BOND: CIVIL NUCLEAR DEAL FACES HURDLES IN US

C O N F I D E N T I A L SECTION 01 OF 02 NEW DELHI 002057

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/23/2015
TAGS: MNUC PREL ENRG EPET IR IN
SUBJECT: BOND: CIVIL NUCLEAR DEAL FACES HURDLES IN US
CONGRESS

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


1. (C) Summary: Senator Kit Bond (R-Missouri) told Minister
of State Anand Sharma on Wednesday, March 22 that the
civil-nuclear agreement faces stiff opposition in Congress,
and Americans of Indian descent should actively engage their
congressional representatives and urge them to support it.
Sharma emphasized India's "impeccable" non-proliferation
history and suggested US decision-makers take this record
into account when voting on the agreement. Sharma also
highlighted other areas of India/US cooperation, including
agriculture and military exchanges. The two principals
agreed that future collaboration on clean coal technology is
in the best interest of the US and India. Senator Bond
expressed support for increased US military sales to India,
including co-production, and hoped that the GOI would
seriously consider the F-18 under the upcoming fighter
tender. Discussing FDI into India, the Ambassador noted
that, while the investment climate in India is good, greater
deregulation would create a "virtuous circle," resulting in
more investment in the country. End Summary.

Nuclear Agreement Faces Hurdles, None Insurmountable
-------------- --------------


2. (C) Noting the drastic "paradigm shift" in US-India
relations in the three years since his last visit to the
subcontinent, Senator Bond expressed qualified support for
the civil-nuclear agreement announced by President Bush and
Prime Minister Singh on March 2. He acknowledged that in
Washington's current political climate, passage through
Congress is not assured, as partisan politics come into play.
The Senator suggested that mobilizing the influential
Indian-American diaspora may be a key to the agreement's
passage. Sharma, acknowledging political realities, noted it
would be "rather sad if the nuclear deal fell victim to
partisan politics."


3. (C) Asserting that India has an "impeccable" record on
non-proliferation, Sharma urged the US to view the nuclear
plan "in an environment of trust." He also suggested Senator
Bond inform his Congressional colleagues that the GOI has a
credible separation plan, that places 65 percent of Indian
nuclear facilities under international safeguards. Sharma
also emphasized that India's Parliament discussed the nuclear
agreement and passed it without changes.

Cooperation in Agriculture, Military and High-Tech
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4. (C) Sharma noted that the de-enstrangement of US-India
relations has resulted in extensive cooperation in many
fields, including agriculture, high technology, and military
exchanges. He thanked the US for its help during the "first
green revolution," which helped India become self-sufficient
in food production, and hoped further US cooperation would
result in a second green revolution. Sharma remarked that
much of India's agricultural produce goes to waste due to a
lack of infrastructure and processing capabilities, and that
India would benefit by investment in these areas. Senator
Bond indicated the importance of bio-technology in modern
agriculture and asked that the GOI conduct a swift analysis
of BT (Bacillus Thuringiensis) corn, and inform the USG if it
finds any problems with the commodity. He also emphasized
the importance of import and plant health standards,
specifically for wheat, that do not favor certain countries'

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production over others.


5. (C) Sharma remarked that the recent increase in India/US
military exercises and exchanges exemplifies the new
relationship. "Our pilots have flown together, there have
been numerous exchange programs between our armed forces and
this type of cooperation will only increase," Sharma noted.
Senator Bond replied that he hoped the GOI would seriously
consider the F-18 to fill the planned multi-role fighter
aircraft upgrade, indicating he supported inclusion of the
AESA radar and potential co-production. "It is in our mutual
interest to ensure your AIR FORCE is equipped with the very
best aircraft," Senator Bond asserted. Sharma indicated that
the acquisition would be based on "globally competitive bids"
and that he was confident that this area of our relationship
would surely grow in the future. Sharma urged the Senator to
broach this topic with Defense Minister Pranab Mukherjee
(septel).


6. (C) Acknowledging US and Indian vast coal resources,
Senator Bond and Sharma agreed that cooperation on clean coal
technology was in the both countries' mutual interest.
Sharma also highlighted recent cooperation between the Indian
Space Research Organization (ISRO) and NASA, commenting that
it was unfortunate that the nuclear agreement has
overshadowed such important collaboration.

Private Sector Investment Key to Indian Growth
-------------- -


7. (C) Indicating that lopsided development could lead to
social unrest, Sharma stated that increased investment in
rural areas is vital for India's future. "Over 60 percent of
Indians still live on subsistence agriculture," Sharma
reported, and much of the exces3 food produced spoils due to
a lack of processing capacity and poor infrastructure.
Increased investment in food processing technology and the
transportation system would be beneficial, he proffered.
Senator Bond concurred, noting that if the GOI builds the
necessary regulatory framework, this investment will come.
"If U.S. businesses believe they will get fair treatment,
they will want to invest in India," he asserted. The
Ambassador introduced the concept of the "virtuous circle,"
commenting that "good rules end up generating good
investment." He noted that Indian FDI figures have begun to
demonstrate this, and that greater deregulation would
expedite private investment. Sharma indicated that "some
constituents have reservations" concerning FDI, but concluded
that India, being a democracy with an active media and
independent judiciary, is a safe investment.


8. (U) Codel Bond cleared this message.


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