GOI PUBLICLY ACKNOWLEDGES PROGRESS ON NSSP,

C O N F I D E N T I A L SECTION 01 OF 02 NEW DELHI 008266

SIPDIS

COMMERCE FOR MATT BORMAN

E.O. 12958: DECL: 12/30/2014
TAGS: ETTC PREL PGOV IN NSSP
SUBJECT: GOI PUBLICLY ACKNOWLEDGES PROGRESS ON NSSP,
REAFFIRMS NON-DIVERSION ASSURANCES


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


1. (C) Summary: Foreign Minister Natwar Singh publicly
acknowledged during a December 22 Parliamentary debate with
former FM Yashwant Sinha that India had agreed to
non-diversion and end-use verification of US high technology
imports, even when they come from a third country. This is a
clear sign that the United Progressive Alliance (UPA)
government is serious about the India/US strategic
partnership and the export control understandings attached to
the Next Steps in the Strategic Partnership (NSSP). The
exchange received almost no press coverage in India,
illustrating that interest in the NSSP process is largely
confined to Indian elites. End Summary.


2. (U) On December 22, in the waning days of the Winter
Session of Parliament, Foreign Minister Natwar Singh made a
lengthy statement on India's foreign policy. Singh noted
that Indo/US relations "have expanded across the board," and
in this context observed that "It was the UPA Government
which concluded the long pending first phase of the NSSP."
He detailed that "the agreement makes US Licensing Policy and
procedures both transparent and predictable. End-use
verification is a consultative process to be undertaken by
mutual consent. This is an agreement between equals. It is
reflective of the strategic partnership that the two
countries wish to promote. It is the first in a series of
steps to build mutual confidence and trust, leading to
progressively higher levels of interaction in high technology
areas." Former Foreign Minister Yashwant Sinha jumped on
this exchange regarding the NSSP to press the issue of third
countries, leading FM Singh to acknowledge publicly for the
first time that India was committed to end-use verification
for American high technology items, whether imported directly
from the US or from other countries.


3. (U) Sinha noted to FM Singh that, "I had raised a very
specific issue about NSSP when I talked about end-use
verification. I am giving him an opportunity to contradict
me that US origin items of dual use coming from third
countries will not be subjected to end-use verification as US
origin items coming directly from the US will. This is not
part of the agreement which had been reached in December,

2003. There was no agreement with regard to end-use
verification."


4. (U) The Foreign Minister replied that, "Under the NSSP,
the US-origin items, whether directly supplied to us from the
US or from any other source, will always be the basis of
negotiations. It would not have been tenable to exclude
US-origin goods or technology merely because they were
obtained from non-US sources. We ourselves would not accept
such a distinction with respect to Indian-made technology or
sensitive goods such as our software."


5. (C) MEA Joint Secretary (Americas) S. Jaishankar flagged
this exchange in his meeting with PolCouns and Pol-MilOff on
December 30. Jaishankar noted that FM Singh's line on
end-use verification of US origin items imported from third
countries was essentially the same as the policy of the
previous NDA government, e.g., protection of US dual-use
items is an extension of protection that the GOI seeks for
Indian produced dual-use items. This argument, however,
seemed to "thoroughly confound" Sinha and effectively ended
further discussion of the matter. Jaishankar went on to
recall that during his visit to the US in November, Commerce
U/S Juster had inquired what the GOI response would be should
this issue of non-diversion for goods from third countries
become a matter of public debate. Noting that his is the
first time this issue has been raised in a public forum,
Jaishankar reiterated that the GOI stands by its private
commitment to respect end-use restrictions even for US origin
dual-use items from third countries. "Our treatment of US
items is the same as our treatment of Indian items," he
concluded.

Comment
--------------


6. (C) FM Singh's statement was the first time that the GOI
publicly revealed the concessions it had made regarding
end-use verification under the NSSP, and indicates that the
UPA government is serious in upholding its NSSP obligations
and pushing the India/US relationship to a new level. It
came as no surprise that former FM Sinha, who was privy to
earlier rounds of NSSP negotiations, sought to use the
non-diversion agreement to charge the UPA government with
caving in to US demands. Singh's statement received almost
no press coverage in India, as public interest in the NSSP is
largely confined to Indian elites and technical specialists,
many of whom are still trying to understand the commitments
attached to the NSSP.
MULFORD