BOTH SIDES BULLISH ON U.S.-INDIA MIL-MIL TIES

C O N F I D E N T I A L SECTION 01 OF 04 NEW DELHI 007886 SIPDIS SIPDIS E.O. 12958: DECL: 11/20/2016 TAGS: PREL PGOV MARR MASS ETTC KSTC KOMC IN SUBJECT: BOTH SIDES BULLISH ON U.S.-INDIA MIL-MIL TIES REF: NEW DELHI 7661 Classified By: DCM Geoffrey Pyatt for Reasons 1.4 (B, D) ¶1. (C) Summary. U.S.-India military-to-military ties - already growing rapidly - were given a fresh boost in back-to-back Defense Procurement and Production Group (DPPG) and Defense Policy Group (DPG) meetings in New Delhi during the week of November 12. In addition to the high-level networking and coordination which occurred, important takeaways included: a Letter of Offer and Acceptance (LOA) for the acquisition of six UH-3H SEA KING helicopters was signed and will be included in the hot transfer of USS TRENTON (LPD-14); notice that the Letter of Request for the purchase of six C-130J aircraft was nearly finalized; establishment of a defense trade working group; acceptance by the Indian side to invite Japan to Malabar 2007; a mutual understanding that future exercises be enhanced in scale and complexity; Indian confirmation that it will send an Indian one-star officer as a liaison officer to PACOM; agreement to facilitate Indian participation in Red Flag 2008; and an agreement to enhance intelligence sharing. Additionally, in a separate meeting, U/S Edelman informed Dutt that the Department of Defense had concluded it will make electronically scanned (AESA) RADARs available to U.S. companies competing for India's Multi-Role Combat Aircraft (MRCA) contract. End Summary. DPPG: Atmospherics, Substance Improved -------------- ¶2. (C) The 3rd U.S.-India Defense Procurement and Production Group was held November 12-13, led by Lieutenant General Jeffrey Kohler, Director of the Defense Security Cooperation Agency, on the U.S. side and Ministry of Defense Director General (Acquisition) S. Banerjee on the Indian side. Atmospherics were significant - as in past meetings this year's event was cordial, and representative of the transformation taking place in the relationship. Substance, too, has improved, as this year's session generally focused more on strategic partnership issues, such as end-use monitoring and Foreign Military Sales (FMS) procedures. The group will continue to work on incompatibilities and smoother cooperation in defense procurement. DPPG Takeaways: Sea Kings, C-130Js (Soon!?),and a New LOA? -------------- - -------------- ¶3. (C) The DPPG produced the following takeaways: a Letter of Offer and Acceptance (LOA) was signed for the acquisition of six Sea King UH-3H helicopters to be included in the hot transfer of USS TRENTON (LPD-14; and notice that the Letter of Request (LOR) for the purchase of six C-130J aircraft was nearly finalized. In addition, the Indian side offered briefings on India's new Defense Procurement Procedures (DPP 2006) and provided an items of interest list for future acquisitions, including combat training simulator systems; high altitude long endurance, armed, micro and mini unmanned aerial vehicles; third generation anti-tank guided missile NEW DELHI 00007886 002 OF 004 systems; third generation night vision equipment; combat free fall parachutes; Doppler VHF omni-range measuring equipment; instrument landing systems/distance measuring equipment; mine hunter crafts (Osprey class); MK-45 guns and ammunition; and hand held direction finders. India also confirmed it would send one person to test pilot training and another to flight test engineer training in 2007. Sovereignty Concerns Lead to Proposal of New LOA Text -------------- -------------- ¶4. (C) Based on GOI misconceptions of U.S. end-use monitoring (EUM) procedures, an ad hoc subgroup formed to discuss U.S. requirements for monitoring defense article and services transfers, particularly Enhanced EUMs (EEUMs) for sensitive technologies. Claiming physical inspections of sensitive locations and knowledge of the deployment of certain equipment would jeopardize national security, the Indian side expressed problems with the standard LOA language which had been used in the TRENTON case, and proposed draftingnew LOA language which it claimed would be consistent with the Arms Export Control Act while at the same time acceptable to Indian sensitivities. Ministry of External Affairs Joint Secretary (Americas) Jaishankar, the driving force on the SIPDIS issue on the Indian side, went as far as to claim India would not likely sign any additional LOAs until language was modified. As stated above, India later proposed a new text, which Undersecretary Edelman and General Kohler said they would share with relevant offices in Washington before providing an official USG response. (Note: Text of the proposed new LOA has been sent electronically to DOD's Office of South and South East Asian Affairs and State's India Desk and PM Bureau. End Note.) ¶5. (SBU) It was agreed to hold the next DPPG in May or June of 2007 in Hawaii. It was also agreed that U.S. and Indian industries will be invited to join a roundtable session on the sidelines of the DPPG. DPG: Let's Take It To Next Level -------------- ¶6. (C) The 8th U.S.