FS SARAN PREPARES FOR WASHINGTON

C O N F I D E N T I A L SECTION 01 OF 03 NEW DELHI 003653

SIPDIS

FOR P, C, ACTING E WAYNE AND D/NSA CROUCH

E.O. 12958: DECL: 05/13/2015
TAGS: PREL KNNP KDEM ETTC MASS NP CH IZ IN US
SUBJECT: FS SARAN PREPARES FOR WASHINGTON

REF: NEW DELHI 03646

Classified By: Charge Robert O. Blake, Jr., for Reasons 1.4 (B, D)


1. (C) Summary. In a May 14 meeting with the Charge, Foreign
Secretary Shyam Saran gave an optimistic overview of the

SIPDIS
issues for his upcoming trip to Washington, emphasizing the
GOI's intention to develop a rich menu of deliverables to
make the Prime Minister's July White House visit "a defining
moment in our relationship". One day after the passage of
GOI export control legislation (which Saran called "my most
difficult exercise in 35 years") the Foreign Secretary
underlined the Indian resolve to complete the remaining NSSP
requirements before the PM's visit. The GOI has committed
USD 5 million to the UN Democracy Fund, but is waiting for
the account to become operational and believes the ball is in
the UN's court. On the PM's recent meeting with Putin in
Moscow, Saran was encouraged by the Russian President's
willingness to reconsider nuclear fuel and additional
reactors for India. Briefing the Charge at length on Nepal,
Saran expressed concern about Maoist threats and RNA abuses
leading to increased Nepali migration into India, as well as
the reported Chinese intention to provide ammunition to the
RNA, which India will protest. He argued that the RNA
currently has "sufficient" supplies of ammunition. End
Summary.

Export Control Legislation and the Steps Ahead



2. (C) The Charge congratulated Saran on the GOI's quick
passage of the "WMD and their Delivery Systems Bill", which
Saran called his "most difficult exercise in 35 years" of
government service. Saran was sensitive to a question about
when the GOI would promulgate revised control lists, and
stressed that the US needs to have patience. He added that
any public perception of pressure coming from the US would be
the "kiss of death", and noted that this process must be
managed and packaged carefully in order for India's coalition
government and a "skeptical Parliament" to be comfortable
with these rapid changes. Saran did however affirm that the
roadmap is clear and that the GOI is committed to fulfilling
all NSSP requirements (including control lists) before the
PM's visit to Washington. He later added that work is well
under way on the control lists, noting that there is
consensus within the GOI "on the need to get NSSP out of the
way". Compared to the export control law, Saran said, the
remaining NSSP requirements are relatively modest tasks that
can be accomplished through executive decree.

Working Group Preparation



3. (C) With Manmohan Singh focused on his upcoming trip,
Saran is committed to using his time in Washington to make
the PM's visit a "defining moment" in US-India relations,
adding that "I hope we will be able to come up with a
meaningful package". The Charge suggested that Saran lay the
groundwork for all the key working groups to hold their first
meetings before the PM's visit. In response to the GOI
suggestion for a Space Working Group meeting on May 23 and
24th, the Charge explained that US technical agencies can
meet on these dates only by DVC. (Mission will follow-up on
May 16 to seek GOI concurrence.) Saran agreed broadly with
our concept of five tracks for the Energy Dialogue and hoped
that Montek Singh Alhuwalia's visit to the US in late May
would provide a mandate to the working groups to generate
some deliverables before the July PM visit. With the goal of
holding the CEO Forum during or just before the PM's visit,
the Indians have refined their composition and requested
initiative from the White House to energize the forum and
recruit top CEOs. The Charge assured him that the US has a
strong candidate list that the Ambassador will review soon to
make recommendations to Washington. The Charge also noted
acting Undersecretary Tony Wayne's interest in meeting the
Foreign Secretary on economic issues. Saran was open to this
possibility and instructed his staff to look into scheduling
possibilities.

