INDIA PONDERS NEW IRANIAN PRESIDENT

C O N F I D E N T I A L NEW DELHI 004862

SIPDIS

E.O. 12958: DECL: 06/26/2015
TAGS: PREL IN IR
SUBJECT: INDIA PONDERS NEW IRANIAN PRESIDENT

REF: 04 NEW DELHI 2556

Classified By: Charge Bob Blake for Reasons 1.4 (B, D)


1. (C) Indian foreign policy watchers predict that the June
25 Iranian presidential election outcome will upset the
equilibrium in India's balancing act between its energy and
trade interests in Iran and its growing strategic partnership
with Washington. New Delhi's improved ties with Tehran in
recent years had been based on Iran's status as India's
gateway to central Asia and a potential energy supplier, but
were buttressed by the GOI's conviction that its engagement
would help to moderate Tehran's policies (Reftel). The
ascent of a hard-liner to the presidency is causing
apprehension among Indian strategists who fear that renewed
tensions between Tehran and Washington could have a negative
impact on India's Iran policy.


2. (C) In a meeting with visiting S/P Director Stephen
Krasner held before the presidential runoff, MEA Joint
Secretary (Pakistan, Afghanistan, Iran) Dilip Sinha defended

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India's current policy of engagement with Iran, noting that
Iran had "moved considerably" from its most problematic
stances over the past 7-8 years. He admitted that Iran was
not changing as fast as the US would like, but said its
overall progress was "useful," and that Iran's funding of
terrorist organizations had declined over the decade. Sinha
did not expect a change in Indian policy whatever the outcome
of the runoff election.


3. (U) Prominent strategic affairs analyst C Raja Mohan
speculated in the June 26 "Indian Express" that Ahmadinejad's
election could "utterly complicate" India's balancing act
between Iran and the US. India had so far managed to keep
its diplomatic relations with Tehran and Washington separate,
but the burgeoning energy relationship with Iran and defense
exchanges were becoming "issues of concern" to the US. The
ascent of a fundamentalist like Ahmadinejad would make it
more difficult for New Delhi to insulate its Iran policy from
its high-priority engagement with the US.


4. (C) Although the June 27 "Telegraph" quoted "Indian
diplomats" that GOI policy would be unaffected by
Ahmadinejad's victory, C Uday Bhaskar, Acting Director of the
government-funded Institute for Defense Studies and Analyses,
disagreed with these predictions, telling Poloff on June 27
that increased tension in the US-Iran relationship would pose
significant foreign policy challenges for New Delhi. In
private, the MEA will admit that it is worried, he said, and
the GOI will be "closely monitoring" the new government in
Tehran, but it was too early yet for real concern.

Comment
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5. (C) New Delhi sees its energy links to Iran as essential,
and is eager to avoid clashes with the US over Iran that
would upset either relationship. While hoping that its
increasing economic engagement will not trigger ILSA
sanctions, the GOI recognizes that Iran is one of the
"problem children" in the US-India bilateral relationship,
and is likely to seek to use its influence with Iran to avoid
a flare-up of tensions with the US, including continuing to
encourage Iran to cooperate with the IAEA and EU-3
interlocutors on nuclear matters.
BLAKE