NSA NARAYANAN MULLS SENATOR KERRY'S SUGGESTIONS ON

C O N F I D E N T I A L SECTION 01 OF 04 NEW DELHI 000294

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E.O. 12958: DECL: 01/11/2016
TAGS: PREL PGOV ENRG MNUC KNNP SENV PTER IN PK CH
SUBJECT: NSA NARAYANAN MULLS SENATOR KERRY'S SUGGESTIONS ON
CIVIL NUCLEAR DEAL

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


1. (C) Summary: In a January 11 meeting with visiting
Senator John Kerry that focused exclusively on the civil
nuclear agreement and nuclear non-proliferation, NSA MK
Narayanan reiterated the GOI's support for its draft
separation plan, and allowed that New Delhi "will not
backtrack" on obligations under the Fissile Material Cut-off
Treaty (FMCT) if/when it comes into force. Narayanan and
his staff listened to Senator Kerry's proposals to enhance
the civil nuclear agreement to secure Congressional and
Nuclear Suppliers' Group
(NSG) acceptance, but pointed to India's "two hostile nuclear
neighbors" and the need for the deal to "pass muster in
Parliament." Additional safeguards on nuclear facilities
feeding into India's strategic program would be unnecessary,
Narayanan argued, because over time the percentage of those
unsafeguarded reactors would diminish as the US-India
agreement takes effect and as new safeguarded civilian
reactors come on line and an FMCT enters force. End Summary.

THE CIVIL NUCLEAR ENERGY AGREEMENT
--------------


2. (C) Senator Kerry opened by telling Narayanan he
supported the July 18 framework and the civil nuclear
agreement conceptually. Pointing out Congress'
Constitutional role in US foreign policy, Senator Kerry
mentioned he wanted to help package the civil nuclear
agreement in a manner that would facilitate a swift and
strong Congressional approval consistent with the NSG, MTCR,
and the US Atomic Energy Act. To Narayanan's comment that
the GOI had not yet heard a response to the plan Foreign
Secretary Saran passed to U/S Burns, Ambassador Mulford

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answered that the plan as presented did not yet meet USG
standards in certain areas, and the GOI will be notified as
soon as a USG interagency team finishes defining its minimal
criteria. Senator Kerry underlined that he thinks the
agreement in principle enjoys bipartisan support and the USG
is not trying to make the process difficult, but is trying to
satisfy countries like Japan, Taiwan, and South Korea, who
abandoned their military nuclear plans to sign the NPT, and
to maintain the moral high ground with prospective
proliferators like Iran.


3. (C) Referring to the July 18 agreement as a "crucial
element" in transforming US-India relations and
characterizing the civil nuclear agreement as "one of the
mos important, if not the most important" aspects to stem
from the PM's meeting with the President on July 18, 2005,
Narayanan responded that he thought the plan as presented
fulfilled the precepts of being credible, feasible, and
transparent. He admitted that the Indian and US perceptions
may differ, but the plan was an honest and sincere effort by
New Delhi. Narayanan added that neither the GOI nor "any
reasonable Indian" perceives the US as "holding back,"
adding, "even the Left does not raise the issue of the US
pulling the rug out." The plan Saran presented, he
explained, was drafted with two goals: (1) for external
parties, "to convince those who needed convincing that our
non-proliferation is serious," and (2) for the domestic
audience, to overcome India's energy deficit. To address
proliferation concerns, Narayanan mentioned that "we ex
pect a quantum jump in safeguarded versus unsafeguarded

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facilities," although he allowed that "we may have to adjust
the numbers in upcoming negotiations" without altering the
broad contours of the agreement.


4. (C) Senator Kerry cautioned Narayanan that additional US
criticism of the civil nuclear deal has not yet surfaced, but
he predicted it would, including from the environmental
lobby. To Narayanan's remark that nuclear power would move
India away from coal, Senator Kerry pointed out the
environmental concerns over nuclear waste.

How Much Deterrent is Enough?
--------------


5. (C) Senator Kerry asked Narayanan how large a nuclear
deterrent India needs, and if that requirement could be
satisfied under a regime whereby nuclear fissile material is
enriched under IAEA supervision. Director (Prime Minister's
Office) DB Venkatesh Verma reported that the GOI estimates
China possesses 400 deliverable nuclear weapons; Narayanan
followed by explaining that India's nuclear doctrine supports
a minimally credible deterrent sufficient to counter China
and Pakistan. (NOTE: The GOI delegation did not offer an
estimate of Pakistan's strategic arsenal. End Note.)
Narayanan also repeatedly pointed to India's no first use
doctrine and its "willingness to absorb a first strike" as
further evidence that Delhi does not seek a "huge stockpile."
"We have two hostile nuclear neighbors", stressed Narayanan,
and India was disrupting approximately one terrorist attack
against an economic or religious target every day.


