MEA PROVIDES A/S BOUCHER WITH TOUR D'HORIZON OF

C O N F I D E N T I A L SECTION 01 OF 08 NEW DELHI 002496

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E.O. 12958: DECL: 03/26/2015
TAGS: PREL PTER ENRG ETRD PBTS MOPS ELTN EPET KDEM
PHUM, EAIR, EAID, UNSC, IN, IR, IZ, PK, CE, KZ, KG, TI, TX,
BG, NP, GT, VE
SUBJECT: MEA PROVIDES A/S BOUCHER WITH TOUR D'HORIZON OF
INDIA'S REGIONAL RELATIONSHIPS

REF: A. NEW DELHI 2367

B. NEW DELHI 2229

C. DHAKA 1159

D. DHAKA 1053

E. SECSTATE 49445

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Classified By: A/DCM Geoff Pyatt for Reasons 1.4 (B, D)


1. (C) Summary: Over an April 7 lunch, MEA regional Joint
Secretaries provided Assistant Secretary Richard Boucher with

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a review of India's relations with its neighbors in South and
Central Asia. Boucher probed them specifically on Nepal,
Pakistan (including Kashmir),Afghanistan, Central Asia,
Iran, Sri Lanka, Iraq, Bangladesh, and Guatemala-Venezuela.
The Foreign Ministry officials emphasized the need to
maintain close coordination on Nepal
policy to isolate the King and direct the Maoists into the
political process, the importance of stability and financial
viability in pursuing trade and energy opportunities in
Central Asia, and the necessity of continued pressure on
Bangladesh for free and fair elections and continued
counterterrorism efforts. Giving their read of the current
state of play in the region, the officials also raised
perceived Pakistani intransigence as a hurdle to India's
regional development efforts and offered low expectations of
the Sri Lankan peace process. Finally, the MEA took on board
A/S Boucher's points on the importance of managing India's
relationship with Iran, the value of Indian involvement in
Iraqi police training, and were receptive but noncommittal in
response to our request for support for Guatemala's bid for a
non-permanent seat on the UNSC.

Nepal: Let's Stick Together
--------------


2. (C) J/S (Americas) S. Jaishankar opened the discussion on
Nepal by underlining two elements from A/S Boucher's
conversation with Foreign Secretary Saran (Ref A): the US and
India should avoid any activity that would signal a deviation
from their established policy line, and India is the country
that would be most affected if the Nepalese Maoists continue
to make gains against the Nepalese government. J/S Pankaj
Saran (Nepal/Bhutan) gave a short briefing of chronological
trends and indicators in Nepal: momentum for anti-monarchy
demonstrations traditionally ratchets up in April-May, the
period in 1989-90 in which democracy was restored, and also
the lead-up to the monsoon and holiday season, when violence
would normally ebb. This pattern suggests the window of
opportunity for the democracy movement lies in the few weeks
before June. Political agitation in Kathmandu Valley and
City has started and has been "successful," although there
had been many arrests in the past few days, and a rally
originally slated for April 8th was pushed back to the 24th.
Meanwhile, the Maoist cease-fire is holding in the Kathmandu
Valley.


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3. (C) The King has hinted that he wants to open up to the
parties, Saran continued; "We hear him but we don't believe
him," Saran remarked. Renewing the Terror and Detection
Ordinance on April 3 and adding new, "sweeping" provisions
was a discouraging sign, he reported. Saran observed that
international opinion is moving in our direction, with
Beijing and Tokyo now adopting the US-India language on
Nepalese democracy.

No Bullets Please
--------------


4. (C) Joint Secretary Saran underlined the Foreign
Secretary's earlier comments to A/S Boucher, noting that

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transferring ammunition to the Royal Nepal Army (RNA) would
send a political signal that would far outstrip the material
benefit that could accrue to the RNA. The Army's problems
lie more in poor discipline and motivation than in
diminishing stocks, Saran argued, and the Maoists arm
themselves largely through weapons stolen or otherwise
acquired from the RNA. Highlighting New Delhi's concerns
about additional arms transfers to the RNA, Saran noted that
among the most significant known collaboration between
Nepal's Maoists and India's (Naxals) are arms sales by
Nepalese Maoists to their Indian counterparts, "on commercial
terms, not based on ideological fraternalism." (NOTE: Saran
reported the Indian government held several inter-agency
meetings to assess links between Nepalese and Indian Maoists,
and they could corroborate only the arms sales connection.
They also judged the Maoists would only win 10-15 percent of
the vote in free and fair elections, a fraction that has
decreased in recent months, he added. End Note.).
Nevertheless, Saran assessed the Army is Nepal's most
important institution, which is taking on a more divisive
character as it is viewed less as a national army and more as
the King's instrument that is unable to go out against the
Maoists and instead is turned on the political parties.

