Identifier
Created
Classification
Origin
07MOSCOW5435
2007-11-17 12:32:00
CONFIDENTIAL
Embassy Moscow
Cable title:  

PM SINGH'S VISIT HIGHLIGHTS THE LIMITS OF

Tags:  PGOV PREL ENRG MASS IN RS 
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VZCZCXRO9062
PP RUEHDBU
DE RUEHMO #5435/01 3211232
ZNY CCCCC ZZH
P 171232Z NOV 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 5324
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 4320
RUEHIL/AMEMBASSY ISLAMABAD 2363
RUEHNE/AMEMBASSY NEW DELHI 1134
C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 005435 

SIPDIS

SIPDIS

E.O. 12958: DECL: 10/18/2017
TAGS: PGOV PREL ENRG MASS IN RS
SUBJECT: PM SINGH'S VISIT HIGHLIGHTS THE LIMITS OF
RUSSIA-INDIA RELATIONS; GOR LOOKS TO INCREASE NUCLEAR TIES

REF: A. MOSCOW 5218

B. NEW DELHI 4761

C. MOSCOW 5154

Classified By: Ambassador William J. Burns for reasons 1.4 (b/d).

C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 005435

SIPDIS

SIPDIS

E.O. 12958: DECL: 10/18/2017
TAGS: PGOV PREL ENRG MASS IN RS
SUBJECT: PM SINGH'S VISIT HIGHLIGHTS THE LIMITS OF
RUSSIA-INDIA RELATIONS; GOR LOOKS TO INCREASE NUCLEAR TIES

REF: A. MOSCOW 5218

B. NEW DELHI 4761

C. MOSCOW 5154

Classified By: Ambassador William J. Burns for reasons 1.4 (b/d).


1. (C) Summary: Deputy Foreign Minister Aleksandr Losyukov
told the Ambassador that Indian Prime Minister Singh's
November 11-12 trip to Moscow was a "useful visit" that saw
progress on a potential agreement for Russia to sell four
additional nuclear reactors to India. The visit included the
signing of several agreements for economic cooperation and
high-tech development projects, although the nuclear
agreement was delayed at the request of the Indian
government, according to MFA sources. The GOR wants to
increase nuclear sales to India and hopes the U.S.-India 123
Agreement will remove international restrictions on the
supply of nuclear material to India. Analysts questioned how
much Russia would benefit from such an agreement, as the
country will have to compete for Indian business with the
U.S. and other nuclear suppliers. Analysts typically
characterized Russia-India relations as limited to military
sales and were skeptical Russia could compete for Indian
trade with the U.S. The GOR appeared to be adjusting,
however, to improved U.S.-India relations while looking for
ways to improve economic ties that could keep its old friend
from drifting away. End summary.

PM Singh Visits Moscow
--------------


2. (U) Indian Prime Minister Singh's November 11-12 Moscow
visit included a lengthy, private meeting with Putin and
public agreement by the two leaders that India and Russia
had, in Putin's words, "close or identical positions on all
key issues," including developments in Afghanistan, Iraq and
the Iranian nuclear program. No political declaration
followed the meeting, but there were agreements to:
"consider extending" Indian cooperation and investment in the
Sakhalin 1 oil field as well as in Russian energy projects in
other countries; open research centers to jointly develop new

technology in the fields of nonferrous metals, biomedical,
accelerators and lasers; jointly design a space vehicle to
send a research laboratory to the Moon; and, perhaps most
significantly, to jointly develop a new multi-purpose
military transport plane, the Indian contribution for which
would be financed by a unique agreement for India to
contribute to the project the debt it owes to Russia.
Conspicuously absent, however, was an agreement for Russia to
build four additional nuclear reactors in India.

MFA on Singh's "Modest" Visit
--------------


3. (C) Deputy Foreign Minister Losyukov told the Ambassador
that excessive Indian attention to protocol (and unhappiness
over the GOR's designation of PM Zubkov as Singh's
counterpart) complicated the visit, which he described as
"useful, but not easy." MFA India Desk Chief Aleksandr Hozin
dismissed the (primarily Indian) media's fixation on supposed
diplomatic slights suffered by the Indian delegation to
Moscow and told us Singh's was a "successful" if "modest"
visit. While Putin and Singh may not have signed a major
political declaration, annual meetings of the Indian and
Russian leaders maintained the bilateral relationship and
provided a venue to promote economic ties. Hozin stressed
that there existed "no irritants" in the relationship and
that Russia and India were working to resolve "issues" that
ordinarily exist between "strategic partners." The GOR was,
for example, addressing Indian concerns that Russia's strict
visa regime thwarted regular business travel, thereby
limiting economic development. The GOR was also ironing out
problems in Russian defense contracts with India including
production delays and payment disputes (ref B).
India Asked for Delay in Nuclear Deal
--------------


4. (C) DFM Losyukov maintained that progress was made on the
nuclear talks, with Rosatom Director Kiriyenko "confident"
that a deal would be reached. Likewise, Desk Chief Hozin
characterized as "totally incorrect" media speculation that
the failure by the GOR and GOI to sign an agreement for
Russia to provide India with four nuclear reactors was a sign
of the "chill" in bilateral relations. Hozin said that the
Indians requested that the deal be delayed to avoid further
antagonizing domestic opponents of nuclear sales who had
already delayed the Indian Parliament's approval of the
U.S.-India 123 Agreement. Hozin said that the Indians
explained they would seek "broader agreement" within the

MOSCOW 00005435 002 OF 003


international community to end restrictions on civilian
nuclear sales to India and hoped the GOR, as well as the
U.S., would assist them. DFM Losyukov stressed to the
Ambassador that Russia valued its nuclear relationship with
India and wanted an overall agreement with the Nuclear
Suppliers Group, developing "in parallel" with U.S. efforts.

