U/S BURNS DISCUSSES PM'S VISIT WITH FS SARAN

C O N F I D E N T I A L SECTION 01 OF 05 NEW DELHI 005047

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E.O. 12958: DECL: 06/26/2015
TAGS: PREL KNNP ETTC EAGR IN NSSP
SUBJECT: U/S BURNS DISCUSSES PM'S VISIT WITH FS SARAN

REF: NEW DELHI 4633

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


1. (C) Summary: In a three and a half-hour session with
Foreign Secretary Shyam Saran on June 24, U/S Burns reviewed
deliverables for PM Manmohan Singh's July 18 visit to
Washington, discussing in detail those of greatest interest
to New Delhi (Civil Nuclear cooperation and UNSC reform) and
reviewing progress on a number of others (education,
agriculture, democracy, HIV/AIDS, and S&T). They also
discussed Dabhol, Boeing, Iraq, PSI, space cooperation, and
mil-mil ties. On UNSC reform, the Under Secretary stressed
that the Council must be adjusted to 2005 realities and
include developing countries and states from outside Europe,
explained the "two or so" position on permanent members, and
urged India to delay a vote on the G-4 proposal. Saran
welcomed US support for an increase in permanent and
non-permanent members, as well as developing countries before
launching into an impassioned appeal for Indian membership in
an enlarged UNSC: "Let me be brutal and honest," the recently
elucidated membership criteria is similar to a longstanding
Indian proposal, which "create huge expectations." U/S Burns
told Saran that Washington understands Indian sentiments, but
that effectiveness of the Council and broader UN reform is
paramount. End Summary.


2. (C) Observing that the US and India are at an important
juncture in their relations, Saran said the PM was very
excited about his visit. The US and India are poised at an
historic transformation, which President Bush's planned trip
to India confirmed. The Under Secretary responded that
Secretary Rice is convinced that the US and India are in an

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historic phase in their ties, and wants to ensure that
relations "fire on all cylinders." He expected the PM's
visit to be perhaps the most important one ever for the two
countries, adding that the PM would receive a first rate
reception as befits India's emerging global role.

Recent Achievements
--------------


3. (C) Saran then reviewed the achievements of the last
year. Secretary Rice's March visit was a "defining moment"
in the bilateral relationship. Phase I of NSSP was completed
in September, when the PM and President Bush also met. India
was the first country to support the UN Democracy Fund, and
announced a significant contribution as well. Defence ties
were intensifying, with a vigorous schedule of joint
exercises and the excellent Tsunami cooperation between the
militaries. Co-production of fighter aircraft was being
discussed, which had never been on our agenda in the past.
Defense Minister Mukherjee's late June visit to the US would
be a success. On economics, the Parliament passed the Patent
Act, abolished Press Note 18 limiting foreign investment, and
signed the Open Skies Agreement. The Energy Dialogue was
launched, the Economic Dialogue revived, and the CEO Forum is
in train. The recent Boeing order was the only issue on
which President Bush has called the PM, "and that went
through."


4. (C) Acknowledging that there had been skepticism in the
USG about the course of US-India relations after the UPA
government took power in May 2004, the Foreign Secretary said
the record belied these apprehensions. Saran said he had
stressed to senior USG officials during two recent visits to
Washington that the GOI would fulfill its commitments under
the NSSP, and that the GOI was "in the process of adhering to
the NSG and MTCR."

Deliverables for PM Visit
--------------


5. (C) The Foreign Secretary and the Under Secretary went
through a number of deliverables for the PM's visit:

-- Democracy Initiative: GOI hopes to come up with a package
to announce together with the USG. U/S Burns thanked the GOI
for its pledge to contribute to the UN Fund and urged
agreement on a bilateral project such as democracy promotion,
which was central to the Administration's second term, as
exemplified by the Secretary's recent Cairo speech, the most
important of her first six months in office. Saran responded
that the GOI initiative (reftel) reflected PM support. India
was glad to join hands with the US in a multilateral
framework, because the GOI wants to avoid the perception that
any joint undertaking is "imposed by another country." India
is serious about working with the U.S. on democracy issues,
and this has the PM's support. The Under Secretary conveyed
a USG democracy proposal, which the FS undertook to study.

-- HIV/AIDS: Saran reviewed briefly the GOI India-US Global
HIV/AIDS Initiative. U/S Burns passed a paper proposing
cooperation with considerable private sector participation,
including a Capital Fund. Saran noted that the PM is
personally interested in more US-India cooperation on
HIV/AIDS.

-- Education: Urging a "restoration of the spirit of the
1950s," Saran outlined an "India-US Educational Cooperation
and Exchange Initiative." Recalling that the IIT Kanpur was
a child of US-India cooperation, and the Green Revolution
owed much to American support, he urged a revival of the
"Kanpur spirit," but adding new areas such as Indian Studies
into the mix. After the DCM reminded of GOI restrictions on
fundraising efforts by the U.S. Educational Foundation in
India, MEA Joint Secretary (Americas) S. Jaishankar said this
issue was "very close to resolution."