UN Democracy Fund and Iraq Reconstruction: Waiting to
Contribute



4. (C) The Charge highlighted the symbolic importance of
India's inaugural contribution to the UN Democracy Fund.
Saran explained that the GOI had pledged USD 5 million last
November which could be used for the Iraq election and
training electoral officers, but understood the fund was not
yet operational. The GOI is currently awaiting instructions
from the UN on how to donate the money. Saran suggested that
PM Singh make a statement about the contribution during his
White House visit, highlighting India's commitment to
democratic principles. He agreed with PolCouns that the
Foreign Secretary's late May visit to New York provided an
opportunity to catalyze the process of making this fund
operational and underlined India's support for the
Administration's emphasis on global democracy. The Charge
expressed his satisfaction with the PM's renewed offer of
assistance to Iraq and suggested that India's many eminent
jurists could provide constitutional expertise. Saran
responded that the GOI is waiting for a request from the
Iraqi government, which may come when GOI Special Envoy for
West Asia and the Middle East Peace Process Chinmaya
Gharekhan visits Iraq May 22-25. Gharekhan may also offer
Iraqi diplomatic and civil service training in India.
Embassy will seek an appointment with Gharekhan prior to his
departure.

Russian Nuclear Cooperation Looks Encouraging



5. (C) Charge sought a readout on PM Singh's talks with
President Putin on nuclear issues. Saran replied that
although Russia has not yet changed its view regarding NSG
constraints on the Indian requests for nuclear fuel and
additional nuclear reactors for the Koodankulam facility,
Putin promised to give the issue his "individual attention."
The Indians expect the Russians to work with the NSG to see
if it is possible to achieve some flexibility in the current
restrictions on civil nuclear transfers to India. Saran
stressed the GOI's long term plan to use nuclear power to
meet 25% of India's energy demands. He was "pleasantly
surprised" about the "encouraging response" the GOI heard at
last November's EU Summit at the Hague and said a less
restrictive international environment would help India meet
its energy needs. He also took encouragement from President
Bush's public emphasis on the revival of nuclear energy
options.

Nepal: Working Closely Amid Increased Concerns



6. (C) Saran briefed the Charge at length about GOI concerns
regarding increased Nepali migration into India as a result
of RNA human rights abuses and Maoist threats. According to
Saran, the exodus from Nepal to the Indian states of
Uttaranchal and Uttar Pradesh is growing as migrant laborers
who used to commute back and forth across the border are
joining their families in India. As more and more Nepalis
settle in India, Saran worried that "India's safety valve
will not be enough". The migration is having a major impact
on both countries and leaving the mid-west hill area of Nepal
a land of "deserted villages". Increases in unemployment, the
closure of industries, and decreases in tourism will cause
the Nepali economy to come to a halt, further destabilizing
the political situation. He welcomed the unity of the
political parties and their platform as a "good basis for
beginning talks", adding that there is "no reason for the
King not to invite the parties into talks". Saran speculated
that without engagement from the King, at some point the
"temptation (for the political parties) to join the Maoists
will be irresistible".


7. (C) Saran also flagged concern about GOI reports that the
Chinese company Norinco has agreed to supply the RNA with
ammunition. If true, this development contradicts the
assurances offered by the Chinese Foreign Minister that the
PRC will not provide arms to Nepal. If China supplies the
RNA, this will "complicate" the political situation. He
raised the GOI's intention to protest the Chinese offer and
indicated New Delhi would also raise this issue with the GON.
Recalling the GOI decision to release non-lethal supplies
(reftel),Saran said the only equipment to be provided for
now were vehicles held on the border on February 1, night
vision devices stored at he Indian Embassy in Kathmandu, and
non-lethal material like body armor and barbed wire. He
agreed with the Charge on the need to share assessments of
RNA ammunition supply shortages, but commented that current
RNA supplies are "sufficient". The Charge thanked Saran for
his assessments and promised to continue working closely with
the GOI to pressure the King and the parties back toward
democracy.
BLAKE