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