-- Agriculture: PDAS Camp briefed on ideas to beef up or
restore linkages between the two sectors, and apprised Saran
of a proposed June 30 DVC along these lines. The Foreign
Secretary said India was working in the same direction and

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predicted that it would not be difficult to work something
out. He outlined the GOI "India-US Knowledge Initiative on
Agricultural Research," which would strengthen cooperation
with Indian institutions that are themselves a product of
relations with the United States. He stressed that there was
a strong private sector dimension to the Indian initiative.
Ambassador Mulford expressed enthusiasm for a strong
agriculture deliverable.

-- Tsunami Disaster Relief: Recalling excellent US-India
cooperation in the Core Group, the Under Secretary proposed
greater cooperation in capacity building to combat natural
disasters in Asia, such as by conducting joint military
exercises focused on this issue, and passed a paper fleshing
out this idea. PDAS Camp added that while disaster
management is largely a civilian function, PACOM is the nodal
point for activities in much of Asia, which increases the
importance of bringing the militaries together. Saran
responded that disaster management is a civilian function in
India, and that the Indian Navy would never have begun to
operate during the Tsunami without clearance, but that the
GOI would consider the proposal. It might be useful to
fine-tune arrangements. U/S Burns observed that the US
military also operates under a civilian umbrella, mentioned
the greater effort the Department is putting on coordinating
reconstruction efforts after international tragedies, and
suggested that Ambassador Carlos Pascual (S/CRS) visit India
or that Indian visitors in Washington seek him out. This a
natural area for US-India cooperation, the U/S concluded.

-- Science and Technology: Saran reviewed a proposal to
cooperate on nano-technology which the MEA had recently
conveyed to the Embassy (see septel). Stressing that this is
a frontier area, he urged the conclusion of "something
pioneering" at the summit. The U/S responded that he
expected relevant agencies to look into the idea carefully.
The DCM observed that during Minister Kapil Sibal's recent
visit to Washington, it was clear that India is very
interested in concluding a bilateral S&T Agreement. The U.S.
is waiting for India's counter draft. DCM noted that any
changes to the IPR annex of the Agreement would complicate
prospects to conclude one before July 18. The Foreign
Secretary undertook to check on the status of the Agreement

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with the S&T Secretary.

-- Industrial Research and Development: Saran outlined a
proposal (see septel) modeled on the US-Israel "Bird"
Program, which would complement the existing High Tech
Cooperation Group (HTCG). The U/S pledged that the USG would
consider the matter.

Other Issues
--------------

-- (C) Dabhol: Ambassador Mulford highlighted the positive
impact an end to the Dabhol dispute would have on US
investors, and urged that a target date of early July be set
for the completion of negotiations. Observing that all the
US parties have resolved their issues with the GOI except one
(Bechtel),he drew on a telephone call the previous evening
with a member of the firm's senior management to explain why
the Bechtel perspective about outstanding matters (tax and
third party liability) differ so from those of the other
parties. The Ambassador urged the GOI to appreciate the
firm's unique situation, commenting that a resolution could
open the door to more international involvement in
infrastructure development, a sector of great needs in India.
Addressing Bechtel's concerns would be extremely important
signal for other CEOs with concerns about how investors are
treated in India.

-- (C) Boeing aircraft sale: The Under Secretary said he had
spoken with Boeing the previous evening, which had expressed
interest in final Cabinet approval for the recent sale to Air
India. Saran undertook to check whether this would be
possible before July 18.

-- (C) PSI: U/S Burns conveyed that the Core Group would soon
be phased out, and urged India to take the preparatory steps
to endorse the Statement of Principles. Saran replied that
if it is phased out, the GOI would have to look at the
details and run the issue through the Indian system.
Commenting that as a matter of principle, there was no
ambiguity in New Delhi's position and that India is
interested, he reiterated the standard GOI caveats -- that
participation does not violate international or maritime law,
and that India would have to know more about the operational
details. He expressed interest in obtaining these details to
determine whether India could participate. U/S Burns
emphasized that the step does not represent a diminution of
USG interest in PSI, that it is one of the Administration's
major CT initiatives, and said the USG would be pleased to
provide a briefing on operational details early in the week
of June 27.

-- (C) Iraq: The Under Secretary expressed appreciation for
the intervention by Foreign Minister Natwar Singh at the
US-EU Iraq conference in Brussels earlier in the week,
commenting that the only country that had been unhappy with
the meeting was Damascus. U/S Burns reviewed problems
arising out of Syria's negative role with regard to foreign
fighters.

-- (C) Military: The Under Secretary expressed satisfaction
that Defense Minister Mukherjee was on his way to Washington,
stressing how important such mil-mil contacts are for the
bilateral relationship. On the P-3, Saran said Admiral
Fallon had recently called the Navy Chief to report that no
P-3s were immediately available, but that he was looking for
one. On the F-16-/F-18 issue, Saran said he was certain
Mukherjee would ask about co-production under license and
tech transfer during his visit. U/S Burns agreed that
co-production is key, and that the USG is still in the early
stages of this issue. Nevertheless, the US-India
relationship stands on its own merits, and is not related to
other countries.
-- (C) Space: U/S Burns expressed interest in fielding an
instrument on the Chandrayan lunar mission, but that a TAA
(Technolgy Assistance Agreement) would need to be completed
first. On negotiating a Space Launch Agreement, the U/S
noted that USTR is preparing a draft agreement. Saran took
note of this.

