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

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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
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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?
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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

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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
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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

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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
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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

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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

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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

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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
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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
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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

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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.

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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