No Daylight Between Us
--------------


5. (C) A/S Boucher noted that it would be helpful for India
to take further steps to stop arms flows to the Maoists,
whether commercial or ideological, while emphasizing the
importance of isolating the King in order to further
legitimize the political parties. Saran responded that
Kathmandu would pick up on any rift between Delhi and
Washington, so staying in sync was of utmost importance. A/S
Boucher raised the idea of India and the US hosting a meeting
with the political parties, excluding the Maoists, and Saran
and others commented that this could be a very useful tool.
The Indian government is putting its money behind supporting
the political parties, and believes we should treat the
parties as a government-in-waiting, he suggested. The King
only reacts under pressure, and the isolation since February
2005 has not yet achieved its goal, Saran continued; since

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the Indian government finds it difficult to pronounce on what
the King's role in government should be, it would be helpful
to make it a "matter of discussion" between Washington and
New Delhi.

Central Asia: Access, Energy, and Democracy
--------------

6. (U) Boucher explained that the first stop on his trip was
to Kabul, in part to attend a conference hosted by the Afghan
government and Johns Hopkins University. The United States
is very interested in the prospects of bringing electricity,
goods, services, and people between South and Central Asia,
now that Afghanistan no longer serves as a barrier. He
explained that we think energy can be moved from Kazakhstan,
Kyrgyzstan, and Tajikistan, through Afghanistan, to Pakistan
and India.


7. (C) J/S for Eurasia Bhagwati took note of the recent U.S.
Trade Development Agency (USTDA)-sponsored South/Central Asia
Conference in Mumbai. He was upbeat on India becoming a
source and a market for energy throughout South and Central
Asia, though he noted that, for the time being, the Indian
government focus was on projects across the Indo-Pakistan
border. In addition to a host of regional political issues
that need to be factored into energy diplomacy, Bhagwati
underlined the importance of regional stability to ensure the
security of large energy projects, noting that many proposed
projects traverse conflict-prone regions.


8. (C) Bhagwati emphasized the key role improved transport
links could play. He noted that few Indian air carriers fly
Central Asian routes as they are difficult to make
commercially viable. Indeed, several routes have been
canceled recently. Some of the more successful carriers
route through the Gulf as their hub; Uzbekistan's carrier
remains viable not for its Delhi-Tashkent traffic but because
an onward flight provides the least expensive connection to
the UK (Birmingham),Bhagwati reported. Overland access is
more difficult yet, he continued -- shipments from the sea
originate in the Pakistani port of
Gwadar, which is "hard to get to," and both roads and rail
require significant investments.

It's a Gas, Gas, Gas
--------------


9. (C) Turning to energy, Bhagwati said it was critical,
though difficult, to "get energy firms excited about Central
Asia." The government of India will continue to attend the
Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas
pipeline conferences, although Delhi remains skeptical about
Turkmenistan's level of reserves even in the wake of its
agreement to supply gas to China. Noting the opportunities
in local cross-border electricity projects, A/S Boucher
brought to Bhagwati's attention the USTDA-sponsored Istanbul
electricity Conference to be held in June, and said he would

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forward details. Bhagwati was responsive to the suggestion
of Indian attendance.

Democracy Cooperation
--------------


10. (C) To A/S Boucher's question of India's assessment of
Kyrgyzstan's political prospects and how India could help
stabilize it, Bhagwati gave a mixed response. Prospects are
improving, and the population is relatively small (five
million),but the leadership (and the population) is divided
by ethnic and tribal loyalties. He prescribed a multi-year
civil society-building plan including training in English and
the information technology sector to improve the country's
economic potential.


11. (C) According to Bhagwati, Tajikistan joins Kyrgyzstan
near the bottom of the per capita economic charts; he also
reported a rise in open displays of Islam, such as Ramadan
fasting and women wearing hijab, which he did not describe as
prima facia reasons for concern but as indicators that bear
close scrutiny.