6. (C) Ambassador Mulford noted that the July 18 agreement
was an agreement on principles, which nobody on either side
is suggesting be abandoned. The nature of the challenge is
to satisfy standards that the US Congress and the NSG set,
and to ensure that the agreement brings India into the
non-proliferation system, which, he added, is the best way
to get people to say it strengthens the non-proliferation
architecture without changing it substantially. Senator
Kerry emphasized the importance of demonstrating the clear
distinctions between democratic and responsible India's
nuclear program and those of countries like Iran when
speaking with critics of the civil nuclear agreement.

FMCT
--------------


7. (C) Senator Kerry asked Narayanan two questions: (1)
Knowing the GOI will abide by the FMCT (when in effect) that
will also limit other countries, can the GOI calculate how
much fissile material it will need for its minimum credible
deterrence, assuming its "no first use" doctrine, and (2)
Could the GOI consider IAEA involvement on the military side,
strictly as a non-proliferation issue and without limiting
the amount of material produced or India's deterrent?
Narayanan emphasized that firewalling India's civil and
military nuclear programs was a clear part of the original
agreement, adding when "the (UN) Committee on Disarmament
takes action on the FMCT, we will not backtrack, that is an
assurance." He also predicted the FMCT would emerge from the
Committee on Disarmament "soon." Narayanan had no answer to
Senator Kerry's question as to who, if not the IAEA, would be
the arbiter of the efficacy of the firewall between the civil
and military nuclear programs. (NOTE: During this exchange,

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Narayanan al
so made a passing reference to a Chinese transfer of nuclear
material to Pakistan "three weeks ago," possibly referring to
the Financial Times report on a large new reactor deal. End
Note.)


8. (C) Narayanan predicted that a proposal such as Senator
Kerry's "would not pass muster in Parliament." He launched
into a brief explanation of the precariousness of the UPA's
coalition and of its Parliamentary opposition to illustrate
the difficulty of pitching new ideas to support the civil
nuclear agreement. Narayanan forecasted that, as India's
nuclear power base increases, the percentage of military
reactors will drop; within 1-2 years of the FMCT's adoption,
he added, how many "military" reactors India maintains will
be "an academic question." Verma mentioned that PM Singh had
stated that India would not execute a unilateral fissile
material cut-off, and Joint Secretary (Prime
Minister's Office) Sujata Mehta added that the PM told
Parliament that he would do nothing that "amounted to a cap
on strategic programs."

NSG
---


9. (C) Narayanan reported that he found support for the
civil nuclear agreement in his meetings with his UK, French,
and Russian counterparts. His understanding from those
conversations is that "if the USG endorses the separation
plan, the majority of the NSG will fall in line." The US
will talk to Australia, Japan, and Canada, as well as China,
and the French and British will deal with the other
Europeans, he continued. On China, Narayanan commented that
their opposition is not based on proliferation issues; "they
are trying to suck out all the world's resources, including
copper and oil," implying the PRC wants to keep India's
nuclear program small and out of the international mainstream
so it cannot compete for nuclear feedstock.

GOI Won't Consider Restraints Beyond Future FMCT
-------------- ---


10. (C) Senator Kerry explained that the right time to
strengthen the GOI case for its exemption from US
non-proliferation legislation was while the deal had not yet
taken full shape. Narayanan held to the position that the
GOI
would abide by the FMCT when it comes into force, implying
that restraints beyond that would be difficult to accept. To
Senator Kerry's suggestion of a partial IAEA sequester or
escrow of military nuclear material, Verma insisted that such
an arrangement was "quite unprecedented," aside from when the
US dismantled Libya's nuclear program; Senator Kerry
countered that an NPT waiver was also unprecedented. Verma
responded that the escrow idea was "completely unacceptable
in India."


11. (C) Picking up Narayanan's earlier thread on the
civil/military nuclear mix, Verma reported that 19% of
India's thermal capacity is under safeguards. He predicted
that, absent the civil nuclear deal, by 2013 the percentage
outside safeguards would rise. With the deal in place,
however, Verma forecast the percentage would decline even
faster, due to the projected increase in civilian capacity.

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12. (U) Codel Kerry cleared this cable.

List of Participants
--------------


13. (U) GOI Delegation
National Security Advisor MK Narayanan
Joint Secretary (Prime Minister's Office) Sujata Mehta
Director (Prime Minister's Office) DB Venkatesh Verma
(notetaker)


14. (U) USG Delegation
Senator Kerry
Ambassador Mulford
Dr. Nancy Stetson
Maj. John Ulrich
Poloff Howard Madnick (notetaker)


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