US-INDIA NON-PROLIFERATION DIALOGUE

C O N F I D E N T I A L SECTION 01 OF 06 NEW DELHI 004961

SIPDIS

E.O. 12958: DECL: 06/30/2015
TAGS: PREL KNNP PARM ETTC KSTC IR PK CH IN NSSP
SUBJECT: US-INDIA NON-PROLIFERATION DIALOGUE

REF: A. NEW DELHI 4719

B. NEW DELHI 4718

C. NEW DELHI 4717

D. NEW DELHI 4715

E. STATE 112244

F. NEW DELHI 3652

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


1. (C) Summary: Arms Control A/S Stephen Rademaker and
representatives from AC, NP, SA, OSD, and Embassy met GOI
counterparts, led by MEA Additional Secretary (International
Security) Meera Shankar on June 16 to continue the ongoing
bilateral dialogue on strategic stability and
nonproliferation issues. The following cable reports on the
nonproliferation session of the dialogue; strategic stability
issues will be reported septel. Topics included the NPT
Review Conference, DPRK, Iran, India's new WMD Act, questions
about NSG and MTCR adherence, the Proliferation Security
Initiative (PSI),nonproliferation amendments to the SUA
Convention, pending onward proliferation cases, and the
Tracker automated export control system. The talks were
candid and friendly, but Additional Secretary Meera Shankar
noted that the GOI needed to find its own way forward on
NSSP-required adherence to the NSG and MTCR. End Summary.


2. (U) Before launching into the lengthy agenda, Shankar
noted that the GOI was pleased with the "steady progress" on
many legacy issues as both countries "updated their
perceptions of the other," but observed "cautious progress"
toward new opportunities.

Review of NPT RevCon
--------------


3. (C) In her opening remarks, Shankar contrasted the
failures of the NPT with GOI nuclear policy based on
transparency, responsibility, predictability, and
self-defense. Despite being outside the NPT, Shankar stated
that India adheres to the principles of the NPT, has a
"pristine" record of nonproliferation, and wants to be a
partner in strengthening the NP regime. In addition, the GOI
shares US concerns about the "arc of proliferation from North
Korea in the east to Iran and Libya in the west." The only
way the NPT can be strengthened, however, she contended, is
through a "forward-looking process." Asked for his
assessment of the recently concluded Five Year Review
Conference, A/S Rademaker stated that the recent NPT RevCon
was not a failure because there was discussion of critical
issues such as Iran and DPRK compliance, although not
agreement on a final text. He attributed lack of agreement
on substantive issues to Egypt's intransigence on procedural
issues. Noting that three of six previous RevCons had not
produced an outcome document, he opined that real progress on
substantive nonproliferation issues could be made in other,
more effective fora in the future, such as the Nuclear
Suppliers Group and the PSI.

DPRK
--------------


4. (SBU) A/S Rademaker described the history of North
Korea's abuse of the NP regime and new efforts to resume the
Six-Party talks, buttressed by the international community's
consistent message urging Pyongyang to re-engage. Shankar
expressed GOI support for resumption of the Six-Party talks,
adding that the GOI would like the talks to address not only
the DPRK's nuclear program, but also proliferation linkages
which directly impact South Asia.

Iran
--------------


5. (C) Similar to North Korea in the 1990s, A/S Rademaker
explained, Iran had been caught "red-handed" in its nuclear
weapons development, and had compounded the problem with a
pattern of excuses, discrepancies, and intractability. The
EU3 had been optimistic that a solution may be found if
Rafsanjani were elected, but A/S Rademaker pointed out that
Rafsanjani was the Iranian President for 8 of the 18 years
that Iran had been in violation of IAEA rules. He went on to
ask the GOI to agree that Iran continue suspension of its
enrichment program, that Iran should negotiate with the EU3
on the objective guarantee of cessation and dismantling its
sensitive fuel cycle activities, and, failing these, that
India support reporting Iran to the UNSC.


