1. (C) SUMMARY: Foreign Secretary Menon told Ambassador
Mulford that India would "stick by its agreements" with the
U.S. on Nepal. In a separate meeting, the Ambassador
expressed concern to National Security Advisor (NSA) M.K.
Narayanan about a new GOI flexibility with regard to the
Maoists' full compliance with their agreements before
entering government. Ministry of External Affairs Joint
Secretary Pankaj Saran told PolCouns that it was up to Nepal

SIPDIS
to decide when Constituent Assembly elections should be held,
but that the Government of India (GOI) preferred that they be
held sooner rather than later. He denied that the GOI was
pressuring the Government of Nepal (GON) to allow the Maoists
into the government before they had adhered to their
commitments. He claimed that free and fair elections would
be a challenging task in Nepal in any case, suggesting that
"there are limits to a perfect solution." He suggested it
would be impossible to achieve "100 percent compliance" by
the Maoists with their agreements to return seized land,
cease extortion and turn in all their weapons. He
acknowledged that the violence in Nepal's Terai region was an
issue of concern for the GOI, as was the possibility of
Maoists breaking into splinter groups, which might threaten
India's national security. Post perceives a divergence
between U.S. and GOI thinking on Nepal, attributed in part to
India's fears of Maoists breaking into splinter groups if
their entry into government occurs later than planned. END
SUMMARY.

FS Menon: "India Will Stick By Its Agreements"


--------------------------





2. (C) Speaking with Ambassador Mulford on March 27, Foreign
Secretary Menon told him that the GOI would "stick by its

SIPDIS
agreements" with the U.S. on Nepal. On March 30, the
Ambassador expressed concern to NSA M.K. Narayanan that the
GOI had backed off its insistence that the Maoists fully
comply with their agreements before entering government.
Narayanan replied that, to his knowledge, the U.S. and India
remained in sync, but promised to check on it and confirm.

Nepalese "Ownership of the Process" Key According to Saran


--------------------------





3. (C) On March 29, PolCouns delivered reftel a demarche and
told Ministry of External Affairs (MEA) Joint Secretary
(North) Pankaj Saran that the U.S. believes the inclusion of
Maoists in Nepal's government should not occur until they
return land back to owners they have evicted, they cease the
practice of extortion, and they turn in all of their weapons
and cease to wear uniforms. PolCouns said that the U.S.
believed this behavior precluded the inclusion of the Maoists
as equals with other political parties that play by the
rules, and that their inclusion into the GON at this time
would legitimize their abuses, allow them to use the

NEW DELHI 00001534 002 OF 003


machinery of the state to pursue their narrow agenda, and
further convince them that they can get what they want
without changing their behavior. Saran noted that New Delhi
had a good record of regional consultation with the United
States about Nepal, adding that the Government of India (GOI)
and the U.S. shared similar views on Nepal for the most part,
though there were some "different perceptions." He pointed
out that Ambassador Moriarty and Indian Ambassador to Nepal
Mukherjee have had a "good understanding of one another" over
the last two years, which had proved useful.



4. (C) Saran assured PolCouns that the GOI's message to the
Maoists had not changed - the GOI expected the Maoists to
adhere to their commitments, and there should be no gap
between commitment and implementation. "They must show their
commitment on the ground," said Saran, admitting that the
Maoists' progress had been a mixed picture, and that the GOI
was aware of gaps, variations, and degrees of compliance on
the part of the Maoists. The GOI's goal is to ensure the
peace process worked, indicated Saran. Stability in Nepal
was an issue of importance to India and especially to
national security, and there was not much leeway to make
mistakes, as the stakes were high, he asserted. He
underlined that the success Nepal had seen so far was
primarily due to the Nepalese "ownership of the process,"
something which was critical to Nepal's success.

"Marginally Flawed" Elections Preferable to an Uncertain Delay


--------------------------





5. (C) "At the end of the day, we have to accept what the
parties themselves wish to do," averred Saran, indicating
that the GOI would support June elections if the Nepalese
decided to hold them then. "If their (Nepal's) view is that
there is a need to move on, that is up to them to decide,"
Saran stated, adding that the GOI's position was that an
early election was better than a late election. Saran
remarked that the "more time the Maoists get, the worse it
will be for the parties," adding "even a marginally flawed
election is preferred over an uncertain delay with no closure
in sight." He said he thought it was unrealistic to think
that Nepal's first exercise of elections would be flawless.
"Free and fair elections will be a highly challenging task,"
claimed Saran, suggesting, "there are limits to a perfect
solution."

A Hands-Off Policy


--------------------------





6. (C) Asked by PolCouns if the GOI was pushing the
Government of Nepal (GON) to hold elections in June, Saran
responded, "No one in the Indian government has given a
cut-off date. We have outlined certain principles, but it is
up to them," noting that the GON alone would have to bear the
consequences of, and take the responsibility for, its
decisions. "It would not be appropriate for you, nor for us,
to second guess or sit in judgment" on Nepal, opined Saran,
arguing, "We've done our job." The time had come to leave it
to Nepal to decide, he continued, affirming that the GOI

NEW DELHI 00001534 003 OF 003


would not push the GON to hold elections, despite the GOI's
preference to see elections held earlier rather than later.
"We will abide by and respect their judgment. We will not
force their hand," maintained Saran.

India's Concern - Maoist Splinter Groups


--------------------------





7. (C) Asked about linkage to India's concerns regarding
instability in the Terai, Saran averred that "it was and will
remain an issue of direct concern" to the GOI, referring to
the Indo-Nepal border as a "hot line to India." An inclusive
peace process was a desirable outcome, he remarked,
underlining that the possibility of Maoist splinter groups
breaking off was an issue of primary concern for the GOI. In
any case, Narayanan pointed out that India has more at stake
in Nepal than the U.S. does.

A Divergence In U.S. and Indian Thinking On Nepal


--------------------------





8. (C) Comment: Post assesses that the GOI wants elections
to happen quickly to increase the likelihood of keeping the
Maoists from splintering and, therefore, ensuring their
successful entry into the government. The GOI shifted its
policy toward Nepal, showing a willingness to accommodate a
certain degree of Maoist backsliding. As perceived by
Kathmandu (reftel b), Mukherjee's visits to New Delhi have
been part of a process leading to this shift in the GOI's
position. India's experience with violence in the Terai
region, especially the massacre in Gaur, and the possibility
that violence may spill over into India, may have contributed
to the shift towards a hands-off policy in Nepal, in which
the Indians are more amenable to allowing the Maoists to join
the interim government, and, hence, to hold elections in
June. India is concerned that the Maoists will break into
splinter groups, such as those that have caused violence in
the Terai, which could become a threat to India's security.
The GOI may also be feeling the heat from the opposition BJP
on the Terai, and therefore especially anxious to be able to
declare a foreign policy victory after the formation of a
government in Kathmandu. End comment.
MULFORD