BURNS-SARAN OCTOBER 21 MEETING ON BILATERAL ISSUES

C O N F I D E N T I A L SECTION 01 OF 07 NEW DELHI 008245

SIPDIS

E.O. 12958: DECL: 10/21/2015
TAGS: PGOV MASS EAID EAGR ENRG EINV KNNP ETRD EAIR ETTC ECPS TSPA TBIO TSPL CVIS KDEM SENV IN PK US
SUBJECT: BURNS-SARAN OCTOBER 21 MEETING ON BILATERAL ISSUES

REF: NEW DELHI 8004

Classified By: Ambassador David C. Mulford, Jr. for Reasons 1.4 (B, D)


1. (C) Summary: Much progress was made in the October 21
opening meeting in Delhi between Under Secretary for
Political Affairs Burns and Foreign Secretary Shyam Saran
which reviewed the US-India joint ventures launched at the
July 18 Summit. Both agreed that the two sides must ensure
that small issues do not detract from the broad and
substantial progress laid out by the July 18 agreement. The
foundation steps of realizing the July 18 agenda -- creating
and staffing appropriate working groups and formalizing terms
of reference -- are largely complete. Work on the agenda
itself is now underway in numerous areas: energy, the CEO
Forum, agriculture, information and telecomms, civil space,
promoting democracy, HIV/AIDS, and disaster relief. Also
discussed were the public announcement of F-16 sales to
Pakistan, visas for Indian scientists traveling to the US,
the HTCG, Indian defense procurement, the Boeing-Air India
tender, wildlife conservation cooperation, and proliferation
security. End Summary.

Ensure Convergence Prevails Over Tactical Concerns
-------------- --------------


2. (C) Saran began by thanking Undersecretary Burns for the
USG contributions to the PM's National Relief Fund for
earthquake disaster assistance, and for his October 18
remarks at the Asia Society. He noted that Indians "in all
sections of society" consider the PM's visit to the US and
the July 18 agreement as a "major step forward" in bilateral
relations. Saran said that "both sides must not allow
short-term or tactical concerns take our eye off the board
... We must be relentlessly positive in our approach,"
although he recognized that both democracies must bring along
our respective public opinions.


3. (C) U/S Burns reaffirmed the condolences offered by
POTUS, the Secretary, and Ambassador Mulford for the loss of
life due to the October 8 earthquake, and offered whatever
relief assistance the GOI might require. He responded that
the US side has been hard at work in all the areas outlined
for cooperation under the July 18 agreement, and noted that
it signaled Washington's commitment to the new strategic
partnership. The U/S invited Saran to come to Washington in
December and noted that he would return to Delhi in January,
and suggested that many items could be finalized before the
expected early 2006 POTUS visit to India.

F-16 Sale to Pakistan: GOI Concern is Public Opinion
-------------- --------------


4. (C) Saran and MEA Joint Secretary (Americas) S Jaishankar
pointed out that the GOI's concern over F-16 sales to
Pakistan is not over strategic balance -- which they admitted
would not be seriously impacted -- but over the optics.
Saran predicted that Indian skeptics would view the sale as
rewarding Pakistan's decision to abstain from the September
24 IAEA vote on Iran (in which India voted with the US),
which could cause political problems for India's coalition
government. He added that "the public will view that India
can be their only target" (referring to the F-16s).


5. (C) U/S Burns replied that the USG is pursuing separate,
de-hyphenated relations with New Delhi and Islamabad, in
which the US-India relationship would be the fullest and most
comprehensive in Asia. He told Saran we could not let F-16
sales unduly complicate the host of other ties which India
and the US are forging, and informed him that the public
announcement would probably arrive around October 26. U/S
Burns reminded Saran of the prospect of larger sales of US
fighters to India, PAC-3 sales, and Indo-US fighter
co-production, and suggested that neither the US nor India
wants to over-hype the F-16 sale.