6. (C) Shankar responded that the GOI encourages all
signatories to abide by their NPT obligations and encourages
Iran to cooperate with the IAEA and EU3, but asserted that
the US is asking Iran to go beyond its NPT obligations.
Recalling Iran's history of deception regarding the nature of
its program, A/S Rademaker replied that the US will not
accept "enhanced safeguards" as sufficient reassurance to
allow Iran to keep its sensitive fuel cycle capabilities.
Shankar responded that although India has close relations
with Iran and has a strong interest in resolving this crisis,
because of India's "semi-safeguarded" status, New Delhi would
be "in a difficult position" to convince Tehran to give up
its entire nuclear program.

AQ Khan Network
--------------


7. (C) Noting press reports that highly enriched uranium
(HEU) particles on contaminated centrifuges in Iran had come
from Pakistan, Shankar asked for confirmation about the
source of the particles. Noting that the results of the
IAEA's testing were not yet known, A/S Rademaker stated that
regardless of their origin, Iran has already admitted to a
history of undeclared uranium enrichment that clearly
violated its safeguards obligations. Asked if the IAEA had
questioned AQ Khan about his network's involvement in the
Iranian program, A/S Rademaker said the Khan network was the
focus of an international criminal investigation, but access
to Khan himself was limited.


8. (C) Shankar responded that "Khan's network continues to
unravel, driven by the dependence of Pakistan's nuclear
program on clandestine procurement and fueled by Pakistan's
drive to assert control over the Islamic world." She went on
to assert that the program was not the work of an individual
motivated by greed or ambition but had explicit state
support, citing examples of equipment delivered via Pakistani
military aircraft. Unlike in previous meetings, Shankar did
not ask for more information about the network, saying
instead that the GOI "does not want to complicate the work of
the international community in unraveling the network."

Concern about Nuclear Linkages between Pakistan and China
-------------- --------------


9. (C) Shankar went on, however, to describe security
threats to India arising from China's 20-year relationship
with Pakistan. She expressed dismay that China was allowed
to grandfather the 300-megawatt Chashma II nuclear power
plant in eastern Pakistan and fuel for the Chinese-supplied
safeguarded reactors while the extent of the Khan network was
being investigated. Noting that the border between Pakistan
and China is not monitored, according to Shankar, the GOI had
intelligence that items such as propellants, night vision
cameras, and gyro-stabilization devices were being
transferred from China to Pakistan, and "unconventional
financial transactions" from Pakistan to China have been
detected, including via the US. The GOI was disappointed
that the international community tolerated proliferation from
China, an NPT signatory, but still treated India as a pariah,
Shankar concluded. Later, Shankar passed two non-papers
about proliferation linkages between China and Pakistan (Refs
A and B).

India's Nonproliferation Initiatives
--------------


10. (U) Shankar described India's nonproliferation
initiatives as "sui generis" (of its own kind); not as a
result of the NPT, but because of India's own sense of
responsibility to safeguard this technology. She outlined
GOI initiatives in the areas of nuclear safety, nuclear
security, and export controls, among them: acceding to all 12
UN mechanisms to combat terrorism, active participation in
efforts to search and recover radiological sources,
involvement with the US and the IAEA in the Regional
Radiological Security Partnership, support for the IAEA's
Code of Conduct, and continuing EXBS exchanges.

Questions about India's New WMD Bill
--------------


11. (C) Chief among GOI nonproliferation initiatives was the
newly enacted WMD Bill (Ref F) which extends GOI authority
over the transit, trans-shipment, and brokering of WMD and
related intangible technologies and includes "catch-all"
language. In particular, Shankar stressed the difficulty of
including catch-all controls in the new legislation,
explaining that some agencies thought such language was too
broad.


12. (C) A/S Rademaker gave the GOI a non-paper containing
several technical questions about the bill and its coverage
(Ref E). Rademaker stressed the US need for confirmation
that these issues will be addressed in implementing
regulations. For example, the USG had noticed a difference
between the GOI and Missile Technology Control Regime (MTCR)
definitions of "missile," and asked how the GOI would ensure
that the broader MTCR definition would be the governing
definition in Indian regulations. Shankar responded that the
GOI was still in the early stages of reviewing its
implementing regulations and she could not comment on how
regulations would be promulgated, but noted that the law's
"missile" definition had been carefully chosen and changing
it was unlikely. Shankar did not respond to A/S Rademaker's
question to clarify whether the GOI was reviewing its current
regulations or would be drafting new regulations, but only
said that the GOI hoped to complete the exercise before the
PM's July 18 visit to the US. She remarked that the GOI
would welcome a statement of appreciation for the legislation
from the USG.

