US embassy cable - 05NEWDELHI9319

S E C R E T SECTION 01 OF 06 NEW DELHI 009319 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 12/08/2015 
TAGS: PREL, PGOV, ETRD, ENRG, EPET, PTER, PINR, IN, BA, IR, IS, IZ, QA, MU, AE, XF, India_Iran, India-Iraq, India-Israel 
SUBJECT: INDIA SEEKS TO PROTECT CITIZENS, SECURE ENERGY 
INTERESTS IN MIDDLE EAST (C-NE5-00945) 
 
REF: A. STATE 218793 
     B. NEW DELHI 9223 
     C. RIYADH 8755 
     D. NEW DELHI 6841 
     E. NEW DELHI 6804 
     F. MUMBAI 1688 
     G. 04 NEW DELHI 8053 
     H. DAMASCUS 6389 
     I. NEW DELHI 4194 
 
Classified By: Political Counselor Geoff Pyatt for Reasons 1.4 (B, D) 
 
1.  (C) Summary: While India has major interests in the 
Middle East (energy, trade, expatriate workers, and religious 
ties), it has historically had lackluster relations in the 
area.  GOI attention focuses on a few nations of particular 
importance to those interests, primarily Saudi Arabia, Iran, 
Iraq and more recently Israel.  While New Delhi is aware of 
the potential benefits from counter-terrorism cooperation 
with countries in the Gulf region, those ties are 
underdeveloped.  Analysts point to a lack of attention from 
top policy makers as a reason for India's nondescript foreign 
policy toward the Middle East.  End Summary. 
 
Strategic Interests in the Area 
------------------------------- 
 
2.  (C) India's strategic interests in the Middle East can be 
summarized as energy, citizens, trade, and religious ties. 
India imports 70% of its petroleum, with the Persian Gulf 
area supplying three quarters of those imports, as well as 
significant amounts of natural gas.  The Gulf is also home to 
3.5 million Indian nationals who provide skilled and 
unskilled labor, with 1.4 million in Saudi Arabia alone. 
Because these workers come from a few concentrated centers 
(Kerala and Maharashtra especially), they tend to have a 
disproportionate political impact, as illustrated by the 2004 
debate over Indian workers in Iraq.  India considers the 
Middle East, particularly Gulf countries, as a natural export 
destination, stemming from historical patterns of commerce 
under the British raj and before.  Finally, the world's 
second largest Muslim population and second largest Shia 
population give India strong cultural ties to Saudi Arabia 
(India supplies the second-highest number of Haj pilgrims 
annually) as well as Iraq and Iran (with their Shia holy 
sites). 
 
3.  (C) The importance of New Delhi's relationships with each 
of the countries listed in Ref A can be determined by the 
degree to which the above factors enter into the mix.  Saudi 
Arabia, Iran, Iraq, Kuwait, the UAE, and Oman are most 
prominent with respect to energy, trade, expatriate Indians, 
and religious significance.  India's relations with Egypt, 
Syria, Yemen, Libya, Bahrain and Qatar are of less 
significance (although relations with Qatar are growing, 
driven by Qatari exports of liquefied natural gas).  While 
energy needs drive relations with Iran, Saudi Arabia, Kuwait 
and Iraq, protection of overseas citizens is a primary 
consideration with respect to Oman and the UAE (where 
commerce is also significant), and is a strong consideration 
with Saudi Arabia and Kuwait.  The exceptions to this rule 
are Israel, with whom India maintains a significant defense 
and technology relationship, and the Palestinian Authority, 
support for which has been a point of domestic pride and 
politics due to India's NAM background and large Muslim 
population.  Ref G provides further details on India's 
relations with and general lack of coherent policy towards 
the Gulf countries. 
 
Saudi Arabia: Oil, Trade, and CT 
-------------------------------- 
 
4.  (C) Saudi Arabia dominates Indian attention in the Gulf 
due to its prominence in the areas of energy, Indian 
expatriates, and trade.  In a conversation with PolCouns and 
Poloff on December 6, MEA Joint Secretary (Gulf) Sanjay Singh 
could not confirm reports that King Abdullah would be the 
chief guest at India's January 26 Republic Day celebration 
(Ref C), although the visit is now widely known in the press 
and political circles.  However, drawing statistics easily 
from memory, he emphasized that Saudi Arabia, in addition to 
providing one quarter of India's oil imports, is an important 
partner in other trade.  India is Saudi Arabia's 4th largest 
trading partner, while the Kingdom is India's 13th largest, 
and the nations count approximately 150 direct investment 
projects between them, about half in each direction.  India 
has strong population ties too, he added, noting that 10% - 
12% of the Kingdom's resident population is Indian, and the 
20% Muslim population of India is "strongly affected" by 
events in Saudi Arabia.  India's focus of interaction with 
Saudi Arabia is the Muslim business community in Mumbai, he 
noted, confirming our own impressions from interactions with 
prosperous traders and professionals there. 
 
