CODEL KERRY PROBES FOR AN INDIAN BOTTOM LINE ON

C O N F I D E N T I A L SECTION 01 OF 04 NEW DELHI 000264 SIPDIS SIPDIS E.O. 12958: DECL: 12/02/2015 TAGS: PREL KNNP ENRG PTER ECON IR PK CH IN SUBJECT: CODEL KERRY PROBES FOR AN INDIAN BOTTOM LINE ON NUCLEAR SEPARATION Classified By: Ambassador David Mulford for Reasons 1.4 (B, D) ¶1. (C) Summary: In a January 11 meeting with visiting Senator John Kerry, Prime Minister Singh underlined India's intention to fulfill the terms of the July 18 civil nuclear understanding, but rebuffed the Senator's effort to explore enhancements to the deal that might help to minimize Congressional resistance. Singh offered a strong defense of our bilateral relationship, highlighting execution of the civil nuclear deal as the single most important step that we could take to capitalize on Indians' favorable attitudes towards the US. Asked about retail market opening, Singh reiterated his support for liberalization, but cautioned that progress would be difficult in the next three to four months leading to state elections. Responding to Senator Kerry's expression of appreciation for India's rapprochement efforts with Pakistan, Singh highlighted recent acts of terrorism against India and lamented that President Musharraf has not yet delivered on his promise to end the use of Pakistani territory to foment terrorism. Singh appeared anxious about the looming crisis over Iran, noting that Muslim voters would play an important role in upcoming state elections. He offered a cautious assessment of China's future role in the international system. End Summary. ¶2. (C) A relaxed and well prepared Prime Minister Singh met Senator Kerry for 50 minutes at his personal residence. Joined by most of his PMO team, Singh offered both a historical reflection on the progress in Indo-US relations and an up-to-the-minute review of developments in our civil nuclear discussions. Reprising a familiar theme, Singh emphasized his goal of delivering development for the Indian masses and "writing a new chapter in our bilateral relationship" that takes advantage of the fact that there are "no bilateral issues that divide us." The PM pointed to the CEO forum, the US-India Democracy Initiative and our newly launched Energy Dialogue as examples of a new relationship that is based not on aid but convergent interests. Singh noted that many thinking Indians still "nurse a grievance over the restrictive regimes that denied India access to technology" and underlined that if we can put that issue behind us "the sky's the limit" in terms of "knitting our two countries together." Nuclear Limits -------------- ¶3. (C) Senator Kerry offered a strong endorsement of Singh's vision for India and US-India relations, but also noted his long involvement on issues of nuclear proliferation before the Senate, and asked for the Prime Minister's ideas about how the July 18 framework might be strengthened to maintain a consensus within the Nuclear Suppliers Group and win Congressional backing. The Prime Minister reiterated India's commitment to civil military separation and cited the WMD bill as an example of the GOI's strong commitment to export controls. India's record on onward proliferation, he added, is stronger than some NPT members. Unlike other states in Asia, the PM pointed out, India does not enjoy a nuclear umbrella provided by the US, and "has to maintain a strategic program to defend itself." Nonetheless, the PM concluded, it is reasonable for the international community to demand that NEW DELHI 00000264 002 OF 004 assistance provided to India's civilian program is not diverted to military purposes and does not undermine the global non-proliferation regimes. ¶4. (C) Senator Kerry underlined that he is not among those who believe that India can be forced into the NPT framework. "India is a nuclear state," he added, with "clear security concerns vis-a-vis Pakistan and China." But how do we deal with Iran and North Korea? How, the Senator asked, might the July framework be adapted to "diminish this moral ambiguity?" Could India do more, for instance, on fissile material? And what are India's long-term intentions for its weapons program? The PM shot back that India would support a global fissile material cut off as promised in the July 18 joint statement. India's nuclear doctrine is transparent and fundamentally defensive. Already, he noted, India has adopted a unilateral moratorium on testing and committed to no first use. "What we can place under safeguards will be clear," the PM underlined, pointing to the upcoming visit by Undersecretary Nick Burns. ¶5. (C) Senator Kerry pressed again, asking what more might be done to ensure that dual use commodities are not diverted to India's weapons program. Also relevant, he added, is the question of what exactly India had in mind when it pledged on July 18 to behave as "a responsible state with advanced nuclear technology." The Prime Minister underlined that these questions would be addressed through India's safeguards commitment. India also should be judged on its past record, the PM advised, appealing for the Senator to trust the GOI's solemn assurance that international assistance will not be misused. Responding to Senator Kerry's concern about precedents for Pakistan, Iran or North Korea, Singh emphasized that India is "a different case, with an open society, a parliamentary system and all great religions living together." Look at China's record, the PM asked, arguing that "India