GOI Reports Progress on Energy Dialogue
--------------


6. (C) Saran reported that four of the five joint working
groups have finalized their terms of reference (TOR),and
only the civil nuclear group's TOR is pending. He noted that
the two sides have not yet come to closure in three areas --
material security, physical security, and safeguards -- but
predicted that the issues would be resolved in the next DVC,
scheduled for November 2. Saran outlined the next steps as
face-to-face working group meetings, moving forward on the
TOR activities, and broadening private sector participation,
and asked if a Steering Committee meeting by the end of 2005
was possible. He hoped that Secretary Bodman would be
available for a meeting before the POTUS visit to India.
Jaishankar listed three priority areas where the GOI sought
to realize concrete benefits: civil nuclear energy; coal
technology (both coalbed methane and NC2 gassification); and
renewable energy, particularly bio-diesel.


7. (C) U/S Burns noted that the working groups still have a
lot of work ahead of them to finalize Energy Dialogue
deliverables. He told Saran that security issues should be
on the civil nuclear agenda, and hoped the GOI could be
flexible on this. Ambassador Mulford pointed out that
addressing the security aspects under the civil nuclear
dialogue was "vital," and doing so would underline India's
reputation as a responsible nuclear power. Dividing civil
nuclear facilities from military facilities would govern the
timing of bringing the civil nuclear agenda before Congress.
U/S Burns indicated that progress would have to precede a
Steering Group meeting.

CEO Forum Needs to Focus on Macro Problems
--------------


8. (C) The Indian members of the CEO Forum met September 9
in Mumbai under Indian Co-Chair and prominent industrialist
Rattan Tata, and crafted a list of issues to raise with their
American counterparts, and the US side has done likewise,
according to Saran. Tata and US Co-Chair William Harrison
are to meet in Moscow and share their inputs, and Tata had
already met with Deputy Chairman of the Planning Commission
Montek Singh Ahluwali. Saran added that the proposal for a
January meeting in Delhi between Ahluwali and Assistant to
the President for Economic Policy Allan Hubbard worked well
for the MEA. The GOI was also anxious to move ahead with the
draft framework to accelerate US investment in India that the
GOI had submitted to US TDA on October 14, and Saran pointed
to Secretary Snow's upcoming visit as an opportunity to move
forward on a host of economic issues.

9. (C) Ambassador Mulford underlined that it is essential
the CEO Forum convenes before the POTUS trip. They should
not meet prematurely, however; they must be ready to be
productive when they meet. The US side is distilling their
agenda down to 4-5 major cross-cutting policy issues,
Ambassador Mulford reported, adding that they had risen above
corporate interests and would single out for attention the
macro-level problems hampering the flow of Indo-US trade and
investment. He said that further liberalizing financial
markets and services will be on the CEO Forum agenda, and
could have wide-ranging impact on how India finances major
projects like infrastructure improvements.

Trade Dialogue Evolving to Forum
--------------


10. (C) Saran proposed recasting the Trade Policy Dialogue
into a Trade Policy Forum. He said the GOI looks forward to
hosting USTR Portman, pending agreement on mutually suitable
dates.
Agriculture Dialogue Needs Direction
--------------


11. (C) Ambassador Mulford indicated that the Agriculture
Dialogue was important for the POTUS visit. However -- as he
noted in talking to interested food and agriculture firms and
universities at the Council on Foreign Relations in Chicago
-- many potential stakeholders are uncertain how to move it
forward. Saran replied that the TORs have been finalized,
the two sides have held several DVCs to sort out funding
issues and create 8-person boards, and all these items will
probably be finalized in November with a view to ensuring
deliverables for the POTUS visit. This issue is near the top
of the bilateral agenda per PM Singh. Jaishankar added that
the Indian side had passed a 60-page report on moving the
process forward.

Information and Telecomms Dialogue
--------------


12. (C) Saran reported that a senior Department of
Information Technology official would soon visit the US,
following successful DVCs that resolved the TORs. U/S Burns
shared that U/S Josette Shiner has been talking to US firms
about prospects in this arena.

