U/S BURNS' DISCUSSIONS ON SOUTH ASIAN ISSUES

C O N F I D E N T I A L SECTION 01 OF 03 NEW DELHI 005048

SIPDIS

E.O. 12958: DECL: 07/01/2015
TAGS: PREL PTER PK AF IR NP BG CE IN US
SUBJECT: U/S BURNS' DISCUSSIONS ON SOUTH ASIAN ISSUES


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


1. (C) Summary: U/S Nicholas Burns met with Foreign
Secretary Shyam Saran on June 25 to review Indo-Pak

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relations, Iran, Nepal, Bangladesh, and briefly Sri Lanka.
Although pleased with the groundswell of support for
people-to-people exchanges with Pakistan, Saran warned that a
single major terrorist attack, rising infiltration across the
LOC, or domestic instability in Pakistan could seriously
endanger recent gains in the peace process. On Iran, U/S
Burns expressed skepticism that Tehran would accept the EU-3
compromise to let Iran to keep its nuclear plants but not
allow access to any part of the fuel cycle. The GOI was
encouraged by Nepalese political parties' concurrence on a
common platform seeking a ceremonial role for the monarch,
civilian control of the army, but did not expect the Maoists
to agree. The GOI continues to withhold lethal military
assistance to the RNA. The GOI was making progress on border
issues and increased trade with Bangladesh, but has increased
concerns about Dhaka's slide toward Islamic fundamentalism.
Finally, U/S Burns welcomed the news of an agreement between
the Sri Lankan government and the LTTE to share tsunami aid.
End Summary.

Pakistan
--------------


2. (C) Because neither New Delhi nor Islamabad would change
their positions regarding border demarcation in Kashmir, the
Foreign Secretary summarized GOI strategy for managing the
ongoing dispute: "Rather than redraw the lines, why not deal
with the human consequences so that the lines become less
relevant?" He was pleased with the groundswell of support
for people-to-people exchanges, citing an unprecedented
volume of cross-border traffic creating a "larger and larger
constituency of peace." Further, the "natural affinities of
peace" could expand with better infrastructure, such as a
proposed Pakistani consulate in Mumbai and a counterpart
Indian consulate in Karachi.


3. (C) Although there is popular support for these
initiatives, Saran expressed concern that several factors
could derail the process. A single high profile attack like
the bombing of Parliament in December 2001 could "send both
sides back to square one." Islamabad's refusal to dismantle
terrorist infrastructure was evident in continued training
camps and terrorist handlers who are allowed to move freely
in Pakistan, which gave New Delhi a sense that terrorism was
"a card that Islamabad still intends to play."


4. (C) Noting that the Taliban are still active in
Afghanistan, the GOI had heightened concerns about increased
infiltration from Pakistan because it could negatively impact
the Indo-Pak process. Admitting he did not know the
motivation behind the alleged assassination attempt of the US
Ambassador to Afghanistan by three Pakistani nationals, Saran
described the attempted attack as symptomatic of Islamabad's
unwillingness to stop cross-border infiltration. The FS
cautioned further the US against making distinctions between
"good" and "bad" Taliban.


5. (C) Observing that the peace process depends to a
considerable degree on Musharraf's personal assurances,
domestic instability and weak support within his own regime
could also undermine the process. Saran asked whether
international consensus backing President Musharraf had been
shaken by divisions that have started to show in Pakistan's
domestic politics, as well as events in Baluchistan, and
recent incidents of sectarian violence in Karachi.


6. (C) U/S Burns echoed Saran's concerns about cross-border
terrorism in Kashmir and infiltration along the
Pakistan-Afghanistan border. Noting that the Taliban's
seasonal cross-border offensive was more extensive this year
than last year, he relayed US commitment to maintain its
force presence in Afghanistan, but with modified troop
positions. The USG has encouraged NATO member states to
increase their presence in Kabul, and northern and western
Afghanistan, thereby allowing the US to concentrate on more
problematic areas in the south and east. However, this
change would only be effective if some NATO members adopted
more aggressive rules of engagement in their respective
areas. PDAS Camp added that Pakistan had taken positive
steps such as taking the lead in securing the tribal areas
and had turned over the captured al-Qaeda suspect Abdul Faraj
al-Libby.

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


7. (C) In response to U/S Burns' question about the
implications of the election of Mahmoud Ahmadinejad as the
new Iranian President, Saran admitted that India does not
know much about him, but that he seemed to be conservative,
but not a part of the clergy, the Revolutionary Guard, nor
the business community. "He projects himself as an ordinary,
god-fearing Iranian," he observed.