5.  (C) Corroborating the rumors of a King Abdullah visit in 
January, well-connected columnist and commentator Saeed Naqvi 
told PolCouns and Poloff on December 7 that India has been 
pursuing a high-level Saudi royal visitor for thirty years, 
but had previously been unsuccessful "at any level."  The 
change of heart, he suggested, was a result of US pressure on 
the Saudis to moderate their image.  The Kingdom is "telling 
us they've changed," Naqvi continued, and that they are not 
the same people who supported Pakistan's Zia ul-Haq against 
India, but are now more interested in normal ties with 
now-nuclear India. 
 
6.  (C) The GOI and KSA interact on terrorism as part of 
their political relationship, Singh said.  India attended the 
Saudi-organized counter-terrorism conference in 2004, and 
welcomes the Saudi proposals for a regional counter-terrorism 
center.  When pressed on whether New Delhi and Riyadh 
cooperate operationally on counter-terrorism or terrorist 
finance, he remarked that the GOI is working on strengthening 
institutional linkages to combat crime generally, adding that 
crime and terrorism are not divisible. 
Iraq 
---- 
 
7.  (C) India has traditionally been a large purchaser of 
Iraqi oil, and would like to renew its relations with the new 
Iraqi government in order to resume that role (Ref B). 
Additionally, New Delhi recognizes that stability and 
development in Iraq will be necessary to ensure stability in 
the Gulf region, essential for protecting Indian citizens in 
the area and the USD 6 billion in annual remittances they 
provide. 
 
Other Countries 
--------------- 
 
8.  (C) The UAE, in particular Dubai, is a strong focus of 
Indian business relations in the Gulf, and much shipping from 
Mumbai transits Dubai.  J/S Singh noted that trade with Dubai 
is expected to reach USD 8 billion this year, running only 
slightly behind the volume of trade with China in recent 
years.  Dubai also accounts for a large proportion of 
criminal links between India and the Middle East.  The GOI 
has consistently drawn attention to the fact that its 
most-wanted terrorist/mafioso Dawood Ibrahim frequents Dubai 
and runs his operations from there, a status highlighted by 
the lavish wedding reception thrown for Ibrahim's daughter in 
Dubai in July (Ref F).  Although Kuwait is also a fairly 
important source of oil, relations with it and the other 
nations noted in Ref A are lackluster, and generate little 
interest or news among New Delhi policy-makers and pundits. 
 
9.  (C) Post reported on Indian interests in Iran in Ref E, 
and its weak relations with Syria in Ref D.  Media reports 
have recently indicated that India's ONGC and China's CNPC 
have agreed to bid on a stake in the Al Furat oil and gas 
venture in Syria (Ref H).  However, the choice of Syria may 
indicate more its marginal importance as a source of oil, as 
it appears to be a test case for India-China cooperation, 
deliberately situated away from the more cut-throat 
competition between India and China for control of energy 
supplies in areas such as Sudan and Central Asia. 
 
Relations with the OIC 
---------------------- 
 
10.  (C) J/S Singh dismissed the idea that India maintained 
hope to join the Organization of the Islamic Conference 
(OIC), explaining that since Pakistan "hijacked" the OIC to 
use it to condemn India, other nations have begun to use it 
in the same way.  The OIC has been a "reactive talk shop," he 
continued, and does not generate serious ideas.  If Pakistan 
were to change its views of India's participation, the first 
"straws in the wind" would be the grant of MFN trade status 
to India.  Until then, Singh commented, there will be no 
chance of Indian participation.  He admitted, however, that 
New Delhi sees signs that Saudi Arabia and Malaysia are 
beginning to "reappraise" the role of the OIC in the Muslim 
Ummah, and could reform the OIC to be more relevant.  In that 
case, he continued, the OIC may be willing to look at the 
example of democratic and secular India, where Muslims "do 
well," despite being in the minority, and where there is 
little enticement to fundamentalism or radicalism. 
 