Work Needed to Clear the Way for Civil Space Cooperation
-------------- --------------


13. (C) Turning to civilian space cooperation, Saran thanked
the U/S for the August 31 announcement that three Indian
space organizations were removed from the Entities List, and
repeated the GOI's call to remove the remaining Indian space
agencies. Such a move would garner excellent PR and would be
practical in order to realize "ambitious results" in space
cooperation, he added. Saran reported that the GOI had
received the US draft technology agreement on space launches
and the draft on commercial aspects, and hoped to have both
finalized as POTUS visit deliverables. The two sides had
some differences with the draft agreement on technical
assistance for launching US payloads, Saran continued, adding
that he hoped the September ISRO-NASA nondisclosure agreement
would suffice. Beyond the ISRO-NASA interaction, he asked
that space experts from MEA and the Department meet to narrow
differences. On sending an Indian astronaut on the space
shuttle, Saran said that Delhi had not yet received a formal
proposal from Washington, and asked for details of what is
envisioned, underlining that Indian astronauts would be
"extremely interested."


14. (C) U/S Burns responded that not only does an Indian
astronaut on a US shuttle provide excellent optics, it also
provides an opportunity for deeper cooperation between the
two space agencies. He outlined that the GOI would need to
identify several candidates to ensure at least one would pass
the series of qualifying examinations and complete the 4-5
years of required training, which would include multiple
visits and much practical cooperative work. The U/S also
noted that the GOI's financial obligation would be in the
range of $100,000/year. On the agreements, the U/S said we
are waiting for Delhi to sign the technical safeguards
agreement and the space launch agreement.

15. (C) PDAS Don Camp underlined that India launching an
American payload on the Chandrayan mission was important. He
explained that US law requires a technical assistance
agreement in the case of American payloads on non-American
spacecraft, despite ISRO's assertion that the regulations
should not apply because they are providing the space launch.
We have already presented our bottom line.

GOI Seeks Visa Facilitation for Space Scientists
-------------- ---


16. (C) Turning to a related subject, Saran told the U/S
that he still receives reports of Indian scientists having
their US visa applications denied or delayed, including
scientists traveling for USG programs. He continued that the
GOI is having difficulty convincing some scientists of the
benefits of the July 18 agreement, and these delays
perpetuate the image that the US views India "as a target,
not a partner." The U/S underlined that the applicable visa
regulations are global and not India-specific; that they
cannot be suspended for an individual country; and that a
critical factor is to allow a lead time of at least 14-21
days. DCM Robert Blake noted that the processing time for
scientists has come down from over 70 days to generally
around 14 days, demonstrating a significant effort on the USG
side.

HTCG a Defining Element of Indo-US Partnership
-------------- -


17. (C) Saran hailed the October 17 Indo-US Agreement on
Science and Technology as a July 18 deliverable and called
the HTCG "a defining element of the Indo-US partnership." He
added that the three foci for New Delhi were nanotechnology,
biotechnology, and defense offsets and technology transfer.

Democracy Initiative Shows Most Progress
--------------


18. (C) Calling the Democracy Initiative "the item that has
moved the farthest," Saran reported that the GOI had paid
half of its $10 million commitment in September. He is eager
to receive US ideas on how to take the Initiative forward,
particularly in Afghanistan. The GOI has identified Indian
training courses that could be offered under through the US
Democracy Fund. Saran said two items he had discussed with
U/S Dobriansky appeared promising: a bilateral event on
federalism and links with the Democracy Transition Center in
Budapest. The U/S responded that we need to go further on
democracy building, in Afghanistan and elsewhere.

Progress on HIV/AIDS Initiative
--------------


19. (C) Saran outlined that private sector involvement in
the HIV/AIDS Initiative is moving forward, including the
Federation of Indian Chambers of Commerce and Industry, the
Confederation of Indian Industry, and AmCham, with India's
ICICI bank to be the secretariat. He expressed appreciation
for the streamlining of FDA approval for Indian drugs to
combat HIV/AIDS, and reported that clearance time has dropped
from 1-2 years down to three months. The Health Ministry is
identifying collaborative partners to conduct clinical trial
research.

Earthquake Underscores Disaster Relief Initiative
-------------- --------------


20. (C) Saran reported that the Home Affairs Ministry has
yet to allocate sufficient funds to activate this initiative,
but mil-mil cooperation is proceeding: DoD and the Indian
Integrated Defense Staff have held joint disaster relief
exercises and joint training, and they continue with capacity
building and building capacity in third countries. The DCM
reiterated that PACOM is ready and willing to assist the
Indian Army relief work following the October 8 earthquake,
including perhaps providing airlift outside of the affected
region to free up Indian assets for work within J&K, but
India must make a request.