-- (C) Project Tiger: The Foreign Secretary conceded that the
MEA had not been focused on the US proposal to work with the
GOI to save the Bengal Tiger, and undertook to speak about it
with the Ministry of Environment and Forests.

UNSC
--------------


6. (C) The Under Secretary explained the USG position on
UNSC reform, stressing that the Council must be adjusted to
2005 world realities and include developing countries and
states from outside Europe. On the high degree of skepticism
in the Congress to the UN, he said the Secretary opposes the
Hyde Act and will invest political capital in fighting it,
but observed that the proposed legislation reflects the very,
very negative attitude towards the UN in Washington as
scandals continue to unfold. This could affect the prospects
for ratification by the Senate of a UNSC expansion. In order
for India to achieve UNSC permanent member status, the Senate
will be interested in India's voting patterns at the UN,
where New Delhi voted only 24% of the time in favor of those
matters of greatest interest to the USG, he stated.


7. (C) The more modest US proposal of "two or so" more
permanent members reflects a concern about the effectiveness
of an expanded UNSC, the U/S continued. He lamented that 98%
of the discussion about UNSC reform is about expansion, and
not the other critical issues (human rights, management,
etc.) facing the organization. It was important to talk
about UNSC reform, but also that it not outpace discussion of
these other critical issues. The debate thus far has been
superficial, and needs to become more substantive. The Under
Secretary urged India to use its influence to postpone the

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vote on the G-4 Framework Resolution proposed for mid-July.
The USG would prefer to see a more iterative process, and
predicted that a vote on the G-4 proposal would be divisive.


8. (C) The Foreign Secretary responded that India welcomes
the two aspects of the US proposals: that there should be an
expansion of permanent and non-permanent members, and that
developing countries should have greater representation.
Saran asserted that there would be more divisiveness if
reforms were to be more limited. The lack of representation
or under-representation of regions also "must be set right."
The G-4 proposal is the only one on the table that looks at
an increase in permanent and non-permanent members, and
representation from the developing world. "We have adjusted
where we can, and are confident that our proposal can carry
along a larger number of countries than a more limited
expansion." "I hasten to assure you that we're not
unifocally looking at the UNSC, to the exclusion of
everything else." The GOI agrees that UN reform is about
more than enlarging the UNSC, and has been working on
management and other issues, he stated.


9. (C) Saran said India is also conscious that UN reform is
a "long haul," that there are many complex issues to face and
hurdles to cross. "We are not impractical about this," he
went on, but the issue has momentum for the first time in
many years, and the GOI wants to ensure that in the shake-up,
developing countries get a better deal, as India has a lot of
influence there. "Our aspirations may not be the same as
yours," he continued. Much depends on how the Africans
regard this. "It is like a kaleidescope, changing every
day." India's bottom line is that it is important to keep
G-4 solidarity intact.


10. (C) Saran recalled that India had spelled out criteria
for UNSC expansion in 1994 that did not differ that much from
those the USG recently set forth, which included size,
democratic form of government, role in international
peacekeeping operations, and non-proliferation record. On
this basis, he stressed, "we pass the test," and "India
belongs in the UNSC." He urged the US "not to look for
support from India on each and every issue," noting that
there were many areas (consensus resolutions) where the two
countries are very close. On human rights, India does not
like the "report card approach." "It would be an enormous
gesture for the US to say that it welcomes India, but if you
cannot do this, please tell us and we will accept it." "We
fully recognize that this is a long haul, and that it may not
happen for a number of years, but a gesture would transform
the relationship and would make a tremendous difference."
"Let me be brutal and honest," he continued, the UNSC
membership criteria recently elucidated by the USG is very
similar to those India spelled out in 1994, which "creates
huge expectations in India."


11. (C) The Under Secretary replied that the USG is keeping
its options under review and supports Japan. There is a
danger of a collision of interests if the process is not
slowed down. Beijing wants no reform. For the P-5,
effectiveness is the issue. Washington understands Indian
sentiments, but the President will make the decision, he
concluded. Saran responded that "when you say these things,
no one will look at the fine print." He realized this was a
decision for President Bush to make. Unlike China, India has
been extremely careful in its reactions. U/S Burns cautioned
that he did not know whether the decision would be made by
the time the PM visits Washington on July 18.


12. (U) Participants:

U.S.
--------------

U/S Burns
Ambassador Mulford
DCM Bob Blake
PDAS Don Camp
NSC Director Xenia Dormandy
P Special Assistant Caitlin Hayden
Acting Pol M/C Matt Boyse

India
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Foreign Secretary Saran
Joint Secretary S. Jaishankar
Director Renu Pall
Deputy Secretary Santosh Jha
Under Secretary Raj Srivastava
BLAKE