US embassy cable - 05NEWDELHI8394

C O N F I D E N T I A L SECTION 01 OF 03 NEW DELHI 008394 
 
SIPDIS 
 
STATE PASS TO USTR 
 
E.O. 12958: DECL: 10/06/2015 
TAGS: PGOV, ETRD, PREL, SCUL, PINR, EINV, ELAB, SOCI, IN, Indian Domestic Politics 
SUBJECT: LEFT RAISES THE STAKES IN CONFRONTATION WITH 
DITHERING CONGRESS 
 
Classified By: DCM Robert Blake, Jr. for Reasons 1.4 (B, D) 
 
1.  (C)  Summary:  On October 27, after a four month hiatus, 
the Left Front (LF) deigned to meet their Congress coalition 
partners again in their formal Coordination Committee, but 
instead of being cowed by their recent pummelling in the 
press, the Communists were even more combative and rigid, and 
their obstructionism leeched into new areas such as foreign 
investment in education.  Prior to the conclave, the Left 
leaders promised to confront Congress on its foreign and 
economic policies, especially FDI in the retail sector, the 
GOI vote on Iran in the IAEA and the perceived pro-US tilt in 
Indian foreign policy.  The LF, not content with venting 
itself in the coordination process, will sponsor nationwide 
mid-November demonstrations urging the GOI to "vote with 
Iran" in future IAEA votes and oppose foreign investment in 
Indian universities.  This is Indian political theater at its 
most craven and non-constructive.  The LF is taking advantage 
of the BJP's self-absorption to ratchet up the rhetoric to 
scare the Congress, but has no intention of actually bringing 
down the government.  Congress is likely careful and afraid 
enough to put its own agenda on hold until upcoming state 
elections determine which direction the political wind is 
blowing.  We should expect few economic and foreign policy 
initiatives from Congress until domestic political fortunes 
become clearer after the Bihar poll results are finalized in 
late November.  Until then, the Left will snort and bluster, 
scaring investors and frustrating Indians who would actually 
like to see some quicker movement to press ahead with needed 
reforms.  End Summary. 
 
Lots of New Bombast From the Left 
--------------------------------- 
 
2.  (U) After a four month hiatus caused by their ongoing 
dispute regarding privatization of the Bharat Heavy 
Electricals Limited (BHEL), Congress and the Left Front (LF) 
held a United Progressive Alliance (UPA) coordination meeting 
on October 27. On the day before the meeting, the LF 
leadership spelled out an ambitious agenda to confront the 
UPA.  CPI(M) General Secretary Prakash Karat was confident 
that the process would work well, while CPI National 
Secretary D Raja maintained disingenuously that "A proper 
 
SIPDIS 
discussion and arriving at consensus is a must for the smooth 
running of the government, which we want to last for a full 
five years." 
 
Our Beloved Allies the Iranians 
------------------------------- 
 
3.  (U) CPI(M) Politburo Member Sitaram Yechury noted that 
the principal issues irritating the LF were the UPA's foreign 
policy orientation, "anti-Iran stand," and the proposal to 
open India's retail market to FDI.  Raja hoped that the UPA 
would change its earlier stance in the IAEA and vote in favor 
of Iran at the next IAEA meeting on November 24.  Forward 
Bloc General Secretary Debrat Biswas claimed that the LF 
would demand that the UPA "maintain and strictly follow our 
independent foreign policy based on the NAM and not tilt 
toward the US, as the latter is not a reliable ally." 
 
Feeling its Oats, and Spreading the Misery 
------------------------------------------ 
 
4. (C) More ominously, the Left clearly feels it has Congress 
cowed enough to start expanding its obstructionist agenda in 
other fields.  The emboldened LF is not content to air its 
grievances only within the formal coordination process.  In a 
bit of old-fashioned political theater, the left convened a 
seminar on "India's Independent Foreign Policy" (read: 
"anti-US") on October 27 and is reportedly planning Iran vote 
demonstrations for November 13 in Lucknow, Calcutta, 
Hyderabad and Mumbai, timed to coincide with the reopening of 
Parliament the week of November 21 (and just in time for the 
November 24 IAEA session).  The CPI and CPI(M) have also 
launched a new attack against the Commerce Ministry's Doha 
round proposal to make India more accessible for foreign 
universities.  Our PMO contacts tell us that PM Singh is 
personally interested in this idea and wants to raise further 
the quality of Indian education.  However, in a statement, 
the Left warned that the entry of foreign universities into 
India will foster "cultural insensitivities" by introducing a 
curriculum "not aligned with Indian views on Kashmir and the 
freedom struggle."  The left also predicted that such a 
measure would add to an "urban elitist bias" and poach the 
best teachers from Indian institutions. 
 
Consultations Resume, Enveloped in Threats 
------------------------------------------ 
 
5.  (U)   At the Consultation Committee meeting, Sonia 
Gandhi, Prime Minister Manmohan Singh, and Finance Minister 
Chidambaram, represented Congress, while the entire left 
leadership, headed by Prakash Karat, attended.  As expected, 
the Left objected to UPA proposals to open retail trade to 
FDI, saying that the decision was "unjustifiable," as India 
has no prior commitment to the WTO to do so.  The LF also 
decried the GOI vote on Iran in the IAEA, as a sacrifice of 
India's "independent foreign policy," and thundered that the 
UPA "not repeat its mistake" of voting against Iran if the 
issue again comes up for a vote at the IAEA meeting on 
November 24.  The LF then urged the UPA to support the 
Women's Reservation Bill and the Scheduled Tribes 
(Recognition of Forest Rights) Bill in the upcoming 
Parliamentary session.  Congress asked the LF to approve the 
disinvestment of small portions of government equity in 
non-profit making public sector enterprises, and for LF 
support of three bills to amend banking laws and the Pension 
Bill, currently under consideration by the Parliamentary 
Standing committee on Finance.  The meeting did little to 
resolve differences, with the UPA agreeing merely to study 
further the Left's urgings. 
 
COMMENT:  Emboldened, But Still Delirious 
----------------------------------------- 
 
6.  (C) COMMENT:  The coordination meeting was pure political 
theater.  Congress sought to appear cooperative, but will 
continue to press its agenda, while the CPI(M) is happy to 
continue to criticize Congress policies without precipitating 
a mid-term poll that could propel the dreaded BJP back into 
power.  Both Congress and the LF are aware of the unwritten 
rules of this game and are playing to their respective 
galleries.  As long as the BJP is unable to play the role of 
a viable opposition, the LF is free to take on Congress 
across-the-board without fear.  India's political class is 
waiting to see if elections in Bihar will reveal a clear 
trend. Until that happens, we should not expect dramatic 
political or economic initiatives.  While these supposed 
coalition partners spar over what ought to be economic 
no-brainers, a billion people are crying out for needed 
reform, and the Indian Margaret Thatcher is nowhere to be 
found.  END COMMENT. 
MULFORD