INDIA REBUILDING ITS RELATIONSHIP WITH ISRAEL

S E C R E T SECTION 01 OF 02 NEW DELHI 007997

SIPDIS

SIPDIS

E.O. 12958: DECL: 11/24/2016
TAGS: PREL PGOV PTER PINR PBTS MOPS KDEM KISL PK IN
SUBJECT: INDIA REBUILDING ITS RELATIONSHIP WITH ISRAEL


NEW DELHI 00007997 001.2 OF 002


Classified By: DCM Geoff Pyatt for Reasons 1.4 (B, D)


1. (S) Summary: In a November 24 conversation, Israeli DCM
Yoed Magen described to us a renewed positive trend in
India's relationship with Israel. Magen told the DCM that
Israeli National Security Advisor Ilan Mizrachi is coming to
Delhi from November 27th through 30th for a high level
intelligence exchange with India. Deputy Prime Minister and
Minister of Industry, Commerce, and Employment Eli Yishai is
coming to India during the same week. A visit by Foreign
Minister Mukherjee to Israel is also in the works. Magen
pointed to huge growth in Israeli investment in India, which
may be contributing to a warming relationship. He was very
optimistic about the prospects for cooperation with India,
saying that the bilateral chill that reached a low point last
July was beginning to thaw. End Summary.

Warming Relationship
--------------


2. (S) Magen commented that it was good news for Israel that
Pranab Mukherjee has been appointed as India's Foreign
Minister. As Defense Minister Mukherjee was exposed to the
depth of strategic cooperation between India and Israel, and
Magen expressed optimism that it would be easier for Israelis
to work with him. He also revealed that Israel is working on
a Mukherjee visit to Jerusalem, which would be the first by
an Indian Foreign Minister since Yaswant Sinha's visit during
the BJP administration. He was similarly encouraged by the
appointment as Foreign Secretary former Ambassador to Tel
Aviv SS Menon and the early retirement of notoriously
anti-Israel Secretary East Rajiv Sikri.


3. (S) Magen said that Israel was preparing to hold a
Counter-Terrorism Joint Working group with India in January.
A discussion on the first agenda item, the Middle East and
Iran, would take place between Israeli National Security
Advisor Mizrachi and Indian National Security Advisor
Narayanan, sometime between November 27th and 30th. He
commented that in Israel's case, the Head of the National
Security Council was weakened by the strength of the Mosad
and Israeli intelligence agencies, which left the NSC with
little more than broad strategic issues to manage and made
coordination with Narayanan problematic. The second agenda
item was a series of professional seminars on
counter-terrorism issues, dealing with such issues as money
laundering and terrorism finance. Although they would like
to hold these seminars ideally three to four times a year, it
was hard to set them up and the GOI found that they could
typically only hold them once a year.

Concerns About the Middle East
--------------


4. (S) Reflecting on recent USG discussion with the GOI, DCM
warned that one of the issues that Israel may face in talks
with India about the Middle East is New Delhi's fear that the
sectarian conflict in Iraq will provoke India's conflict
between India's Shia and Sunni Muslim population. In this
context, India fears a precipitous US military withdrawal
from Iraq.


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Increasing Trade Ties
--------------


5. (S) Magen also discussed the Israeli Commerce Minister's
visit to India during the week of November 27th. He
commented that Commerce Minister Yishai was the leader of the
Israeli Ultra Orthodox Shas party. His schedule would
include one day in Goa, one day in Delhi, one day in Mumbai,
and one day in Gujarat. Magen said Yishai will not meet
Gujarati Chief Minister Narendra Modi during his visit to
that state, despite an invitation to do so. (Comment: Both
leaders are controversial figures. Modi has been implicated
by human rights groups in the 2002 killings of Muslims in
communal riots in Gujarat, and Yishai was criticized for his
comments during Israel's bombing in Lebanon in July 2006.
End comment.) Magen revealed that Israeli investment in
India was rising quickly, with overall trade at $700 million,
when calculated without the diamond trade. He said that many
large Israeli real estate companies were lining up to invest
in India, with proposals totaling $300 million in West Bengal
and $200 million in Bangalore.

Patching Things Up
--------------


6. (S) Comment: India's relationship with Israel hit a low
point during the summer of 2006 in response to Israel's
intervention against Hizballah. India's Shia Muslim
community is a very powerful vote bank in Lucknow, which has
a significant impact on upcoming state elections in Uttar
Pradesh. Elections in Uttar Pradesh, in turn, are seen as a
harbinger of the Congress Party's ability to keep control of
the central government in the next round of Parliamentary
elections. Congress leaders, therefore, demonstrated outrage
over the Lebanon conflict publicly in July 2006, even as very
broad and sensitive relations between the two countries
behind the scenes continued. India and Israel are working
now to repair the public relationship, although India is
likely to remain publicly cautious, at least in the short
term, until the UP elections are over.
MULFORD