C O N F I D E N T I A L SECTION 01 OF 02 NEW DELHI 007395

SIPDIS

E.O. 12958: DECL: 11/18/2104
TAGS: PREL PTER ENRG IN PK IR INDO PAK
SUBJECT: ONE YEAR INTO THE INDO-PAK CEASE-FIRE: OPEN-ENDED
TROOP WITHDRAWAL AND 98 PROPOSED CBMS

Classified By: PolCouns Geoff Pyatt, Reasons 1.4 (B,D)


1. (C) Summary: As India and Pakistan mark the one year
anniversary of their Line of Control (LOC) cease-fire in
Kashmir, more Indian troop redeployments and other Indo-Pak
progress are "only natural" if cross-border terrorism and
infiltration by Pakistan remain low, MEA Joint Secretary
(Pakistan, Afghanistan, Iran) Arun K. Singh told PolCouns and
Poloff on November 19. Singh remarked that the ongoing
redeployment provided President Musharraf with a clear
example of progress on Kashmir to cite to his domestic
critics. He insisted that PM Manmohan Singh's recent public
statements precluding redrawing borders or religious
partition defined the parameters for progress in Kashmir.
Singh also indicated a more flexible position on an
Iran-Pakistan-India gas pipeline as part of a "wide trade
context" for energy relations by declaring that Pakistani MFN
status for India would be welcome but not mandatory. End
Summary.

Kashmir
--------------


2. (C) The PM's recent statements precluding redrawing
Kashmir's borders or partitioning along religious lines
authoritatively enunciated India's parameters for any future
progress on Kashmir, according to Singh. He characterized
the recent troop redeployment as an example of progress on
Kashmir that Musharraf can cite to domestic critics.
Although the recent troop redeployment announced prior to the
PM's visit to Kashmir was a one time plan, Singh said it was
"only natural" to expect more such progress down the line.
If infiltration remains low, he suggested, the logic of the
PM's declaration suggests that India can withdraw more
troops. He said the onus was on Pakistan now to continue the
process of ultimately ending infiltration, without which
there would be "no reason" for troops to remain. Singh
agreed that the one-year anniversary of the LOC cease-fire
was significant, commenting that the Composite Dialogue could
continue "indefinitely" provided there is no increase in
infiltration or major terrorist event.


3. (C) Responding to our characterization of Pakistani
Ambassador Aziz is an "ally" in the Indo-Pak process, Singh
said he was not confident in Aziz or the GOP MFA generally,
labeling it as "more conservative" than the army. Regarding
the All-Parties Hurriyat Conference (APHC), Singh said
Pakistan "overplayed its hand just like they did with the
Taliban." The Joint Secretary remarked that the GOI had given
the Hurriyat "a long rope which has now reached the tension
point" and "one more tug will break" it.


4. (C) Singh shared with PolCouns (septel) a list of 98
suggestions India put forward for Indo-Pak cooperation, which
also indicates areas of Pakistani inaction or delay. He
stated that 13 CBMs were agreed, India has enacted 20
unilaterally, 20 are under discussion, and that Islamabad has
not responded to the rest.

Srinagar-Muzaffarabad Bus
--------------


5. (C) Singh argued that the wrangling over permissible
documents to enable travel across the LOC was a convenient
excuse used by Pakistan to delay the opening of the
Srinagar-Muzaffarabad bus route. He cited various groups,
including Kashmiri journalists, who already travel across the
border with standard passports and visas to argue that
nothing else was necessary. He denied plans for any
alternative document.

Pipeline
--------------


6. (C) Singh indicated new flexibility in the GOI position
on the Iran-Pakistan-India gas pipeline, specifically stating
that the GOI no longer will require that Islamabad grant New
Delhi MFN status in exchange for a pipeline deal. He
reiterated India's requirements that the pipeline be part of
a wider trade agreement, must be secure, and that Pakistan
must give assurances of reliable gas supplies to India. The
GOI would welcome MFN status but would be satisfied if
Pakistan makes adequate trade concessions elsewhere, such as
additional products on the positive list for import from
India.

Baglihar Dam
--------------


7. (C) Characterizing a "Dawn" article stating that India
would complete the Baglihar Dam by April 2005 as "hype",
Singh said he expected the dam to be completed no earlier
than 2008. In response to Pakistan's opposition of the
project, Singh said the GOI had asked for "substantive
objections" and had not received any response.
BLAKE