Counter-terrorism 
----------------- 
 
11.  (C) In addition to the GOI's inclusion of 
counter-terrorism as a subject for discussion with Saudi 
counterparts (above), New Delhi participates in a 
counter-terrorism working group with Israel, and signed a 
Joint Declaration in 2003 on combating international 
terrorism with (of all countries) Iran.  We have no 
information on how substantial any of these interactions are. 
 Also notable in this regard is the May 2005 meeting between 
Middle East Envoy Chinmaya Gharekhan and Iraq's National 
Security Advisor (Ref I).  Gharekhan and other Indian 
officials told us that the GOI is focused on the emerging 
links between Lashkar-e-Taiba and jihadists active in Iraq, 
and is looking to build an intelligence relationship with 
Iraq. 
 
Weak Personalities 
------------------ 
 
12.  (S) Responsibility for India's policies in the Gulf and 
West Asia are shared among Minister of State for External 
Affairs E Ahamed, West Asia Envoy Gharekhan, Secretary (West) 
Rajiv Sikri, and J/S Sanjay Singh.  Columnist Saeed Naqvi 
told us, however, that high level policy suffers from an 
inability to concentrate on more than a few key 
relationships, namely Pakistan, China and the US.  Thus, he 
complained, few people pay attention to the Middle East. 
Foreign Secretary Saran is preoccupied with the US and Nepal, 
leaving "lots of gaps," and Gharekhan cannot fill that vacuum 
because of his "limited presence," Naqvi continued - "He is 
not able to make an impact."  Former FM Natwar Singh's 
primary interest in the Middle East was advocacy of 
Palestinian interests to keep the Congress Party's Muslim 
vote bloc happy, and he did not significantly change New 
Delhi's approach to the region. 
 
13.  (S) Naqvi was similarly critical of Ahamed, a Minister 
of State who represents the UPA coalition minor partner 
Muslim League Kerala State Committee.  Ahamed is "fixated on 
Saudi Arabia," Naqvi said, attributing it to the perspective 
from his constituency near Calicut, the source of many 
migrant workers in the Gulf.  Saudi ties in that region 
include trade, labor, Haj pilgrimages, and funding for 
madrasas - a factor that Naqvi identified in areas in Tamil 
Nadu, Mumbai and Bihar as well.  However, because of his 
parochial outlook, Ahamed does not understand the larger 
issues, Naqvi complained.  Nevertheless, he is well received 
in Saudi Arabia and has met King Abdullah several times. 
Ahamed will claim the January 26 royal visit as his own 
success, Naqvi predicted, complicating matters for PM 
Manmohan Singh, who would prefer to ease him out of the MEA 
and appoint a more capable successor. 
 
Comment: Still a Blind Spot in Foreign Relations 
--------------------------------------------- --- 
 
14.  (C) Despite recognition that India's interests in the 
Gulf and Middle East are substantial (Ref G), New Delhi has 
not shown the capability to formulate its Middle East policy 
in a comprehensive way, and the complicated domestic politics 
of India's Muslim minority mitigate against policy 
innovation.  By most estimates, the last major breakthrough 
in Indian policy towards the Middle East came in the early 
1990s, when then-Foreign Secretary JN Dixit engineered the 
expansion of relations with Israel.  A new breakthrough came 
in 2003, with the NDA's serious consideration of a major 
troop deployment to Iraq, but that move was scuttled by 
domestic considerations and looming national elections, 
proving again the Muslim overlay in India's approach to the 
Gulf.  In the absence of a comprehensive policy, individual 
issues such as energy security or citizen protection may rise 
to the attention of the top levels of government from time to 
time and demand a response.  The turmoil surrounding India's 
IAEA vote on Iran, intertwined with the ongoing negotiations 
for the Iran-Pakistan-India gas pipeline and LNG supply 
contracts, forced the Delhi strategic community to debate 
India's comprehensive interests in the Middle East and the 
world.  New Delhi's decision in that case to advance its 
broader strategic interests with America, instead of simply 
following the path of least resistance for energy supplies, 
is a signal of more far-sighted thinking regarding the 
region.  Whether the GOI continues to develop its thinking on 
broad and long-term interests in the Middle East may hinge in 
part on the interests and capabilities of the next Foreign 
Minister. 
 
15.  (U) Visit New Delhi's Classified Website: 
(http://www.state.sgov.gov/p/sa/newdelhi/) 
MINIMIZE CONSIDERED 
MULFORD