-India Defense Policy Group, led by Undersecretary of Defense for Policy Eric Edelman and Defense Secretary Shekhar Dutt, was held November 15-16. Again, the SIPDIS mood was cordial and positive. Both sides recognized the commendable progress which has been made in bilateral cooperation in recent years, including bilateral military exercises which have grown in size, complexity and scope, and agreed that work should be done to take the mil-mil relationship to the next level. In his opening remarks, Secretary Dutt called for joint production between U.S. and SIPDIS Indian companies to be set up, highlighting Indian manufacturing capabilities. U/S Edeleman urged India to sign the Logistics Support Agreement (LSA) and the Communications Interoperability and Security Memorandum of Agreement (CISMOA) in order to facilitate enhanced defense cooperation, to which Dutt promised early action. U/S Edelman also noted U.S. interest in Indian participation in multilateral NEW DELHI 00007886 003 OF 004 exercises. The proceedings included reviews of the various subgroups during 2006, along with presentations on Afghanistan, China, the Global War on Terror, South Asia, missile defense, India's disaster relief initiatives, and maritime security. DPG Takeaways: A Bumper Crop -------------- ¶7. (C) The DPG had several tangible achievements, including: the establishment of the Defense Joint Working Group, a body to be headed by the new Assistant Secretary for Asian and Pacific Security Affairs, to enhance strategic policy dialogue; establishment of a defense trade working group, to be headed by the Deputy Assistant Secretary of State for Political-Military Affairs on the U.S. side, to facilitate technology transfer and licensing issues; acceptance by the Indian side to invite Japan to Malabar 2007; a mutual understanding that future exercises be enhanced in scale and complexity; Indian confirmation that it will send an Indian one-star officer as a liaison officer to PACOM; agreement to facilitate Indian participation in Red Flag 2008; and an agreement to enhance intelligence sharing. Additionally, in a separate meeting with Secretary Dutt outside the confines of the DPG, U/S Edelman informed Dutt that the Department of Defense had concluded it will make electronically scanned (AESA) radar available to U.S. companies competing for India's Multi-Role Combat Aircraft (MRCA) contract, the RFP for which is expected in the coming months. Dutt requested a briefing from the U.S. on AESA's capabilities, so that such information could be contained in the MRCA RFP if the GOI so desired. ¶8. (SBU) The next meeting of the DPG will be held at an undetermined mutually convenient date, probably in November ¶2007. Next Steps -------------- ¶9. (C) Clearly India's policymakers have bought into the vision laid out by then-Defense Minister Mukherjee and Secretary Rumsfeld on 28 June 2005. If the lead story in the SIPDIS November 20 Indian Express -- a positive piece reporting on DPG outcomes in light of the civ-nuke deal passing in the Senate -- is any indication, India's mainstream is bullish on closer defense ties, too. There are bureaucratic hurdles still to clear, and the delay in the CISMOA and LSA are good examples of India's bureaucratic bottleneck. Still, the atmosphere is positive, and that's good news for pending big-ticket contracts such as the MRCA, especially given new Defense Minister Antony's focus on eradicating corruption from his ministry and his enthusiasm for the principles behind America's Foreign Corrupt Practices Act (reftel). It's also a positive signal that we can move ahead to implement Defense Framework items previously hung up by our establishments, such as expanding two-way defense trade as a means to reinforce the strategic partnership and increasing opportunities for co-production and research and development. NEW DELHI 00007886 004 OF 004 We should now press the Indians to move forward with their commitment to expand interaction with other nations in ways that promote regional and global peace and stability, such as through maritime security initiatives, peacekeeping operations, or in multilateral exercises. We should also take advantage of the agreement to expand the players involved in intelligence exchanges to make our intelligence sharing truly a two-way endeavor, giving us India's insight into South Asia's numerous conflicts and issues and the challenges of terrorism in South Asia. MULFORD