Robust Defense Acquisitions List
--------------


21. (C) Saran outlined several US systems the Defense
Ministry is considering, including multi-role combat aircraft
(MRCA),the P3-C Orion, and Patriot PAC-3. He reiterated the
GOI refrain that Delhi is primarily concerned that the US
remain a "reliable" defense procurement source. Saran listed
higher level technical clearances, co-development or licensed
production projects, outsourcing and offsets, and Indian
participation in the US global supply chain as key GOI goals.
He expressed his appreciation for progress on missile
defense cooperation, including the classified PAC-3 briefing.



22. (C) U/S Burns agreed that defense cooperation offers
enormous promise, and should play a larger role in the POTUS
visit. He singled out PAC-3 and the MRCA as being
particularly important. Ambassador Mulford underlined the
importance of Delhi expanding private sector offset
opportunities beyond the present, narrow government focus.
He recommended that Indian and US firms examine global best
practices and generate ideas for joint ventures to accomplish
the large offset percentages envisioned.
Boeing Sale to Air India
--------------


23. (C) U/S Burns asked Saran when a decision would be made
on the proposed Boeing sale to Air India (reftel),and
underlined the importance of the civil aviation relationship.
Saran responded that he would check on the status of the
Boeing tender.

Wildlife Conservation Cooperation
--------------


24. (C) U/S Burns noted the recent visit to India by DAS
McMurray and asked if there were avenues for cooperation on
wildlife conservation. Jaishankar, who had met with
McMurray, replied that there are transnational elements that
may lend themselves to cooperation, such poached tigers being
trafficked to China. Other possible prospects include joint
work on crime prevention and the spread or animal diseases.
He added that he would pass this offer on the wildlife
officials in the Ministry of Environment and Forests. DCM
Blake added that McMurray had had a productive visit and
would be drafting a paper with ideas for future cooperation
that the President and PM might announce.

PSI: It's Not Just the Core Group
--------------


25. (C) Underlining the importance of PSI to the global
nonproliferation system, U/S Burns noted that, with the
disbanding of the Core Group, India joining PSI would
underscore its non-pro credentials. Saran responded that,
beyond the Core Group issue, the GOI remains concerned over
the SUA protocols, and hoped the USG would "accommodate an
adjustment to take our points on the matter." Government
lawyers are still reviewing the legal obligations joining PSI
would impart on India. U/S Burns replied that we are aware
of India's SUA concerns, and noted that India is the only
major US partner not participating in PSI. Ambassador
Mulford pointed out the positive optics India would enjoy by
joining PSI, and that US skeptics of the civil nuclear
agreement may highlight India's non-participation following
the disbanding of the Core Group because they thought that
was Delhi's overriding concern over joining PSI -- although
the issues are not linked, they are also not completely
unrelated.

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


26. (C) The impression distilled from the overview of
bilateral relations is that the preliminary post-July 18
steps -- forming working groups and agreeing on agendas and
TORs -- are or soon will be completed, but much remains on
completing the agendas themselves. The GOI appears confident
that the working groups will close the gaps in time to
complete deliverables for the POTUS visit. Of particular
note, the GOI packaged the issue of F-16s for Pakistan more
as a matter of Delhi preparing to manage Indian public
opinion and less as an Indo-Pak issue. END COMMENT.

List of Participants
--------------


27. (U) GOI Delegation
Foreign Secretary Shyam Saran
Joint Secretary (Americas) S Jaishankar
Joint Secretary (DISA) Hamid Ali Rao
Political Counselor (Indian Embassy/Washington) Renu Pall
Director (Americas) Gaitri Kumar
Deputy Secretary (Americas) Santosh Jha
Under Secretary (Americas) Raj Srivastava


28. (U) USG Delegation
U/S Burns
Ambassador Mulford
Senior NSC Director John Rood
PDAS Don Camp
DCM Robert Blake
Political Counselor Geoff Pyatt
P Special Assistant Tobin Bradley
Poloff Howard Madnick (notetaker)


29. (U) This cable was cleared by U/S Burns.
MULFORD