- ---- 
 
20.  (C) Saran reported that the Home Affairs Ministry has 
yet to allocate sufficient funds to activate this initiative, 
but mil-mil cooperation is proceeding: DoD and the Indian 
Integrated Defense Staff have held joint disaster relief 
exercises and joint training, and they continue with capacity 
building and building capacity in third countries.  The DCM 
reiterated that PACOM is ready and willing to assist the 
Indian Army relief work following the October 8 earthquake, 
including perhaps providing airlift outside of the affected 
region to free up Indian assets for work within J&K, but 
India must make a request. 
 
Robust Defense Acquisitions List 
-------------------------------- 
 
21.  (C) Saran outlined several US systems the Defense 
Ministry is considering, including multi-role combat aircraft 
(MRCA), the P3-C Orion, and Patriot PAC-3.  He reiterated the 
GOI refrain that Delhi is primarily concerned that the US 
remain a "reliable" defense procurement source.  Saran listed 
higher level technical clearances, co-development or licensed 
production projects, outsourcing and offsets, and Indian 
participation in the US global supply chain as key GOI goals. 
 He expressed his appreciation for progress on missile 
defense cooperation, including the classified PAC-3 briefing. 
 
 
22.  (C) U/S Burns agreed that defense cooperation offers 
enormous promise, and should play a larger role in the POTUS 
visit.  He singled out PAC-3 and the MRCA as being 
particularly important.  Ambassador Mulford underlined the 
importance of Delhi expanding private sector offset 
opportunities beyond the present, narrow government focus. 
He recommended that Indian and US firms examine global best 
practices and generate ideas for joint ventures to accomplish 
the large offset percentages envisioned. 
Boeing Sale to Air India 
------------------------ 
 
23.  (C) U/S Burns asked Saran when a decision would be made 
on the proposed Boeing sale to Air India (reftel), and 
underlined the importance of the civil aviation relationship. 
 Saran responded that he would check on the status of the 
Boeing tender. 
 
Wildlife Conservation Cooperation 
--------------------------------- 
 
24.  (C) U/S Burns noted the recent visit to India by DAS 
McMurray and asked if there were avenues for cooperation on 
wildlife conservation.  Jaishankar, who had met with 
McMurray, replied that there are transnational elements that 
may lend themselves to cooperation, such poached tigers being 
trafficked to China.  Other possible prospects include joint 
work on crime prevention and the spread or animal diseases. 
He added that he would pass this offer on the wildlife 
officials in the Ministry of Environment and Forests.  DCM 
Blake added that McMurray had had a productive visit and 
would be drafting a paper with ideas for future cooperation 
that the President and PM might announce. 
 
PSI: It's Not Just the Core Group 
--------------------------------- 
 
25.  (C) Underlining the importance of PSI to the global 
nonproliferation system, U/S Burns noted that, with the 
disbanding of the Core Group, India joining PSI would 
underscore its non-pro credentials.  Saran responded that, 
beyond the Core Group issue, the GOI remains concerned over 
the SUA protocols, and hoped the USG would "accommodate an 
adjustment to take our points on the matter."  Government 
lawyers are still reviewing the legal obligations joining PSI 
would impart on India.  U/S Burns replied that we are aware 
of India's SUA concerns, and noted that India is the only 
major US partner not participating in PSI.  Ambassador 
Mulford pointed out the positive optics India would enjoy by 
joining PSI, and that US skeptics of the civil nuclear 
agreement may highlight India's non-participation following 
the disbanding of the Core Group because they thought that 
was Delhi's overriding concern over joining PSI -- although 
the issues are not linked, they are also not completely 
unrelated. 
 
Comment 
------- 
 
26.  (C) The impression distilled from the overview of 
bilateral relations is that the preliminary post-July 18 
steps -- forming working groups and agreeing on agendas and 
TORs -- are or soon will be completed, but much remains on 
completing the agendas themselves.  The GOI appears confident 
that the working groups will close the gaps in time to 
complete deliverables for the POTUS visit.  Of particular 
note, the GOI packaged the issue of F-16s for Pakistan more 
as a matter of Delhi preparing to manage Indian public 
opinion and less as an Indo-Pak issue.  END COMMENT. 
 
List of Participants 
-------------------- 
 
27.  (U) GOI Delegation 
Foreign Secretary Shyam Saran 
Joint Secretary (Americas) S Jaishankar 
Joint Secretary (DISA) Hamid Ali Rao 
Political Counselor (Indian Embassy/Washington) Renu Pall 
Director (Americas) Gaitri Kumar 
Deputy Secretary (Americas) Santosh Jha 
Under Secretary (Americas) Raj Srivastava 
 
28.  (U) USG Delegation 
U/S Burns 
Ambassador Mulford 
Senior NSC Director John Rood 
PDAS Don Camp 
DCM Robert Blake 
Political Counselor Geoff Pyatt 
P Special Assistant Tobin Bradley 
Poloff Howard Madnick (notetaker) 
 
29.  (U) This cable was cleared by U/S Burns. 
MULFORD