1. (C) SUMMARY: The Australian Department of Foreign
Affairs and Trade (DFAT) hosted a Senior Officials Meeting
(SOM) and a strategic dialogue with India March 7-8. The
SOM's principal topics were the promotion of bilateral
economic ties and Australian support for India's bid for
permanent UNSC membership. The Australians told the Indian
delegation that Australia would publicly support an Indian
permanent seat; however, India would need to further
strengthen export controls before it could count on the GOA's
vote. India also announced that New Delhi and Tokyo had
swapped pledges of support for Security Council permanent
membership. Overall, the Australians thought the strategic
dialogue elicited more rhetoric than substance from the
Indians, whose delegation members struck an ideological tone,
speaking like "old Moscow hands." Indian officials repeated
familiar stances on nonproliferation, Iran, and Pakistan, but
did emphasize that they wanted to expand their economic
relationship with China. India also expressed interest in
joining the Proliferation Security Initiative, but only as an
"equal partner." End Summary.



2. (C) Australia consecutively hosted a Senior Officials
Meeting and a strategic dialogue with India March 7 and 8,
respectively, in Canberra. Rajiv Sikri, Secretary (East) for
the Ministry of External Affairs (MEA), headed the Indian
delegation, which also included the Indian High Commissioner
and the Consul General from Sydney. DFAT Secretary Michael
L'Estrange led the Australian SOM delegation and opened the
strategic dialogue which Deputy Secretary Nick Warner then
took over. Poloff received readouts on both the SOM and the
strategic dialogue from DFAT officials.



3. (C) Two Joint Working Groups (JWG), one on
Counterterrorism and Immigration and one on Defense, also met
on March 7 in preparation for the next day's strategic
dialogue. According to DFAT, the two working groups
discussed but reached no firm decisions on holding seminars
in Southeast Asia on religious extremism and on managing
diversity within a democratic framework. In the CT and
Immigration JWG, the Australian and Indian delegations agreed
that Bangladesh was becoming a country of increasing concern
due to its weak economy and "expanding Muslim population."
The Australians proposed establishing a third JWG on
nonproliferation, which the Indian delegation said it would
consider.

SENIOR OFFICIALS MEETING


--------------------------




4. (C) The March 7 Senior Officials Meeting was held at the
Secretary of Department level (U.S. Deputy

SIPDIS
Secretary-equivalent). Australian officials gave us an

SIPDIS
overview of the varied agenda that included trade, energy,
education, tourism, UNSC reforms, and ASEAN. DFAT India and
South Asia Section Director Peter Howarth said the SOM
underscored Australia's new effort to improve its
relationship with India, particularly in trade. He noted
that India was now Australia's 6th largest merchandise export
market and two-way investment was substantial. During the
SOM, the GOA informed the Indian delegation that Australia
would publicly support India's bid for permanent membership
on the UN Security Council. Indian officials requested that
Australia also talk up India's membership with South Pacific
nations, which would have several votes to cast on the UNSC
issue.



5. (C) Commenting on ASEAN developments, the Indian
delegation noted that Indonesia was reemerging as a key
player in Southeast Asia and acknowledged that India wanted
to be invited to the East Asia Summit. The delegation stated
that the region needed to manage China's expanding political
and economic influence, even though India also saw the
Chinese market as an opportunity. In that regard, Indian
officials informed the Australians that Chinese Premier Wen
Jiabao would visit India soon. (NOTE: Chinese and Indian
online news sources reported that the purpose of Wen's visit
would be to "enhance bilateral ties to strategic levels" and
seek a fair resolution to the longstanding boundary issue on
the basis of "mutual accommodation and accommodation of
reality." End Note.)



6. (C) The Indian delegation also briefed the Australians on
the potential development of an Iran-Pakistan-India energy
pipeline to bring liquefied natural gas (LNG) through the
three countries. Although the Indian and Iranian energy and
petroleum ministers had met recently in India to discuss the
proposal, Indian officials said their Foreign Minister was
not very interested in pursuing the project given the
political considerations and security risks involved. GOI
officials asserted that Pakistan had a "terrorism
infrastructure" that Islamabad had to dismantle. Indian
officials also highlighted their concern that 70% of their
energy came from the Gulf Region.



7. (C) The two sides also discussed visas and tourism issues
in the context of the high numbers of Indian visitors to
Australia. According to DFAT, India was Australia's third
largest source of foreign students in its tertiary
educational institutions. Indians were also the largest
recipients, by nation, of Temporary Business Entry visas for
information and communications technology professionals, with
a 94% approval rate. Overall, 50,000 Indians arrived in
Australia every year on various types of visas.