GOR Looks to Nuclear Sales
--------------


5. (C) Russian officials told us the GOR hoped the U.S.-India
123 Agreement would go forward. The agreement would remove
international restrictions on the transfer of nuclear
technology to India and allow Russia to sell four new nuclear
reactors to India. Hozin called this the "two track
approach," in which the GOR continued to work on a nuclear
deal with India while the Indians worked on getting the 123
agreement through the Indian Parliament. Hozin explained
that the GOR believed its long-standing civil nuclear
relationship with India put it in a position to make major
new sales when restrictions were lifted. (Note: Russian
construction of two reactors at Kudankulam, begun in 2002,
was based upon an agreement signed by the USSR and India in

1988. When the Nuclear Suppliers Group (NSG) adopted its
requirement for full-scope nuclear safeguards in 1992,
thereby prohibiting nuclear sales to India, the GOR argued
the new requirement did not apply to its 1988 agreement and
received an exception from the NSG. End note.)


6. (C) Analysts took opposing views as to whether Russia
would be a beneficiary of the U.S.-India 123 agreement.
Vladimir Orlov, President of the Center for Policy Studies,
said that Russia already had an extensive civilian nuclear
relationship with India that included the current
construction of two nuclear reactors at the Kudankulam
nuclear power plant and an agreement to supply four more.
This would put Russia in a strong position to compete with
other nuclear suppliers such as the U.S. and France should
restrictions on new nuclear trade be lifted. Both Vladimir
Yevseev of the Russian Academy of Sciences and Sergey
Luzyanin, Director of the Oriental Research Foundation,
disagreed and said that the lifting of restrictions would
generate competition for Indian nuclear business by other
countries, particularly the U.S. Yevseev asked why, if
Russia was in such a strong position to make additional
nuclear sales to India, the GOR had not tried to reach its
own nuclear cooperation agreement with the Indian government?

Analysts: Russia-India Ties Limited
--------------


7. (C) Analysts have consistently told us that Russian
relations with India were more limited than the GOR claimed
and that expanding economic ties was a GOR priority. They
characterized the relationship as still based on military
ties developed during the Cold War. Analysts pointed not
only to the "modest" Singh visit, but also to the October
visits to Moscow by Indian Defense Minister A.K. Antony and
Foreign Minister Pranab Mukherjee as evidence of the state of
bilateral relations. Antony's visit included discussions of
big ticket Russian weapons sales to India and the
announcement of joint Russian-Indian development of a next
generation fighter jet (ref B). Following a meeting with his
Indian counterpart, Russian Defense Minister Anatoliy
Serdyukov praised the Russia-India defense relationship and
proclaimed joint military development projects the most
important elements of bilateral cooperation. In contrast,
the visit of FM Mukherjee produced few results. Following
the annual session of the India-Russia Intergovernmental
Commission, Mukherjee and Deputy Foreign Minister Aleksander
Zhukhov spoke only of having identified "new areas" for
economic cooperation and pledged to increase bilateral trade
from $4 billion to $10 billion by 2010.


8. (C) Vyacheslav Belokrinitskiy of the Russian Academy of
Sciences told us Russia-India ties continued to be limited to
the relationship developed during the Cold War. GOR weapons
sales to India were the main area of trade - Russia would
like other aspects of the economic relationship to increase,
but these would never rise to the level of the U.S. or other
countries. Russian trade with India was also limited by poor
sea routes. If Russia wanted significantly to increase
Indian commerce, an overland route through Iran would be
necessary, which Belokrinitskiy argued was a factor in the
GOR's cautious approach toward the Iranian government.
(Note: A potential transit corridor through Iran was
discussed at the October Caspian Sea Summit in Tehran. See
ref A. End note.) Ultimately, Belokrinitskiy said that
Russia-India relations would not deteriorate but only appear

MOSCOW 00005435 003 OF 003


diminished as U.S.-India relations improved.


9. (C) Aleksandr Belkin, Deputy Executive Director of the
Council On Foreign and Defense Policy, explained that
Russia-India political and economic relations had not
deteriorated - Russia was simply not able to provide all of
the civilian and military technology India now desired. As a
result, India turned to the U.S. as a potential partner to
pursue its development goals. Belkin said that Russia-India
relations were historically driven by Russian concern over
China. The level of trade Russia enjoyed with India resulted
from the two countries turning toward each other to limit
Chinese influence in Asia. Present Chinese economic growth
and international influence rendered this approach
ineffective.


10. (C) Gennadiy Chufrin, Director of the Institute of World
Economy and International Relations, said that improving
economic ties with India was the GOR priority in South and
Central Asia and drove Russian relations with other countries
in the region. Vladimir Yevseev told us India remained
important to the GOR but did not rank as highly as China.
Russia and India did not share a common border and had
limited economic ties. Even in the military sphere,
relations were relatively weak and Russian arms sales to
India had declined (ref C). Yevseev predicted that Russia
would continue to lose its share of arms sales as India
turned to other countries, particularly the U.S., to
diversify its military.

Comment
--------------


11. (C) While the modest outcome of the Singh visit
demonstrated the current limits of the Russia-India
relationship, the focus on joint technological development
and nuclear sales showed that the GOR is serious about
expanding its relationship with a traditional ally and
trading partner. By relying on arms and nuclear sales to
India, the GOR is following a pattern in Russian policy in
which these strategic industries are used to assist both
Russia's economic growth and the projection of influence
abroad.
BURNS