Discord about Harmonization and Adherence
--------------


13. (C) Broaching the most contentious issue of the meeting,
A/S Rademaker asked about GOI plans for adherence to the MTCR
and NSG regimes. Shankar said that the procedure for
accomplishing this had to be accepted nationally, and
suggested that rather than the two-step process outlined in
the NSSP, that GOI may accomplish adherence in a single step.
A/S Rademaker replied that in order to combine NSSP Phases 2
and 3, the GOI must harmonize its control lists then adhere
to the MTCR and NSG regimes, as laid out in the non-papers
provided to the GOI in November 2004. Shankar stated that
the GOI had made no final decision about adherence and it may
adhere "informally" by a mechanism different than the
regime-standards laid out in non-papers previously presented
by the USG. Further, she asserted that harmonization and/or
adherence was an autonomous matter that should be left to the
GOI and implied that harmonization may be sufficient. A/S
Rademaker underscored that formal adherence is a condition of
the NSSP, and that adherence and harmonization are two
separate issues. Shankar stated that the GOI is currently
only focused on harmonization and reiterated that this is an
autonomous process, appealing for "political space" for India
to accomplish this its own way.

Proliferation Security Initiative (PSI)
--------------


14. (C) With the endorsement of more than 60 countries, A/S
Rademaker expressed hope that the GOI would support PSI,
regardless of the nebulous future of the Core Group. He
added that the success of PSI to date has been that the
initiative is "self-propelled" and does not rely on the
direction of the ad hoc Core Group, which, he pointed out,
has not met in the last year. Shankar explained that the GOI
would defer its decision about whether to join PSI until a
decision is reached on the status of the Core Group. If the
Core Group were disbanded, India would still seek "equal and
non-discriminatory participation" in any PSI decision-making
successor. Noting that the Indian public is "very vigilant
about any perceived diminution of Indian sovereignty,"
Shankar said that the GOI also had reservations about the
authority of other countries to interdict and board Indian
ships, a reservation shared by other countries, e.g., France.
Noting similar concerns in the US, A/S Rademaker explained
that the USG did not consider PSI to allow "carte blanche"
boarding of its own vessels and was seeking ship-boarding
agreements with other countries that do not diminish national
sovereignty.

Suppression of Unlawful Acts (SUA) Convention
--------------


15. (C) Although the GOI supports the objectives of the SUA
Convention, Shankar expressed concern that the proposed
"catch-all" language may prevent the transport of dual-use
items for civilian use, such as nuclear safety equipment.
She noted that other countries, e.g., Israel, have also
flagged this language for further review. If this language
is adopted, Shankar stated that the GOI may reconsider its
support for the Convention. A/S Rademaker stated that the US
was "sensitive to forbidding actions that we would not want
to forbid," and promised to look into the matter.

Onward Proliferation Cases
--------------


16. (C) Describing India's record of nonproliferation as
"mixed" because the GOI previously lacked the legal framework
necessary to pursue certain cases the US raised in the past,
A/S Rademaker lauded the recent passage of the WMD Bill
giving the government greater authority to investigate and
prosecute proliferators. Shankar replied that MEA had
recently established an interagency group to facilitate
investigation of possible cases of proliferation, adding that
"the compulsion to investigate these cases is not as strong
in other agencies."


17. (C) A/S Rademaker gave the GOI a non-paper of 17 open
cases of suspected proliferation with specific questions
about each case (septel). MEA Under Secretary (Disarmament
and International Security) Nutan Kapoor provided non-papers
on two cases, Phulchand and BARC (Refs C and D),and gave
oral comments on the following cases:

-- Phulchand: (See text of non-paper in Ref C) GOI asserts
that the transaction did not happen because of GOI
intervention. According to Kapoor, the end-use of the CW
precursor was for gold mine extraction.

-- Balaji Amines: The GOI is waiting for more info from the
US about the end-user.

-- KG Global: The GOI has decided hold a hearing on the
firm's activities, but the specific transaction questioned by
the US did not happen.

