ENERGY AND TRADE DOMINATE CODEL GILLMOR'S MEETING

UNCLAS SECTION 01 OF 03 NEW DELHI 000396 SIPDIS SENSITIVE SIPDIS E.O. 12958: N/A TAGS: PREL PGOV OVIP KNNP ENRG ECON ETRD IN PK SUBJECT: ENERGY AND TRADE DOMINATE CODEL GILLMOR'S MEETING WITH INDIAN PARLIAMENTARIANS ¶1. (SBU) Summary: A congressional delegation led by Congressman Gillmor (R-OH) held a wide-ranging discussion with Indian Members of Parliament at a meeting convened by the Indo-US Parliamentary Forum on January 13. Energy and trade dominated the session, with the Indian Parliamentarians stressing the importance of the July 18 Agreement within the broader context of India's future energy needs. Nuclear power, the Indian Parliamentarians stressed, would lessen India's current dependence on countries like Iran for energy, while also reducing pollution inside India. The Ambassador stressed the role the GOI can play in shaping an agreement palatable to the US Congress. The two delegations also discussed the shared benefits of increased trade and the common threat of terrorism. End summary. MORE NUCLEAR ENERGY EQUALS LESS TIES WITH IRAN, CLEANER AIR -------------- -------------- ¶2. (SBU) The Indian Parliamentarians were unanimous in saying that approval of the July 18 Agreement was critical to US-Indian relations, and several forecast a worsening of relations should the deal not come to fruition. MP Anand Sharma, chief spokesman for the Congress Party, stated that there now existed the prospect for a "dimensional change" in US-India relations. In the context of the July 18 agreement he emphasized India's "impeccable" record on non-proliferation, and drew a contrast between India's record and those of China and Pakistan. He emphasized that India is a responsible democratic state and that any commitment India made would be a firm one. MP Raashid Alvi explained that the July 18 agreement was of paramount importance, and cautioned that any failure to reach a deal could negatively affect US-Indian relations. ¶3. (SBU) Several MPs suggested that passage of the July 18 agreement would enable the GOI to lessen its links to Iran by allowing India to focus on the domestic production of energy through nuclear power. MP B. J. Panda noted that India currently meets only 3% of its power needs through nuclear power, and that this shortfall forced India to turn to Iran, a country that India "would rather not deal with." Deepinder Hooda said that the civil nuclear agreement was "very important" to India given that most oil and gas reserves were located in unstable parts of the world. MP Chandran Mitra, editor of the Pioneer, distinguished between India's short and long-term energy needs, stating that he did not believe that the United States fully appreciated India's energy requirements. He noted that the India-Iran gas pipeline was the most palatable option to India from a security standpoint as other pipeline options passed through too many "disturbed areas" such as Afghanistan. ¶4. (SBU) Several Indian Parliamentarians underlined the virtues of shifting from older, dirtier energy resources such as coal to the cleaner energy provided by nuclear power. They suggested that the long-term solution to India's energy needs was clean nuclear power, pointing out that Indian coal has a high ash content. CONGRESSIONAL DELEGATION: DEAL NOT DONE YET -------------- ¶5. (SBU) Congressman Gillmor stated that Congress needs to NEW DELHI 00000396 002 OF 003 be further convinced of the merits of the nuclear understanding, especially given the "dramatic changes" contemplated by the July 18 agreement. However, he said that he remained optimistic that a deal could be done. ¶6. (SBU) The Ambassador stressed India's role in making agreement possible, noting that the President had made the July 18 Agreement the centerpiece of the Prime Minister's visit to the US, and that India now needed to take actions that would allow the US Congress to approve the new framework. He also expressed concern that India did not understand the central role of the US Congress in approving the understanding, and hoped that India would do more to engage with the Congress. The Ambassador said that he believed a deal was achievable, but that India needed to put forward a sufficient separation proposal as there is "no point in proposing legislation that would fail." TRADE A WIN-WIN SITUATION SAY DELEGATES -------------- ¶7. (SBU) Both delegations recognized the benefits of increased trade between India and the US. The Indian Parliamentarians listed the ways in which US companies benefited from offshoring high technology research and development to India. MP Deepinder Hooda noted that low cost technology centers in India not only help US companies remain globally competitive but also create a growing middle class in India, many of whom are consumers of American products. The Congressional delegation agreed, with Congresswoman Granger noting the increased ties made possible by the Open Skies agreement and the prospect for further cooperation in defense co-production. Congressman Walden expressed hope that trade barriers could be lowered, noting the high Indian tariffs on US agricultural products. GETTING TO MARKET - THE IMPORTANCE OF INFRASTRUCTURE -------------- -------------- ¶8. (SBU) The Indian Parliamentarians cited impressive projected central spending on infrastructure upgrades such as the golden quadrilateral road project, while acknowledging the need for much more foreign investment in roads, rails, and airports. Several MPs stated that constraints on infrastructure development included a parliamentary budget system that made long-term planning difficult, particularly given the need to reallocate money for projects on an annual basis. Panda also noted the difficulties inherent in building Parliamentary consensus for large-scale projects, citing as an example the three years it took to craft one large electricity law. TERRORISM A SHARED CONCERN -------------- ¶9. (SBU) Members of both delegations highlighted terrorism as a shared concern between India and the US. The Indian Parliamentarians emphasized the number of terrorist attacks aimed at India, with one MP stating that India was the largest victim of terror in the world. The Indian MPs also placed the blame for terrorist attacks in India squarely on Pakistan, with several commenting that Pakistan was the sole cause of terrorism within India. Many drew distinctions NEW DELHI 00000396 003 OF 003 between India and Pakistan's respective political systems and respect for minority rights. Several MPs noted that US support for Pakistan was difficult to explain to the Indian public given the oft-stated US emphasis on democratic values. ¶10. (SBU) Meeting participants included: United States - The Ambassador Congressman Paul E. Gillmor Congressman Jerry Costello Congressman Sam Johnson Congresswoman Kay Granger Congressman Dennis J. Kucinich Congressman Greg Walden Congressman Bobby Jindal Mr. Chris Walker Rev. Daniel P. Coughlin Mr. Steve Rusnak Mr. Eric Stocky PolOff David Snider PolOff Courtney Kramer PolOff Adam Packer India - MP N.P. Durga MP P K. Sambasiva Rao MP Santosh Bagrodia MP P.K. Maheshwari MP Anand Sharma MP Murali Deora MP B.J. Panda MP Tarlochan Singh MP Deepinder S. Hooda MP Chandran Mitra MP Raashid Alvi MP Ashwani Kumar ¶11. (U) Visit New Delhi's Classified Website: (http://www.state.sgov.gov/p/sa/newdelhi/) MULFORD