EXPANDED CSLA SCOPE IS BLOCKING AGREED PROGRESS IN

C O N F I D E N T I A L NEW DELHI 001220 SIPDIS SIPDIS DEPARTMENT FOR SECRETARY RICE AND UNDER SECRETARY BURNS DEPARTMENT PASS USTR FOR AMBASSADOR PORTMAN E.O. 12958: DECL: 02/15/2015 TAGS: PREL ETTC ETRD KSCA TSPA KNNP IN OVIP POTUS SUBJECT: EXPANDED CSLA SCOPE IS BLOCKING AGREED PROGRESS IN SPACE REF: A. NEW DELHI 1173 ¶B. NEW DELHI 1063 ¶C. NEW DELHI 357 Classified By: Ambassador David C. Mulford for Reasons 1.4 (B, D) ¶1. (C) Summary: Approaching the President's visit to India, we need action by Washington principals in order to consolidate recent progress on civilian space cooperation and disentangle this from our trade agenda. The original NSSP goal to permit Indian launch of US satellites and foreign satellites containing US components is in danger of being stalled by the suggestion to expand the scope of a commecial launch agreement to include satellite services, which the GOI rejects as a unilateral change to the carefully negotiated NSSP quid-pro-quos. Without action to put satellite services on a separate track from our satellite launch agreement, there will be no space-related deliverable for the POTUS visit. Post strongly recommends that we allow the NSSP-initiated space launch agreements to come to a conclusion including the signing of the TSA and negotiations on a CSLA that encompasses only satellite launch services, an achievable goal before the President's arrival. We recommend that we continue discussing satellite services with India in other fora such as the Trade Policy Forum and the WTO/Doha Development Agenda. End Summary. ADDITION OF SATELLITE SERVICES THREATENS NSSP GOAL -------------- -------------- ¶2. (C) The NSSP narrative that then-DNSA Hadley outlined in 2003 called for allowing "Indian launch of foreign satellites containing US-licensed components, and US satellites," once we sign a space launch agreement. Successful negotiations on space launch resulted in unprecedented speed in achieving US and Indian agreement in January 2006 on a text for the Technical Safeguards Agreement (TSA) (Ref C). We understand that USG agreement on signing the TSA has now been linked to agreement of a Commercial Space Launch Agreement (CSLA), which includes not only launch services but also satellite services. The GOI objects to this "moving the goalposts" for concluding the agreed-upon roadmap for bilateral cooperation in space launches. ¶3. (C) MEA Joint Secretary S Jaishankar told the DCM and PolCouns on February 15 that the GOI's "final and official" interagency perspective is that the CSLA we proposed in January 2006 is "unnecessary" to fulfilling the space launch agenda. Jaishankar said that the Indian Space Research Organization (ISRO) is unwilling to even discuss the issue of satellite services in this context, adding satellite launches should proceed in a "market economy" like India's through agreements between the satellite companies. He reiterated the GOI view that a commercial satellite launch agreement could be encompassed in a one paragraph description of market principles. The US and India, he suggested, should focus on signing the TSA during the President's visit to officially open the satellite launch market, and address satellite services through out trade dialogue. Post believes that trying to add satellite services to the mix at this late date is a bridge too far for ISRO, the GOI, and an economy that is just now opening FM radio to private entrants. GOI WANTS TO COOPERATE DESPITE HOSTILE MEDIA ATTENTION -------------- -------------- ¶4. (C) The GOI, led by MEA, has made substantial progress since the commencement of the NSSP in changing the fundamental culture of ISRO to reach the point where the TSA negotiations took only a few hours of discussion. At a recent seminar in Bangalore, ISRO Director G. Madhavan Nair spoke enthusiastically about the partnership with the U.S., calling it central to India's international outreach. Since the inception of the NSSP, reactionary holdouts within the Indian space bureaucracy and in the media and policy community have savaged the concept of greater ties with the US, pointing to the progress that India's indigenous programs made without assistance from the West. The legacy of bitterness mingled with pride at US sanctions continues in the present debate, with commentators frequently referring to US actions to block the sale of Russian cryogenic engines in the 1990s as proof that American interest continues to focus on hobbling and/or displacing India's indigenous launch and satellite capabilities. US "INTRANSIGENCE" ON SPACE AS REASON TO DIG IN ON NUKES -------------- -------------- ¶5. (C) Critics of the July 18 President Bush-PM Manmohan Singh joint statement have recently dragged ISRO's willingness to engage with the US on space launch into the debate on civil nuclear cooperation, and have used the same language of "moving the goalposts" to oppose both tracks. While proponents point to ISRO's pragmatism and scientific openness (a point we endorse),opponents of the nuclear deal have accused ISRO of selling out India's domestic prowess in space launch vehicles and satellite construction in order to serve the political goal of closer ties with the US. They compare ISRO's "caving to political pressure" unfavorably with Atomic Energy Commission Anil Kakodkar's public statements (Refs A and B) drawing a red line on what India's nuclear establishment would not accept under hypothetical civil-military nuclear separation plans. If Washington is unwilling to make commercial cooperation easier in the space sector even after ISRO has made so many concessions, critics ask, why should India be willing to make concessions on its nuclear separation plan? COMMERCIAL OPPORTUNITIES COULD BE AT RISK -------------- ¶6. (C) A recent opinion piece by R Ramachandran argued that while ISRO has willingly firewalled its military and civilian programs, the US regulatory and licensing process remains so cumbersome that the "big promise of Indo-US space cooperation did not materialize largely due to Washington's intransigence." He highlighted how Boeing abandoned plans to cooperate with ISRO on 2-3 tonne satellites because of burdensome licensing requirements, upon which the European EADS swooped in to conclude an agreement on joint manufacturing in that class. Europeans are also forging ahead on commercial launches, with ISRO announcing in January that Astrium and Arianespace had agreed to launch two 2.5 tonne satellites on ISRO rockets. In the meantime, the Embassy has fielded inquiries from US-based companies asking about progress in US-India commercial space cooperation, as they too would like to establish a foothold in India. RECOMMENDATION: MOVE AHEAD ON LAUNCHES, LEAVE SATELLITES OUT -------------- -------------- ¶7. (C) Ambassador strongly recommends that we use the President's upcoming visit to New Delhi as an opportunity to sign the TSA and a CSLA that will focus solely on launch services, as agreed in the NSSP. It is clear that we will not get an Indian agreement to add satellite services to a process that was intended to clear the way for commercial space launches before the President's arrival in New Delhi, and maintaining their linkage will result in no space-related deliverable for the President's visit to India. We should continue to discuss satellite services, including non-discriminatory treatment of foreign satellite service providers, in appropriate fora including bilaterally in the services focus group of the Trade Policy Forum, and multilaterally in the Services negotiations under the ongoing WTO Doha Development Agenda. ¶8. (U) Visit New Delhi's Classified Website: (http://www.state.sgov.gov/p/sa/newdelhi/) MULFORD