STRATEGIC DIALOGUE


--------------------------




8. (C) In the strategic dialogue that followed the SOM, the
delegations found a common perspective on counterterrorism,
but differed on other issues such as Iran's nuclear program.
Australian officials told us they were disappointed that the
Indians had resorted to "old-time rhetoric" on
nonproliferation, Iran, and Pakistan.

NONPROLIFERATION


--------------------------




9. (C) The Indians trumpeted New Delhi's work on export
controls, noting that it was a difficult challenge because of
the many interested agencies in the Indian system. GOI
officials emphasized to the Australians that although India
was located in an "arc of proliferation," India itself was
not a proliferator. India said it had stayed out of the
Nuclear Nonproliferation Treaty because of "security
compulsions" emanating from within its own region. The
Indian delegation expressed concern about weapons transfers
from China to Pakistan, and subsequently to Libya and North
Korea. Indian officials declared that they were willing to
join the Proliferation Security Initiative, but only as an
equal partner. They indicated that they would either join
the core group or join as an equal member once the core group
had been disbanded.

UNSC REFORM


--------------------------




10. (C) The GOI delegation announced that New Delhi had
swapped pledges of support for Security Council permanent
membership with Tokyo under the proposed UN reforms. India
believed it had met all the requirements for membership. GOA
officials told the Indians that, although Australia would
support India's UNSC bid publicly as promised at the SOM,
India would need to strengthen its export controls further
before it becomes a permanent member.

CHINA


--------------------------




11. (C) The Indian delegation stressed again that India
wanted to improve its relationship with China, noting that
there were "growing points of convergence in the
relationship." The delegation added that the two countries
were trying to put aside differences for the sake of broader
interests such as economic cooperation. Indian officials
pointed out that China was their fastest growing economic
partner. Nonetheless, they wondered whether China could
sustain its pace of growth without antagonizing the region or
others in the international community and whether the PRC
economic system could handle the growth without the
modernization of its political system. The GOI delegation
believed China needed to be more significantly "factored into
the calculations" of the First World across the spectrum of
political, economic, and security issues. At one point,
Indian representatives described China and India as being "at
the center of the universe," noting that the two countries
had the world's biggest populations and that India
historically had been one of the two biggest economies in the
world. It seemed clear to GOA officials that India was keen
to expand its economic ties with China and that the
development of ties between New Delhi and Beijing would bear
watching.



12. (C) At the same time, the Indian delegation claimed New
Delhi also wanted to have a better relationship with Japan
and talked about "discovering" Japan as a new ally. Indian
officials said they had established a security dialogue with
Japan and had formed a joint study group for trade and
economic relations.

IRAN


--------------------------




13. (C) The GOI urged Australia not to support efforts to
bring the issue of Iranian nuclear weapons to the UN Security
Council. New Delhi's desire was to keep the EU3 dialogue
open in the hope that a resolution would come through that
process. The GOI delegation added that military action would
inflame the whole region and that there should be moderation
in maintaining the EU3-Iran dialogue. Indian officials also
suggested that Australia and others were trying to hold Iran
accountable for not meeting voluntary NPT requirements rather
than legal NPT obligations. Iran should be "treated fairly
and not singled out," they said.

PAKISTAN


--------------------------




14. (C) The Indian delegation characterized Pakistan as
exporting terrorism to the region and accused the
international community of being too soft on Islamabad, thus
only encouraging Pakistan to behave badly. India had been
suffering from terrorism for years, officials noted, but only
now was terrorism seen as a major problem because the West
was targeted. One Indian official asked rhetorically, "Why
is Bali any worse than Bombay?" The Indians argued that work
against extremism should not target just Muslims because
there were Jewish and Christian extremists as well.

OTHER BILATERALS


--------------------------




15. (C) According to DFAT, in May Australia would hold the
next rounds of continuing strategic dialogues with Indonesia,
Japan, South Korea, and Vietnam, and hopefully a first round
with Malaysia if the two capitals could agree on dates.

COMMENT


--------------------------




16. (C) Australia's strategic dialogue with India did not
address some obvious candidate topics such as missile
defense, the ASEAN Regional Forum, or the EU arms embargo on
China. DFAT officials expressed general frustration that the
Indian delegation seemed to be full of "old Moscow hands" who
preferred using "NAM rhetoric" over addressing the issues at
hand. Only one delegation member, MEA Additional Secretary
for International Security Meera Shankar, seemed interested
in addressing the specific agenda items. The majority of the
discussion was more "ideological," dominated by Indian
officials theorizing that the world was becoming more
multipolar and that U.S. dominance was transitory.

STANTON