CHARGE PYATT MEETS W. BENGAL COMMERCE AND INDUSTRY MINISTER

UNCLAS SECTION 01 OF 02 CALCUTTA 000386

SIPDIS

SENSITIVE
SIPDIS

DEPT PLS PASS USTR

E.O. 12958: N/A
TAGS: EINV ETRD IN PREL EAGR EIND ECON
SUBJECT: CHARGE PYATT MEETS W. BENGAL COMMERCE AND INDUSTRY MINISTER

REF: CALCUTTA 00369


1. (SBU) Summary. On August 29, Charge met with Government of
West Bengal (GOWB) Minister for Commerce and Industry Nirupama
Sen to discuss Communist Party of India - Marxist's (CPM) views
on economic development in the state and CPM policy perspectives
at the state and national level. Sen was emphatic in expressing
the GOWB's desire for U.S. investment, saying "We are for U.S.
investment." Sen also was very appreciative of the impending
Department of Commerce-led business delegation to Calcutta in
early December. He stressed that the CPM seeks investments in

W. Bengal and asked that "political statements about USG policy
positions" not be seen as indicators of CPM's lack of support
for U.S. investment. Commenting on the perceived differences
between national and state-level CPM policies, Sen said the
CPM's position was consistent with the "Common Minimum Program"
agreed to with the national-ruling United Progressive Alliance
(UPA). Charge also conveyed USG concerns about GOWB
restrictions on Frito-Lay's potato cultivation in the state.
Sen assured that the GOWB would not impede Frito-Lay's
operations in W. Bengal. The consistent theme in Sen's
interaction with Charge was the GOWB's strong interest in
promoting investment and industrial development in W. Bengal: a
message all the more striking coming from Sen, who rose to
prominence in the state CPM hierarchy as a noted Marxist
intellectual. End Summary.


2. (SBU) The Charge, accompanied by Calcutta CG, Poloff, and
FCS Officer, met with Minister Sen to discuss the CPM's
perspective on economic development in W. Bengal. Sen explained
that while land reform, tenant's rights and decentralization of
power were the goals of the CPM in the 1970's, modern W. Bengal
now needed industrial development. This development, because of
the finances needed, would depend heavily on private sector
investment. Sen cited examples of current foreign investment
projects from Japan and Indonesia as showing that the CPM had
the confidence of the people and was gaining support for
industrialization. He said that the GOWB sought investments
that: 1) create jobs; 2) expand the State's production
base/capacity; and 3) bring in new technology. Sen highlighted
priority areas for investment:
-- knowledge-based industries, such as pharmaceuticals and
petrochemicals;
-- IT, hardware as well as software;
-- automotive;
-- manufacturing, including iron, food processing, textiles,
leather, and gems/jewelry.


3. (SBU) Sen was aware that an FCS-organized business
delegation would be traveling to India in early December and
expressed great satisfaction that Calcutta was included in the
itinerary. He said that GOWB officials were looking forward to
meeting with U.S. business representatives. He added that while
the GOWB Commerce Secretary and Chief Secretary traveled to the
U.S. earlier in June to develop potential U.S. business interest
in the state, Chief Minister Buddhadeb Bhattacharjee was not now
planning to travel to the United States. The Commerce Secretary
had previously contacted ConGen to facilitate a CM visit to the
U.S. in October.


4. (SBU) When asked about apparent policy differences between
the CPM at the national level and in W. Bengal, Sen dismissed
the notion. He said that there was agreement in his party based
on the "Common Minimum Program (the Program)." The Program, he
said, allowed for a discussion of differences without permitting
departure from its principles. When pressed that it appeared
the CPM was consistently issuing negative statements, Sen
explained that the CPM opposed any policies that were outside
the Program, such as disinvestment of profitable, public sector
enterprises. Similarly, while not opposed to joint ventures,
the retail sector and the financial sectors shouldn't be opened
to foreign investment, as they weren't sufficiently "ripe."
(Note: Sen also answered the question of why the CPM supported
the United Progressive Alliance from the outside and not as part
of the coalition. He indicated that fundamentalist forces, both
Muslim and Hindu, were dangers to democracy. By remaining
outside the majority, the CPM could protect minority rights,
while remaining committed to secularism, democracy and the
Indian Constitution. End Note.) Charge stressed that given
the CPM's history, it was especially important that the CPM be

CALCUTTA 00000386 002 OF 002


clear and transparent in its policy statements to attract and
assuage concerns of potential U.S. investors.


5. (SBU) Charge also expressed concern about recent claims by
officials of the W. Bengal Agriculture Department that the
Atlantic variety potato seed introduced by Frito-Lay in the
state may be susceptible to fungal disease such as "wart"
(REFTEL). Charge noted that technical evidence clearly showed
that the seeds were free of disease and undue restrictions on
Frito-Lay would send a bad signal to other U.S. investors. Sen
assured that the Frito-Lay's operations would not be affected by
restrictions on its operations. Sen added that India needed to
identify and accept strict standards for analysis in these types
of cases, and suggested that U.S. Food and Drug Administration
standards should become the global standard. (Note: CG met
with Frito-Lay Operations Director Samiran Das, who said that an
understanding has been reached with the GOWB that would not
permit planting of Atlantic variety seed in the state's hill
districts. Das said that the restriction was a face-saving
measure for the Department of Agriculture as Frito-Lay was not
planning to plant in hill districts in any case.)


6. (SBU) Comment. Sen projected a positive tone in the
meeting, indicating his confidence that the CPM was seeing
success in its efforts to encourage investment. Aware, however,
that the CPM could not tone down it's often anti-U.S. positions
too quickly, he asked the Charge to separate the political
posturing from the fact that W. Bengal and the CPM were strong
supporters of economic engagement with the U.S. Sen's personal
transformation from noted Marxist intellectual in the state CPM
hierarchy to proponent of private sector-driven development is
strikingly emblematic of the transformation presently occurring
within the West Bengal CPM. End Comment.
JARDINE