UNPRECEDENTED INDIA VISIT BY SAUDI KING BOOSTS

C O N F I D E N T I A L SECTION 01 OF 06 NEW DELHI 000803 SIPDIS SIPDIS DEPT FOR OI, SA/INS, NEA/ARPI, DOE FOR KAREN HARBERT, DAVID PUMPHREY E.O. 12958: DECL: 02/02/2016 TAGS: PREL PGOV EPET ETTC PTER UNGA IN SA PK IR IS SUBJECT: UNPRECEDENTED INDIA VISIT BY SAUDI KING BOOSTS ENERGY LINQ, ANTI-TERRORISM COOPERATION NEW DELHI 00000803 001.2 OF 006 Classified By: PolCouns Geoff Pyatt for Reasons 1.4 (B, D) ¶1. (C) Summary: MEA Joint Secretary Sanjay Singh told PolCouns and Poloff on February 2 that Saudi King Abdullah's January 25-28 New Delhi visit - the first in 50 years by a Saudi monarch - was a great success, and far broader in scope than was reported in the media. The visit highlighted energy links, non-energy trade, education, and agreements on counterterrorism (including an accord on compromise language for the CCIT, which New Delhi now fears the US is blocking). The leaders discussed Iraq, but avoided discussion of Iran. The visit reflected a convergence of economic interests in New Delhi and Riyadh which both sides are resolved to leverage into improved Indo-Saudi ties. While India casts a wary eye at Saudi funding of terror and extremism in South Asia, as many as 1.5 million Indians work there and many more at home benefit from their remittances. In addition, India sees Saudi Arabia as more reliable than Iran in securing its expanding energy needs. As India's profile rises, its historic sway over the Arabian Peninsula is being felt again, and the pendulum is swinging in India's favor after so many years of being ignored in favor of ties with Pakistan, or exploited by the Gulf for cheap labor. End Summary. ¶2. (C) Beginning a lengthy read-out of the monarch's visit to India, Singh said that New Delhi and Riyadh perceive themselves as natural partners, joined by the Arabian Sda, with common regional security concerns and a joint interest in combating terrorism. He stated that primary emphases of King Abdullah's visit were crime and terrorism, energy linkages, and educational and cultural ties. In a mood to "make up for lost time," the two sides pointedly avoided more contentious issues like Saudi support for Pakistan. Counterterrorism -------------- ¶3. (C) The Memorandum of Understanding on Combating Crime was the centerpiece of an unprecedented anti-trrorism effort, along with a call to conclude the Comprehensive Convention on International Terrorism (CCIT) now being debated in the UN General Assembly, and to establish the Saudi-proposed International Counter-Terrorism Center. Crime had a prominent role in India-Saudi discussions because of the links between domestic crime and terrorism and Gulf-based funding, money transfers, and shipments of contraband and weapons. Singh told us that New Delhi hopes to broaden its cooperation with Saudi Arabia on all angles of counterterrorism as a result of the MOU, but the King's visit was "not the time or the place" to discuss the delicate question of Saudi financing of Islamic institutions in India. NEW DELHI 00000803 002.2 OF 006 He also gave no information regarding a reported Indian approach to the SAG on private Saudi funding for groups such as Lashkar-e-Toiba. However, he added, India will follow up with the Saudi government on funding issues. The GOI has no problem with SAG-controlled charitable contributions, which are regulated by India's Ministry of Finance under the Foreign Contributions Regulation Act, but the concern is with private Saudi charities, Singh elaborated. He confirmed that Indian NSA MK Narayanan had a meeting with, and hosted dinner for, his Saudi counterpart Prince Bandar bin Sultan bin Abdul Aziz al-Saud (formerly the Ambassador in Washington) and Muqrin bin Abdul Aziz, Assistant President of the General Intelligence Presidency, but did not elaborate on their discussions. CCIT Agreement? -------------- ¶4. (C) Singh told us that the Saudi leadership had agreed to compromise language on national liberation movements for the CCIT, in exchange for Indian support to establish the International Counter-Terrorism Center in Riyadh, proposed by King Abdullah in February 2005. MEA Additional Secretary (International Organizations) KC Singh had alluded to this in the February 1 Global Issues Forum with G U/S Paula Dobriansky. J/S (UN Political) Sanjiv Arora added that Pakistan and Egypt are the holdouts in the OIC demanding language on "state terrorism," but could not predict how effective the Saudis would be at bringing them around to the compromise. Energy Potential -------------- ¶5. (C) Saudi Arabia offered during the King's visit to increase the volume of