NUCLEAR ISSUES OVERSHADOWED NATWAR'S TRIP TO IRAN

C O N F I D E N T I A L SECTION 01 OF 03 NEW DELHI 007261

SIPDIS

E.O. 12958: DECL: 09/14/2015
TAGS: PREL PGOV ENRG EPET KNNP PARM PINR IN IR UK GM
SUBJECT: NUCLEAR ISSUES OVERSHADOWED NATWAR'S TRIP TO IRAN

REF: A. NEW DELHI 7259

B. STATE 168950

Classified By: CDA Geoff Pyatt for Reasons 1.4 (B, D)


1. (C) Summary: MEA Joint Secretary
(Pakistan/Iran/Afghanistan) Dilip Sinha complained to CDA and
Poloff during a September 15 office call that nuclear
proliferation issues overshadowed in the press the rest of
Foreign Minister Natwar Singh's September 2-4 trip to Iran.
The trip's substantive focus, Sinha averred, was energy
cooperation, particularly on LNG and the proposed
Iran-Pakistan-India gas pipeline. Trade and transit rights
for Indian goods to Afghanistan were also on the table.
Sinha judged that the EU3 proposal suffered from bad timing,
coming as it did when the new government in Tehran was still
getting its sea legs; he also reiterated that Natwar did not
utter the strident remarks attributed to him by Iranian
press, and described the message the Foreign Minister
conveyed on behalf of his British and German counterparts.
Sinha shared with us his personal impressions of progress and
improvement on the ground in Tehran, where he served ten
years ago, and insights on the new Iranian Foreign Minister.
End Summary.

Nuclear Cloud Over Iran Trip
--------------


2. (C) Nuclear proliferation -- which was only a small part
of Natwar's Iran agenda -- overshadowed the rest of trip,
Sinha told us. The Foreign Minister's visit was largely to
"meet and greet" the new government in Tehran, reciprocating
the trip the former Iranian Foreign Minister made to Delhi
shortly after the UPA government came to power here last
year, he added. British Foreign Minister Jack Straw had
called Natwar before he left for Iran, and German Vice
Chancellor Joschkar Fischer called while he was there, to
suggest that India weigh in to urge a constructive Iranian
reply to the EU3.

India Not Engaged with Iran on Nuclear, Military
-------------- ---


3. (C) India has no nuclear cooperation with Iran, Sinha
told us. The only military cooperation is in training,
exchanges, and occasional port calls. Iran had asked for
civil nuclear assistance 15 years ago, but India exercised
its own restraint and declined, he added.

An Agenda of Energy and Economics ...
--------------


4. (C) Natwar's agenda focused on energy cooperation and
economic relations, Sinha explained. India and Iran had
signed a deal for 5 million tons of LNG prior to the Iranian
elections, and the GOI needed to finalize this deal with the
new government. The two parties are still negotiating the
pricing for a second deal for 2.5 million tons per year.


5. (C) The Iran-Pakistan-India pipeline was also on the
agenda. Sinha reported that Tehran wanted to start
trilateral talks, but the MEA was only cleared for bilateral
meetings with Tehran and Islamabad, and would have to revert
to the Cabinet for permission to expand the venue. "Now is
the time to start trilateral talks," he added.


6. (C) Sinha also informed us that two Indian companies plan
to invest in the Free Trade Zone near Bandar Abbas (one in
the auto parts industry). These would be the first
substantial Indian investments in Iran, and Natwar was keen
to ensure that Iranian law would protect the Indian
investments.

... And Afghan Transit
--------------


7. (C) Sinha continued that Natwar also sought expanded
transit rights to Afghanistan and Central Asia for Indian
goods. On that vein, the GOI also needed Tehran's help in
cracking down on local corruption, which significantly drives
up the prices for goods heading to Afghanistan. He pointed
out that India still needs to send its assistance to
Afghanistan through Iran, given the difficulty of delivering
aid through Pakistan (Ref A).

Nuclear Tempest Puts India on the Spot
--------------


8. (C) The nuclear issue only came up because Natwar
conveyed the EU3 message "as a member of the IAEA BOG," not
as any part of the GOI's agenda, Sinha explained. Tehran
responded that it insists on its right to a full nuclear fuel
cycle, and will consider full safeguards under these
principles; the GOI conveyed this message back to the EU.
Sinha added that the GOI considers Iran responsible for
living up to its obligations as an NPT signatory. A
journalist well connected to the MEA told us the Foreign
Minister was taken aback by the Iranian regime's "crazy"
language on the nuclear issue.


9. (C) Sinha brushed aside the press reporting on Natwar's
remarks, saying that Iranian media got it all wrong. Natwar
refused to talk to the media except to clarify that he raised
the nuclear issues at the EU3's request, he explained.


10. (C) CDA drew from Ref B to explain the IAEA's legal
responsibility to report suspected breaches, and emphasized
that the USG wants Tehran to re-suspend conversion and
enrichment and cooperate with the EU3 and the IAEA. CDA
added that the USG is not seeking UNSC approval for military
action at this stage, as some in Delhi have speculated.
Sinha commented that if a hurricane could cause significant
spikes in energy prices, he could only imagine the effect a
military engagement in the Gulf would have.

Sensitive Issues and New Governments: A Poor Mix
-------------- ---


11. (C) Sinha assessed that the new government in Tehran is
"relatively inexperienced." "We should give them some time
to come to grips with the nuclear situation," he added,
pointing out that the government had to deal with the EU
offer very shortly after coming to power. Sinha also noted
that the new government was elected on a strong nationalist
platform, so the EU3 would have been a particularly irksome
issue for it. "Some degree of bravado was expected," he
concluded.

The New Iranian Foreign Minister
--------------


12. (C) New Iranian Foreign Minister Manuchehr Motaki
studied at Bangalore University in the late 1970s and still
has fond memories of his time in India, although he has not
visited India since then, Sinha told us. Motaki was active
in the anti-Shah movement and communicated with Ayatollah
Khomeni when the latter was living in Baghdad. He quit
university during revolution and returned to Iran by walking
across Pakistan, and met Khomeni upon his return from Paris.

Impressions of Iran, Ten Years Later
--------------


13. (C) Sinha, who served in Iran ten years ago, described
his sense of the changes over the past decade. Prosperity is
visible, there are high-rises, more consumer goods, and Pepsi
is now on the market and competing with Zam-Zam cola, he
said. The people are also "more reasonable, and more
relaxed" than they were ten years ago. The country still
faces many problems, but "there is a strong sense of
security, especially from the women," he concluded.

Comment
--------------


14. (C) As Sinha was quick to note, the policy issues
involved here are now in the hands of more senior officials
in New York. However, his briefing on the Foreign Minister's
visit to Tehran provided some useful insights into these
discussions, along with a sense of acute GOI discomfort at
finding itself in the middle of the EU3 negotiations. End
Comment.


15. (U) Visit New Delhi's Classified Website:
(http://www.state.sgov.gov/p/sa/newdelhi/)
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