MEA AWAITING CENTRAL ASIAN ENERGY TRADE

C O N F I D E N T I A L SECTION 01 OF 02 NEW DELHI 004254

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PASS USTDA, DAN STEIN AND CARL KRESS

E.O. 12958: DECL: 06/09/2016
TAGS: PREL EAID EINV ENRG EPET ETRD IN PGOV
SUBJECT: MEA AWAITING CENTRAL ASIAN ENERGY TRADE
FEASIBILITY REPORT

REF: A. STATE 85503

B. NEW DELHI 3554

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Classified By: A/PoulCouns Atul Keshap for Reasons 1.4 (B, D)


1. (C) Summary: USAID South Asia Regional Initiative for
Energy (SARI/E) regional coordinator delivered ref A demarche
to the GOI Ministry of External Affairs (MEA) Joint Secretary
for Eurasia Jaimini Bhagwati, who was generally supportive of
all trade initiatives but cautious about the prospects for
energy trade between Central and South Asia until full
feasibility studies have been completed. MEA Deputy Director
for Afghanistan also noted that security is a key concern for
Indian firms operating in Afghanistan, and that the cost of
any proposed project is likely to be prohibitively high

India to Send Observer to Istanbul Conference
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2. (C) Regional coordinator for the USAID South Asia Regional
Initiative for Energy (SARI/E) and POLOFF delivered ref A
demarche in a June 8 meeting with MEA Joint Secretary for
Eurasia Jaimini Bhagwati. While MEA would not send any
representatives from Delhi to the June 12-14 USTDA energy
conference (Ref B),Bhagwati noted, he pledged to ask India's
Ambassador to Turkey to send an official from the GOI's
Istanbul consulate to attend. (Note: India is also sending a
technical representative from the Power Grid Corporation of
India to the Istanbul conference. End note.)

The More Trade, the Better
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3. (C) Bhagwati noted that "we have this SAARC forum, and we
should do more trade in everything. We are delighted to
participate in any and every form where we can promote
trade." While Bhagwati is generally supportive of energy
trade between central and south Asia in particular, he
emphasized that "everything depends upon whether these
projects are technically and economically feasible."

Pessimistic about TAPI
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4. (C) While the Indian cabinet approved India's
participation in the Turkmenistan-Afghanistan-Pakistan-India
(TAPI) pipeline (see reftel B),Bhagwati is far more cautious
about the deal, noting that the project reports he has seen
do not demonstrate that Turkmenistan's gas supplies are
sufficient to honor even existing gas supply agreements with
Russia, and deals contemplated with China.

Build Consensus in the Indian Bureaucracy
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5. (C) Bhagwati also encouraged USAID to sensitize people in

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the Indian bureaucracy, particularly in the Minister of Power
and the Planning Commission, to resolve all of the
outstanding technical issues in order to allow for a
political decision whether or not to participate in the
Central-South Asian transmission line to be made. (Note:
USAID is planning to meet on June 22 with Kirit Parikh,
Member of the GOI Planning Commission to discuss these
matters further. End note.)

Indian Firms Scared of Afghanistan
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6. (C) In a separate June 8 meeting, Aquino Vimal, MEA Deputy
Secretary for Afghanistan told AidOff and POLOFF that the

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security of any energy transmission line through Afghanistan
is a key risk factor that must be taken into account. Aquino
emphasized that after the April 29 killing of Indian engineer
Suryanarayan, Indian firms have been extremely reticent to
continue work or begin new projects in Afghanistan. Despite
security concerns, however, Aquino observed that the TAPI and
Iran-Pakistan-India (IPI) pipeline are being actively
considered by the GOI, and that therefore electricity trade
between central and south Asia could still be approved by
India. "We'll have to consider all options," Aquino
concluded, "gas from Myanmar, hydropower from Nepal, we don't
foreclose any options."

Comment: Cautious Below, Risk Taking Above
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7. (C) At the working level, MEA officials appear on the
whole to be cautious about the prospects for electricity
trade between central and south Asia, until completed
feasibility studies clearly demonstrate the benefit of such
projects. Judging by India's willingness to engage in the
TAPI and IPI projects, despite the technical uncertainties
and security risks, however, it appears that at the cabinet
level Indian leaders are more willing to be seen to
participate in energy trade and transport projects. USAID
will continue to engage MEA as well as other GOI Ministries
to share information and demonstrate both the costs and
benefits of India's participation in regional energy
projects, so that the GOI can make an informed decision. In
particular, USAID will engage the GOI and USTDA to evaluate
the possibility of including India in the feasibility study
of the proposed Central-South Asia electricity line.
MULFORD