its crude oil supplies through automatically-renewing evergreen contracts, boosting India's vital energy relationship with the Kingdom, which currently provides 26% of India's petroleum imports. Singh noted that India imported USD 6 billion worth of crude oil from KSA in 2004, and estimated that the 2005 figures would reflect a 50% increase. New Delhi hopes to establish a strategic partnership in energy with the KSA, Singh said, to use mutual investment in each other's energy sector to build stability into the energy trade relationship. India plans to invest in the petrochemical sector in Saudi Arabia as it does currently in Oman, in order to ship finished products to India instead of importing large volumes of crude to feed plants located in India. Eventually, Indian industry is also eyeing Qatar and the UAE for further petrochemical investment, he added. NEW DELHI 00000803 003.2 OF 006 ¶6. (SBU) Singh also highlighted plans to increase collaboration in higher education. Noting that the lack of degree equivalencies in Saudi Arabia and India keeps the number of Saudis very low among the Arab student population in Indian institutes of higher education, Singh discussed plans to encourage Saudi engineering students to study in India. India will also assist the SAG in setting up two institutes of higher education for information technology and engineering in the Kingdom. Very Broad Engagement in New Delhi -------------- ¶7. (SBU) Eleven planeloads of Saudi Ministers fanned out during the visit to push issues in their portfolios throughout New Delhi, Singh reported. Minister of Finance Ibrahim Al-Assaf and Prince Faisal (Commander of the Air Force) held a meeting with Congress Party leaders Defense Minister Pranab Mukherjee, Minister of Science and Technology Kapal Sibal, and then-Ministes of Information and Broadcasting Jaipal Reddy to "catch up." Additionally, Faisal spoke to a "selected gathering" of India's defense establishment at the MOD-sponsored Institute for Defense Studies and Analyses, Assaf gave an address at the Institute for Economic Growth, and Minister of Petroleum Ali Ibrahim al-Naimi interacted with energy sector leaders at yet another Delhi think tank. Three other large delegations from the KSA, one of civil service employees, a second of newspaper editors, and a large business delegation had also toured New Delhi in the two weeks prior to the King's arrival, with the private sector events culminating in a trade show and joint Indian-Saudi Chambers of Commerce appearance by King Abdullah and PM Manmohan Singh. Labor Issues Avoided -------------- ¶8. (SBU) Although approximately 1.5 million Indians work in Saudi Arabia, Singh did not indicate that labor relations (a sore point given the perception in India that laborers in the Kingdom are treated very poorly) figured in King Abdullah's agenda. The King averted a major embarrassment when a Saudi victim forgave his Indian assailant, who had been sentenced to literal administration of eye-for-an-eye justice, allowing the Saudi Justice Ministry to pardon the Indian worker just before the visit. The case had captured front page attention in India in early January, and seemed poised to blot Abdullah's reception in New Delhi and reconfirm most Indians' stereotypes of the Kingdom. Regional Affairs NEW DELHI 00000803 004.2 OF 006 -------------- ¶9. (C) When questioned on bilateral interaction on Pakistan, Singh replied that the Saudis did not go beyond expressing their support for the Indo-Pak peace dialogue. While King Abdullah's statement of support for Indian observer status in the OIC to an Indian interviewer grabbed attention in India, the monarch qualified that support by conditioning it on Pakistani acceptance and initiative. Singh also stated that, unless the PM and King discussed Iran during their private one-on-one conversation, the GOI and SAG steered clear of that country as well. The delegations did discuss Iraq, and Singh emphasized that the paragraph in the joint Delhi Declaration expressing support for Iraq's "security, unity, territorial integrity and prosperity, and respect for its sovereignty and independence" was the result of "very careful" negotiation. Muslim Outreach a Bit Flat -------------- ¶10. (C) Although the visit of the "Custodian of the Two Holy Mosques" was perceived as a coup for the UPA government in its constant campaign to appeal to India's 148 million-strong Muslim vote bank, local Muslim leaders told us they were unhappy with the handling of the cultural outreach program. King Abdullah's only public event in a setting linked with Indian Muslims was a convocation at New Delhi's Jamia