1. (U) Summary: The GOI used a recent visit by IAEA
Director General Dr. Mohammed El Baradei to press its case
for reform of Nuclear Suppliers Group (NSG) requirements to
facilitate India's cooperation with others in the
international community in using nuclear power to fill the
country's growing energy needs. In Delhi, El Baradei met
with NSA Dixit, FS Saran and other MEA officials with whom he
also discussed Iran, and proliferation. In Mumbai, he met
with India's civilian nuclear establishment. According to
our MEA contacts, the IAEA DG indicated that India's
engagement with the US is crucial to its hopes for enhanced
international nuclear cooperation, and in this context
welcomed recent progress on the NSSP. End Summary.

Full-Scope Safeguards: US in the Driver's Seat


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2. (C) In a November 18 meeting with PolCouns and PolOff,
MEA Deputy Secretary (Disarmament and International Security)
Naveen Srivastava reported that in both his keynote speech to
Indian scientists and in meetings with GOI officials, El
Baradei stressed the role of the IAEA in promoting access to
nuclear technology for peaceful purposes, an objective that
is especially critical for rapidly expanding economies such
as India and China. In meetings with the IAEA DG, GOI
officials pressed for "positive discrimination" to enable
India to safely develop its nuclear power program in order to
meet its energy requirements while addressing global concern
about greenhouse gases. El Baradei agreed that nuclear power
should be a larger percentage of India's energy mix, i.e.,
increasing from 3.4% to 25% of India's energy sources.
PolCouns queried whether GOI officials asked El Baradei about
options for reconciling this goal with the NSG's full-scope
safeguards requirement. Srivastava confirmed that they had,
but El Baradei referred them back to the USG. The Indian
media note on the visit said the GOI "emphasized that while
there is a need to address the emerging concerns about
proliferation...this should not impede the fullest use of
nuclear energy by states with a proven record of safety and
responsibility, such as India whose record in this regard was
second to none."

El Baradei Believes Security Drives the Iran Program


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3. (C) On Iran, El Baradei told GOI officials that he
believes security is best addressed "by partnerships (between
countries), not dominance." He prefers to continue to engage
Iran rather than refer the matter to the UN Security Council.
Because Iran is surrounded by hostile neighbors, the IAEA
chief said that he believes Iran's nuclear objectives are
based primarily on its security concerns and that its energy
requirements are secondary. The Indians reaffirmed their
view that Iran should comply with its NPT obligations, adding
that Iranian nuclear weaponization would be a threat to the
region.

State Support for Proliferators


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4. (C) Regarding proliferation, GOI officials raised their
concern about "the receiving side, not the supply side" of
the AQ Khan network. El Baradei outlined a network reaching
more than 20 states, including some Western countries.
According to Srivastava, the IAEA chief said he believed that
Libya's involvement in the network may have been limited to
one person, but contacts with the DPRK and Iran were more
extensive than that and would have required state support.
Adding his own comment, Srivastava stated that although El
Baradei was careful not to say that Pakistani, DPRK or
Iranian state structures were involved, "that is clearly what
he implied."

US Engagement Crucial to India's Civilian Nuclear Goals


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5. (C) El Baradei also told GOI officials that India's
engagement with the US was crucial to its hopes for enhanced
international nuclear cooperation. In this context, he was
pleased with the progress on the NSSP, according to
Srivastava. The Indians used the occasion to reaffirm their
strong commitment to maintaining "a pristine onward
proliferation record." In follow-up with PolCouns, MEA
Director (Disarmament and International Security) Venu
Rajamony confirmed New Delhi's recognition that Indo-US
cooperation on the reactor island would not be possible as
part of the first three phases of the NSSP, but would be a
GOI priority for later phases. PolCouns remarked that the
NSSP is moving rapidly, noting that Indian Ambassador Sen
optimistically hopes to conclude Phase Two by the end of the
year (reftel). PolCouns reiterated Washington's suggestion
that India look to Israel as an example of a country that has
benefited from stricter export controls because greater trust
in their business environment has resulted in more high-tech
trade. "But you haven't sanctioned them," Rajamony
countered, adding that the NSSP will help to build an
atmosphere of mutual trust between the US and India. He
remarked that NSSP issues will likely be addressed in the
upcoming India-Israel non-proliferation dialogue.
BLAKE