INDIA SKEPTICAL OF SCO AS SECURITY FORUM

S E C R E T SECTION 01 OF 03 NEW DELHI 003270

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E.O. 12958: DECL: 05/11/2016
TAGS: PREL PGOV MASS PTER SNAR SCUL ETRD ENRG IN
SUBJECT: INDIA SKEPTICAL OF SCO AS SECURITY FORUM

REF: SECSTATE 72746

Classified By: PolCouns Geoff Pyatt, Reason 1.5 (B,D)


1. (C) Summary: PolCouns delivered reftel demarche to MEA
Joint Secretary for Eurasia Bhagwati on May 10 seeking
India's help to prevent the inclusion of anti-US language at
the upcoming SCO meeting in Shanghai. Bhagwati stated
clearly that as an observer to SCO, India has no role in
drafting the organization's official documents, and is
interested in participating in SCO only to discuss technical,
trade, counter narcotics, cultural, and potentially, counter
terrorism issues, but not broader strategic and security
matters. Bhagwati also expressed interest in Central Asian
energy opportunities, but relayed his concern that each of
them be fully evaluated by India's Planning Commission once
their costs and benefits have been determined. End summary.

GOI Played No Role in 2005 SCO Summit Statement
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2. (C) On May 10 PolCouns and Poloff had a typically engaging
discussion with GOI Ministry of External Affairs (MEA) Joint
Secretary for Eurasia Jaimini Bhagwati on issues ranging from

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India's participation in the Shanghai Cooperation
Organization to energy trade with Central Asia. Bhagwati
reacted to reftel demarche by explaining that while India had
been present at the July 2005 SCO meeting as an observer, it
played no part in the drafting of the summit's declaration.
The 2005 SCO statement was drafted only by SCO's six full
members (Russia, China, Kazakhstan, Uzbekistan, Kyrgyzstan,
and Tajikistan). Bhagwati went on to explain that observer
states (including India) only saw the 2005 SCO statement at
the signing ceremony, and that there had been no opportunity
to edit the document. Moreover, Bhagwati noted that SCO's
statute explicitly prohibits observer states from signing any
official SCO communiqus. Therefore, India had no role to
play in the substantive drafting or approval of the 2005 SCO
summit statement, and has similarly not been invited to
participate in the May 15 meeting of SCO foreign ministers,
which will be working on drafts for the 2006 SCO summit.
Encouragingly, Bhagwati stated that the GOI would "not be
happy or prepared to be a party to past (SCO) communiqus -
if we were to become a member this would be an issue."

Indians do not Want to Use SCO as a Security Forum
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3. (C) Bhagwati went on to note that one agenda item before
the SCO foreign ministers next week will be the role of
observer countries in the organization. India has made it
clear to the SCO secretariat that it is interested in
participating in SCO to work on economic, trade, energy,
technical, cultural, counter narcotics, and perhaps, counter
terrorism issues, but is not interested in discussing broader
security or strategic issues in the forum.

India Cautious of Russia and China Central Asian Interests
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4. (C) Our GOI interlocutor acknowledged the US point that an
anti-American SCO reference could complicate issues with the
Kyrghyz authorities, but made it clear that "India does not

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want to impose itself on that discussion." Bhagwati also
mentioned that he had seen Vice President Cheney's recent
remarks on Russia, noting them in the context of growing US
interest in Central Asia's energy resources. "You can guess
the sensitivities of the two giant neighbors to the north and
the east to this," Bhagwati observed, alluding to Russia and
China. Bhagwati believes that Russia is not interested in
Central Asia for energy, while China is - particularly for
additional fossil fuel energy sources, and not hydropower.


Energy Opportunities Need Study
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5. (C) Bhagwati went on to convey that it does make sense for
India to engage with Central Asia on energy issues, given the
energy deficit of the former and surplus in the latter.
PolCouns invited India to participate in the upcoming June
2006 USTDA conference on the Central Asian energy sector in
Istanbul, noting that the initiative could also generate
opportunities for India's private sector. While Bhagwati
acknowledged that there are a number of possible energy
projects in Central Asia, he also conveyed that full
cost-benefit analyses must be conducted for each of the
projects, since "none of them have been costed out yet."
Bhagwati also said that India's Planning Commission will
approve any potential project if its technical
specifications, cost, and other factors satisfy India's
long-term needs. Bhagwati expressed doubt that the proven
energy reserves in countries such aS Turkmenistan will be
sufficient to fulfill even previous commitments made to
Russia and China.

Comment: India's Energy Balancing Act
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6. (C) A front page article in the May 11 Indian Express
noted that India's Petroleum Ministry plans to ask the
Cabinet's permission to request to become an official member
of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas
pipeline project. The article also quoted Foreign
Secretary's letter to the Petroleum Ministry last month that

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"participation in TAPI project would give us leverage with
Iran on the IPI (Iran-Pakistan-India) project," and "it would
be in tune with US strategic interests for the region." In a
separate May 11 meeting, MEA's Afghanistan policy coordinator
confirmed the accuracy of the Express report. There is
high-level GOI support for moving forward with Central Asian
energy options, particularly since Iran reneged on an
agreement to provide India with liquid natural gas per an
agreement signed in 2005. The devil for these Central Asian
projects, however, will be in their technical details and
cost estimates, as well as the security risks of transporting
energy through Afghanistan and Pakistan. India will also be
careful to tread lightly around the interests of China and
Russia in Central Asia, while pursuing its own energy needs
without directly competing with them in their traditional
spheres of influence. As for the SCO, India clearly wants to
be aware of its machinations, but does not share its
strategic goals. End comment.


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

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