Millia Islamia University, at which he received an honorary degree and spoke briefly. MEA's Singh was careful to point out that Jamia Millia is a secular, not an Islamic, institution despite its long heritage of interest in Muslim affairs. Muslim MPs and bureaucrats were present at the Presidential luncheon in honor of King Abdullah, but the only Muslim community representatives invited were three members of Ahale Hadith, a moderate Wahhabi organization representing a narrow sliver of India's Muslim population, whom the Saudi guests had selected. New Delhi's Muslim community was disappointed by the limited opportunities for India's Muslim population; the Imam of the Jama Masjid mosque, India's largest, had hoped to invite King Abdullah to visit, but MEA turned down his request. (NOTE: The GOI is uncomfortable with King Abdullah's offer to fund the renovation of the Jama Masjid, fearing that the reputedly corrupt Imam Ahmad Bukhari would pocket the funds and leave India with a diplomatic embarrassment. This concern, as well as the fear that, with the money would come unwelcome extremism, are widely rumored to have prompted the GOI decision to keep the King away from the mosque. END NOTE) COMMENT: India on the Rise Again NEW DELHI 00000803 005.2 OF 006 -------------- ¶11. (SBU) Asian consumers buy 60% of Saudi petroleum exports, yet Saudi political ties in the region are weak. Indian Middle East watchers attribute Riyadh's interest in this high-profile trip to a desire to strengthen relations with important customers, show America it is not the only important Saudi oil client, and diversify its relationships in Asia. The King's trip also likely reflects Saudi motivation to burnish their public image in India, which has traditionally viewed Saudi Arabia with skepticism, accusing the Kingdom of siding with Pakistan and providing financial support for anti-India terrorism. ¶12. (C) As India's profile in the Gulf region rises, its new economic and political weight recalls the suzerainty that the India Office historically exercised over the region from the Suez to Indochina, when the rupee was the common currency of the Indian Ocean and Arabian Sea, and the Nizam of Hyderabad paid for the upkeep of the "Two Holy Mosques." Gulf states can see a rising India as a counterpart to balance their older, but less lucrative, religion-based ties to Pakistan. The new India beckons as a partner in petroleum trade, industrial investment, commerce, and political goals (such as the campaign against terrorism),outgrowing its older image as simply an impoverished purchaser of oil and source of cheap labor. ¶13. (C) New Delhi also saw an opportunity for diversification through the monarch's visit. Although the KSA supplies 26% of India's petroleum imports, and the agreements signed could boost that figure, India sees an opportunity to expand the breadth of its engagement in the Gulf through the King's visit. This is particularly opportune at a moment when its "civilizational" (not to mention energy) links with Iran are causing heartburn in the Prime Minister's Office (stemming from the nuclear crisis) and a Hamas-majority government is making support for Palestinians more tricky. A public perception of strong relations with a Saudi regime deeply suspicious of Tehran's intentions may not drastically alter India's real interests in the Middle East, but could ease the domestic political pressure on the GOI to appease India's Muslims (of whom the vast majority are Sunni, not Shia) by siding with Iran on international conflicts. ¶14. (C) The GOI seems genuinely excited by the prospects of improved ties with Saudi Arabia, particularly in expanding their relationship beyond oil imports, and rolled out the reddest of carpets for the Saudi rulers. The Prime Minister, for instance, took the unusual step of greeting Abdullah on NEW DELHI 00000803 006.2 OF 006 arrival at the airport. The Saudis reportedly appreciated this royal treatment, and commented at the Republic Day extravaganza that they were surprised and impressed by the exceptional diversity of the Indian nation, and the GOI's ability to manage this plentitude in a democratic fashion. This Indian engagement with Saudi Arabia is also good for us, as New Delhi shares with us, and will manifest in its interactions with Riyadh, the same interests in better Saudi cooperation in counterterrorism, moderating private Saudi influence in their domestic Muslim population, and helping Saudi society meet the challenges of engagement with the twenty-first century. ¶15. (U) Visit New Delhi's Classified Website: (http://www.state.sgov.gov/p/sa/newdelhi/) MULFORD