has been a victim of discrimination." "We will not be a source of proliferation," the Prime Minister concluded, underlining that at certain times "in human affairs relations have to be based on an act of faith." Questions over China -------------- ¶6. (C) Responding to Senator Kerry's question about China, the Prime Minister reflected on his recent meetings with the PRC leadership to conclude that the challenges of development "will keep them busy for the next 15-20 years." What the leadership stance will be beyond then "is a question mark." China's capabilities, he noted, are a fact, whereas "its intentions are speculation." As China emerges as a major global player, India wants to ensure that the PRC complies with a "rule based" international system. But for now, Singh reiterated, "no one knows what the actions of the new Chinese leadership will be" and India must weigh all possibilities. The GOI is trying to build bridges to Beijing. Trade is increasing and border talks are proceeding. But the fact is, the PM added, China provided the major source of support for Pakistan's nuclear weapons program and continues to offer strong political backing to Islamabad. Spreading Terrorism NEW DELHI 00000264 003 OF 004 -------------- ¶7. (C) Turning to the Indo-Pak peace process, the Prime Minister outlined his goal of "making borders irrelevant" to the bilateral relationship. Reviewing India's history with partition, the PM emphasized the unacceptability of "redrawing borders" yet again. Beyond that, he argued, there is broad scope for easing cross border communication. Highlighting the linkage that India draws to terrorism, the PM remarked that "if Pakistan lives up to its commitment" not to allow its territory to be used for terrorism, "then we can move forward." However, citing the October 29 bombings in Delhi and the recent terror attack in Bangalore, Singh complained that groups like LET and Jaish-e-Mohammed continue to operate from Pakistan. Now, he added, "they have come up with a new face, distributing relief to gain new respectability," but they have not abandoned terrorism. In this context, the PM said, he has pressed Musharraf to live by his commitments and has outlined a future where the two countries live in peace. Elaborating on his recent feelers to the Kashmiri opposition, the PM explained J&K's special place in the Indian constitution, pointing to the 2002 elections as evidence of GOI commitment to ensuring representative government. ¶8. (C) Responding to Senator Kerry's question about why Musharraf was not coming down harder on terrorism, Singh cited Pakistan's lack of civil society institutions. Lamentably, he added, the country's strongest institution is the Army, and the basic problems in bilateral relations reside in "the mindset of the armed forces." Anxious Over Iran -------------- ¶9. (C) Responding to Senator Kerry's appreciation of India's support on Iran, Singh underlined India's opposition to Tehran's nuclear ambitions. That being said, India is a country with 150 million Muslims and 25 million Shia. Moreover, he cautioned, elections are coming up in three to four months in states with significant Muslim populations (West Bengal, Kerala and Assam). "I have to be sensitive to this," the PM warned, while also reiterating that India has "no difficulty with the broad principle" that Iran must comply with its NPT obligations. Asked how India might vote if the issue moves to the Security Council, the PM pledged that India "will work towards an international consensus." On the basic principles, he concluded, "there will be no compromise." Prospects for Economic Reform -------------- ¶10. (C) Responding to Senator Kerry's question about how to accelerate economic ties, the Prime Minister ticked off a series of recent reform steps, including "a major opening in railways" (to allow private ownership of containers),the existing liberal regime for food processing, and his personal interest in moving ahead with liberalization of the civil nuclear sector "to allow Americans to invest in nuclear power." The PM explained that the government is looking hard at retail market opening, but faces stiff resistance from NEW DELHI 00000264 004 OF 004 small shopkeepers. He argued that the best answer to this "fear of the unknown" is to create a situation where overall employment is growing rapidly. Recalling a recent meeting with Wal-Mart's CEO, Singh remarked that "elections are coming up in the next three to four months so I don't know if we can advance, but I'm still hopeful." Civil Nuclear Linchpin -------------- ¶11. (C) Responding to Senator Kerry's question about the most important step we could take to fulfill the potential of US-India relations, the PM responded instantly operationalize our nuclear treaty." The PM reiterated that among "thinking Indians" there is lingering resentment that the US thwarted New Delhi's nuclear ambitions while abetting China's. In that context, the civil nuclear deal is "the biggest single step to convince people that the US now has a different mindset." India, he noted, has benefited enormously from US generosity over the years, including an important US role in establishing the GOI's agricultural universities and launching the green revolution. After the 1974 nuclear tests, he lamented, this relationship was lost. My goal, the PM concluded, "is to put it back on the rails." ¶12. (U) Visit New Delhi's Classified Website: (http://www.state.sgov.gov/p/sa/newdelhi/) MULFORD