12. (C) On Kazakhstan, Bhagwati said he "does not see
President Nazarabayev smoothly transferring power outside his
family or clan;" he "does not have the mental make-up for
multi-party democracy" and will continue playing one power
against another, remaining sensitive to China and Russia.


13. (C) Bhagwati noted the sensitivity of Central Asian
countries to sovereignty issues. He indicated that India
would be willing to help some of these governments with their
democratic transitions, but would insist on doing so quietly,
as India did not even share a border with any Central Asian
state. China and Russia both border Central Asia, Bhagwati
continued; Russia also shares history with the region, and
China is further tied through labor flows and immigration.
He cautioned that these factors within and around Central
Asia could risk Indian assistance being "counterproductive."

Pakistan and Afghanistan: Security and Attitudes
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14. (C) J/S for Pakistan, Afghanistan and Iran Dilip Sinha
stated that successful Indian engagement with Central Asia
requires security along the Pakistan-Afghanistan border and a
change in Islamabad's rigid and unhelpful attitudes toward
transit trade (which currently enjoys only one-way access,
from Afghanistan to India, despite Pakistan's South Asian
Association for Regional Cooperation (SAARC) obligations).
Relations between Islamabad and Kabul have been strained,
though they are improving now, he assessed. He argued that a
"symbiotic relationship" between the Army and fundamentalist
clergy threatens to cause continued instability in Pakistan's
relations with its neighbors.


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15. (C) Sinha asserted that Musharraf is not serious about
clamping down on Islamist groups active near the border with
India, even if the Pakistani government is taking action in
the tribal areas near the Afghan border. Furthermore, Sinha
concluded that until the security situations in Pakistan and
Afghanistan are addressed, "there will be no investors for
anything," no roads, no pipelines, even though the market
exists for goods and energy. He observed that Afghanistan
has grown less secure over the past year, and that the
"constant threat" to Indian companies working there has
adversely affected India's road projects. For instance,
India is currently unable to deploy workers on the northern
side of its Zaranj-Delaram road project. A/S Boucher added
his assessment that the next year would see an increase in
violence in Afghanistan, as a result of expanded NATO
operations into Taliban territory. Sinha listened, but did
not comment on A/S Boucher's observations about the improved
tone of Pakistan-Afghanistan relations and President
Musharraf's efforts to crack down on the Taliban.

Glacial Progress
--------------


16. (C) To A/S Boucher's question on possible progress in
demilitarizing Siachen Glacier, Sinha reiterated the Indian
formula that the current ground positions of the troops would
have to be authenticated before any withdrawal and creation
of a demilitarized zone. He evinced some flexibility on
resolving the border dispute along Sir Creek, advocating that
Delhi and Islamabad should settle each of the three segments
in turn (the horizontal portion, the creek, and the maritime
boundary, rather than try to settle the entire region in one
fell swoop). Sinha was upbeat on the growth of
people-to-people contacts between India and Pakistan, but he
criticized Musharraf and the government of Pakistan for not
moving forward quickly on issues on which the two sides
already concur. He castigated the Pakistan Army for,
according to the International Crisis group report,
preventing civil society aid for victims of the October 8
Kashmir earthquake, in order to allow jihadi terrorist groups
to garner local goodwill by being the dominant aid providers
(along with the Army) for the first weeks after the quake.


17. (C) Turning to Pakistan's domestic political
environment, Sinha asked A/S Boucher for his assessment of
prospects for free and fair elections, and democracy, in
Pakistan. Sinha listened attentively as A/S Boucher noted
that Musharraf is likely to be generally straightforward, and
that the US will be watching for a good and independent
central election commission to play an active role in the
polls.

Iran: Again, Energy and Access
--------------


18. (C) In response to A/S Boucher's observation that the

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Iran showdown might lead to a request for a Chapter VII
process, along with his caution that Indian interactions with
Iran are viewed very closely by the US government and
Congress, Sinha detailed the several axes of India-Iran
relations. Iran is needed to access Afghanistan for aid
delivery and reconstruction in the absence of transit rights
through Pakistan, and Sinha noted his concern that in the
event of hostilities with Iran, India's transportation links
would become "a road to nowhere." Jaishankar flagged India's
need for Iranian natural gas and, with Afghanistan's
infrastructure still under repair, Iran's value as a land
bridge to Central Asia. He asked that India not be required
to demonstrate deteriorating relations with Iran in parallel
to its improving relations with the US. Picking up on
Secretary Rice's testimony in Congress last week, Jaishankar