-- Anu Technology: According to Kapoor, this case is ten
years old. The GOI stopped the transaction at USG request,
although there was no evidence. The GOI continued to monitor
the firm's activities and discovered relevant evidence based
on a minor violation. The GOI has begun legal proceedings
against the firm.

-- Graphite Technology: Because of GOI intervention, the
transaction did not occur, either with the Iraqi firm nor
with the Jordanian front company.

-- RJ Associates: GOI investigations revealed no use for the
AG-controlled chemical reactor vessels besides their stated
purpose for pharmaceuticals.

-- Sabero: The Indian firm declined further requests for
shipment of a CWC and AG-controlled chemical from the Iranian
firm, although the transaction would be permissible under
Indian law if the firm obtained the appropriate license.

In addition, the GOI asked the USG to investigate the
following possible cases of proliferation to Pakistan:

-- Chlight: (See text of non-paper in Ref B) GOI asserts
that the equipment that Chlight sought to procure, although
not a controlled item, contributes to Pakistan's nuclear
program.

-- Project Management Organization: (See text of non-paper
in Ref A)


18. (C) State's NP representative noted that Washington had
made a political decision to drop three Iraqi cases from the
list of open cases and the SA representative confirmed that
the USG considered all other cases closed.


19. (C) Shankar asked about the USG policy to include
conventional weapons transfers in the nonproliferation
dialogue. A/S Rademaker responded that although there were
currently no open conventional cases in the USG-provided
non-paper, we raise these in our nonproliferation discussions
because of our differing perspectives and since some
transfers could trigger US sanctions. Toward that end,
Rademaker strongly advised against arms transfers to Sudan to
avoid the accusation of being complicit in genocide. The NP
representative added that providing Lethal Military Equipment
to Sudan could also run afoul of US laws, leading to
potential sanctions. A/S Rademaker also cautioned against
conventional and sophisticated weapons transfers to Iran and
Syria as those weapons may be used against Coalition forces
in Iraq.


20. (C) On Iran, A/S Rademaker added that conventional
weapons transfers as well as WMD cooperation could compel the
US to impose sanctions under the Iran Nonproliferation Act
(INPA). "A close relationship with us precludes a close
relationship with Iran," he concluded. Shankar described GOI
relations with Iran as "limited," adding that the GOI
scrutinizes and monitors its joint activities. On the case
of the two Indian scientists sanctioned for cooperation on
Iran's WMD program (Drs. Surendar and Prasad),Shankar
reiterated the GOI belief that USG information about the two
scientists was incorrect. "We take your points seriously,"
A/S Rademaker said, adding, "The law is inflexible, but not
infallible. If we made a mistake, we can correct it."

Tracker Automated Export Control System
--------------


21. (C) Over lunch, A/S Rademaker outlined the USG offer to
provide a Tracker Export Control System, and necessary
hardware and training for the GOI to evaluate. He noted US
willingness to send a small team to New Delhi to demonstrate
and discuss possible arrangements to collaborate on
development and that the US was also prepared to discuss the
possibility of establishing a small bilateral working group
for future development -- the first such working group on
Tracker. Shankar was unsure of GOI interest in adopting
Tracker in part or in whole but expressed willingness to
learn more about the system. (Note: Embassy delivered
invitation to the Tracker workshop to Shankar on May 27.)

Participants
--------------

22. (U) USG Participants:
State Dept. Assistant Secretary for Arms Control Stephen
Rademaker
Embassy New Delhi DCM Robert O. Blake, Jr.
State Dept. Arms Control Bureau Robert Gromoll
State Dept. Arms Control Bureau Tom McIlvain
State Dept. Non-Proliferation Bureau Kathryn Schultz
Embassy PolMilOff Stacy Gilbert (Notetaker)
Defense Dept. Office of the Secretary Stacie Konan
State Dept. South Asia Bureau Matt Lowe

GOI Participants:

MEA Additional Secretary (International Security) Meera
Shankar
MEA Deputy Secretary (Americas) Santosh Jha
MEA Under Secretary, Disarmament and International Security,
Nutan Kapoor
MOD Defense Research and Development Organization, Dr. Anup
Chatterjee
Dept of Atomic Energy, Dr. S.D. Misra
Dept of Atomic Energy, Scientific Officer, Dr. A.B. Awati


23. (U) A/S Rademaker cleared this cable.
BLAKE