8. (C) In his role as liaison to the EU-3 on Iran's nuclear
program, U/S Burns then reviewed the status of talks with
Tehran. In light of the USG position that Iran should not
have access to any part of the nuclear fuel cycle, the EU-3
was developing a compromise that would allow Iran to keep its
nuclear plants, but all parts of the fuel cycle would remain
outside the country. While he hoped the EU's renewed offer
would succeed, U/S Burns expressed skepticism that Tehran
would accept it. If these negotiations fail, the USG will
encourage the EU-3 to go to the IAEA Board of Governors (BOG)
to confirm that Tehran could not give an "objective
guarantee" after which the BOG could refer the matter to the
Security Council to consider international sanctions.

Nepal
--------------


9. (C) Saran noted positive developments in Nepal, namely
the agreement of seven political parties on the same
platform, led by Nepalese Congress Party leader GP Koirala,
and their discussions on a power-sharing package. The GOI
remained engaged with the Palace, Royal Nepalese Army (RNA),
political parties, and via indirect communication with the
Maoists. According to Saran, the political parties have
engaged the Maoists regarding a "minimum program for
settlement," comprised of a ceremonial role for the monarch;
the RNA to be under the control of an elected civilian
authority; the Maoists to give up violence for political
activity and open the areas they control to unfettered
political activity; elections to be held without the
intimidation of either the Maoists or RNA; and a "neutral
referee" to monitor these assurances. If these conditions
are fulfilled, all parties would agree to a cease-fire,
followed by elections. According to the FS, the parties do
not think the Maoists will accept this plan, but they will
nevertheless continue to "agitate for democracy," although
not with the Maoists. With the political parties and the
Maoists allied against him, the GOI has tried to convince the
King that he has endangered the future of Nepal's monarchy,
Saran stated.

Military Assistance to Nepal
--------------


10. (C) Saran said the GOI provided the RNA with non-lethal
equipment that was already in the pipeline for use against
the Maoists (thermal imagers, transport, etc.). Saran
confirmed that the GOI had not yet made a decision on
near-term arms sales. Similarly, PDAS Camp noted that the
USG had also provided non-lethal equipment such as night
vision goggles and Kevlar vests, but was withholding M16s.
Camp expressed concern about the signal sent by the GOI in
dealing with the Maoists. Saran clarified that the GOI had
no direct dealings with the Maoists, but had an interest
because of Maoist links with the insurgency in India's
Northeast. Saran offered the USG a future confidential
briefing on the GOI's contacts with Maoists. He stated
firmly, however, that the Maoists would have no prospect of
dialogue with the GOI unless they abandon violence.
Bangladesh
--------------


11. (C) The Foreign Secretary reviewed the results of his
meetings earlier in the week with Bangladesh's Foreign
Secretary. There had been progress on boundary and trade

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issues, and the two sides hoped to renew the joint boundary
group to continue discussion of demarcation of the boundary
and exchange of enclaves, among other issues. On trade, he
wanted to replicate the GOI Free Trade Agreement with Sri
Lanka which resulted in more trade and transport links
between the two countries. The upcoming Joint Working Group
on Trade will look at non-tariff barriers, customs
cooperation, and better transport connections, offering
Indian financing on the latter. "If we give our neighbors a
stake in our own economic development, it will necessarily
lead to better relations," Saran stated.

12. (C) Saran welcomed Dhaka's efforts to provide better
border security and the recent agreement on joint patrolling,
beginning with river patrols. However, he expressed grave
concern about Dhaka's slide toward fundamentalism, reports of
Islamic parties putting pressure on the government,
increasing incidents of harassment of the Hindu minority
population and Ahmadiyas, as well as other Muslim sects and
intellectuals, as well as evidence of Pakistani ISI
involvement in Bangladesh. Further, he complained that there
was "no closure on certain unexplained events" such as the
2004 Chittagong arms seizure and linkages between madrasas in
Bangladesh with security concerns in Thailand.

Sri Lankan Agreement to Share Tsunami Aid
--------------


13. (U) Finally, U/S Burns welcomed the news of an agreement
between the Sri Lankan government and the LTTE to share
tsunami aid. Saran remarked that India had reservations

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about the agreement, but did support the Joint Mechanism and
agreed to continue to assist Sri Lanka through a number of
bilateral projects.

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


14. (U) USG Participants:

U/S Nicholas Burns
Robert Blake, DCM Embassy New Delhi
Donald Camp, PDAS, South Asia Bureau
Matt Boyse, A/PolCouns, Embassy New Delhi
Xenia Dormandy, NSC Director
Caitlin Hayden, Special Assistant, P
Stacy Gilbert, PolMilOff, Embassy New Delhi (Notetaker)

GOI Participants:

Foreign Secretary Shyam Saran

S. Jaishankar, Joint Secretary (Americas)
Renu Pall, Director (Americas)
Santosh Jha, Deputy Secretary (Americas)
Raj Srivastava, Under Secretary (Americas)


15. (U) U/S Burns cleared this cable.
BLAKE