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noted that "a lot of countries have ties with Iran...the US
can't have unrealistic expectations, and you don't make
demands of the UK or Japan." Sinha compared US concerns over
Indo-Iranian relations with India's apprehension regarding
the US-Pakistan relationship. Both Sinha and Jaishankar
reassured A/S Boucher, however, that the government of India
is aware of the situation's fragility, and Jaishankar
concluded, "we don't want it to get any more complicated."
They emphasized that the most recent Iranian naval ship visit
before the one in late March 2006 had been two years prior.

Sri Lanka: Low Threshold for Success
--------------


19. (C) J/S for Bangladesh, Sri Lanka, Maldives and Burma
Mohan Kumar expressed the MEA's low expectations of the
second round of talks between the Sri Lankan government and
the LTTE, noting that President Rajapakse's efforts to extend
development assistance in LTTE areas is not getting traction
because Prabhakaran's single objective is disarming rival
rebel leader Karuna. Kumar concluded that the best case
outcome is that the second round of talks leads to a third.
He revealed that the Norwegian Ambassador to India expected
the same outcome, but that the envoy was concerned about the
safety of the LTTE delegates to the talks. Kumar observed
that the real problem in Sri Lanka was "the LTTE's frenzied
acquisition of arms," and he cited the recent suicide attack
on a Sri Lankan ship as evidence that "the area is almost
impossible to patrol." In response to A/S Boucher's hope
that the second round would solidify the current ceasefire,
Kumar remained dismal, concluding that he would be "happy if
this ceasefire holds" because he does not expect it to
strengthen.

Keep Pressure on Bangladesh for Elections, CT
--------------


20. (C) Moving on to Bangladesh, Kumar hoped the US would
continue to press Dhaka on free and fair elections and
counterterrorism efforts. He credited US and international
community pressure as the main reasons for the government of

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Bangladesh's recent arrests of Jammatul Mujahedin Bangladesh
(JMB) leaders Bangla Bhai and Sheikh Abdur Rahman (Refs B, C
and D). In response to a request from Kumar, A/S Boucher
reported that DAS Gastright's meetings in Dhaka last week
went very well. He noted that the opposition Awami League is
willing to work in the parliament, which is a good signed.
At the same time, A/S Boucher assured Kumar that the US is
trying not to be sanguine, and that Ambassador Butenis is
very aware of the challenging situation. A/S Boucher told
Kumar that the US shares the government of India's concerns
about prospects for free and fair elections and continued
progress on counterterrorism, and he pointed out that the US
is actively supporting the elections and providing training
on counterterrorism. Kumar asked if the BDG had shared
Bangla Bhai or Abdur Rahman's confessions with us, noting
that "nothing is coming out." A/S Boucher offered to check
with the FBI on whether they had gotten any debriefs and get
back to the MEA on this issue.

Guatemala: Yet to Respond on Pitch for UN Seat
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21. (C) Jaishankar responded to A/S Boucher's request for
early and public support for Guatemala's bid for the Group of
Latin American Countries (GRULAC) UNSC seat by noting that he
had seen the demarche and the issue was probably with the
MEA's UN Division. He offered to find out where India stands
and get back to us.

Iraq: Prefer Police Training in India Rather than Jordan
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22. (C) On the topic of Indian experts training Iraqi police
officers at the International Training Facility in Jordan,
Jaishankar explained that the GOI would be more comfortable
conducting training in India. Among his concerns were
possible repercussions against the approximately 3.5 million
expatriate Indians living in unguarded housing in Gulf
countries, who he described as "exposed pigeons." Still, he
agreed to follow up on our earlier demarche regarding the
Amman Center.

Comment: Frank Discussion Reaffirms Positive Relationship
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23. (C) Although the Foreign Ministry officials did not
always agree completely with the US view of the range of
issues raised at the lunch discussion, the candid and broad
ranging exchange emphasized the strikingly positive tenor of
the US-India relationship. The focus of each of the joint
secretaries was on areas of cooperation, even in the

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complicated cases of Iran and Pakistan. We are seeing in
these interactions the fruits of the President's efforts with
India.


24. (U) Assistant Secretary Boucher cleared this cable.

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