AMBASSADOR PRESSES FOR 123 CONCLUSION, SIGHTS ON

C O N F I D E N T I A L SECTION 01 OF 02 NEW DELHI 002830

SIPDIS

SIPDIS

E.O. 12958: DECL: 06/18/2012
TAGS: PREL PGOV PTER EARG KNNP TSPA SENV SCUL IN
SUBJECT: AMBASSADOR PRESSES FOR 123 CONCLUSION, SIGHTS ON
BROADER AGENDA WITH NSA NARAYANAN

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


1. (C) Summary. In a June 15 meeting with National Security
Advisor MK Narayanan, the Ambassador:

-- pressed for the earliest possible conclusion to 123
Agreement negotiations and pressed the Indian to clarify
their notion of a stand-alone fully safeguarded reprocessing
facility;
-- urged forward thinking on potential discussion topics for
the proposed meeting between the President and Prime Minister
Singh at Crawford in August; and
-- noted that these initiatives were ripe for agreement at
the leaders' meeting: CSI, Global Initiative Against Nuclear
Terrorism, expanding the Fulbright program, AKI, CISMOA, LSA,
wheat exports to India, space cooperation, the President's
Global Climate Change Initiative, and greater cooperation on
counterterrorism and nonproliferation.

Narayanan:

-- agreed on the need to look at the broader bilateral agenda;
-- suggested that nearly all the initiatives the Ambassador
listed could be ready for agreement very soon, although a few
would need further consideration;
-- said he believed a conclusion to 123 negotiations was
achievable soon; and
-- told the Ambassador he plans to travel to Washington the
week of July 7 to meet with NSA Steven Hadley. End Summary.

The Need To Look Beyond 123
--------------


2. (C) Ambassador met with NSA Narayanan June 15 to push for
the earliest possible finalization of the 123 Agreement, so
that the focus return to the broader, diverse bilateral
agenda. Emphasizing that Secretary Rice would not travel to
New Delhi before the 123 Agreement is settled, the Ambassador
stressed the need to begin thinking now -- before it becomes
too late to be practical -- about forward-looking topics for
the Crawford meeting between President Bush and Prime
Minister Singh being planned for late August. The Ambassador
listed several possible initiatives which are ripe for
agreement, including the Container Security Initiative (CSI),
a new agreement on the Fulbright scholars program, the Global
Initiative to Combat Nuclear Terrorism, a successor to the
Agriculture Knowledge Initiative (AKI) that includes private
sector participation, the President's initiative to fight
global climate change, the sale of American wheat to India,
space cooperation, long-standing pending military-to-military
agreements such as CISMOA and LSA, and greater cooperation on
counterterrorism and nonproliferation. On the last point,
the Ambassador noted that Assistant Secretary John Rood's
visit, which had ended one day prior, had been highly
successful in terms of advancing our bilateral agenda on
nonproliferation.


3. (C) Narayanan said he hoped to be able to meet with A/S
Rood soon, adding that nonproliferation was an area of
expertise for him. Turning to the initiatives the Ambassador
had listed, Narayanan was receptive to the idea of thinking
ahead. Calling the Fulbright program "one of the best ideas
to come out of the U.S.," Narayanan assured the Ambassador of
his intention to pursue a new agreement on the program.
Narayanan noted the importance Prime Minister Singh has
attached to India's agriculture development and agreed on the
need to push forward on AKI. CSI is "something of vital
interest" to India, he stated, adding that CSI, along with
the Confidential Information Sharing Memorandum of
Understanding (CISMOA) and Logistics Support Agreement (LSA),
had been discussed in cabinet meetings and "is probably going
to be done one of these days." CSI should easily get cabinet
approval, he said, but wouldn't make any promises "because
sometimes there are 'riders' attached, so you just never
know." Narayanan asked for a paper from the Embassy
describing in greater detail the problems the U.S. was facing
in exporting wheat to India. For the other specific items
the Ambassador had mentioned, Narayanan said India really
needed to consider them closely. The Ambassador urged
Narayanan to consider get us India's ideas soon, as the
window to consider them in time to turn the issues into

NEW DELHI 00002830 002 OF 002


discussion topics for Crawford would quickly close.

Narayanan: 123 Conclusion Reachable
--------------


4. (C) Turning to the Indian concept of a dedicated
reprocessing facility, the Ambassador pressed India to flesh
out the proposal, noted that the topic was politically
sensitive in any circumstances, and observed that we had
heard from some that the proposed facility would only be for
U.S. fuel. The Ambassador urged him to think how the
facility might benefit the global focus on nuclear fuel cycle
issues, including the Global Nuclear Energy Partnership
(GNEP). "This offers big thinking about India's role in the
future," he said, and asked for Narayanan to provide more
details, which would necessary for the U.S. to start thinking
about its acceptability.


5. (C) Narayanan explained that he had come up with the
dedicated facility complex as a way of getting past the
proliferation concerns that lay behind the U.S. unwillingness
to grant advance consent. He responded that the facility
would likely reprocess all safeguarded fuel, no matter its
origin, because it must use its capacity to be economical.
(Note: Venkatesh Verma of the Prime Minister's Office
highlighted the importance of the facility's economics after
the meeting, noting that the Indian government did not want
to build a facility that would have excess unused capacity.
When poloff asked if the dedicated safeguarded facility was
conditional on ensuring its efficiency, Verma stated it was
merely a concern. End Note.) Narayanan warned the
Ambassador, "don't mix this up with GNEP" and clarified that
India had only proposed the concept as a way of getting
advance consent rights. He speculated that it would take
some time before India could put such a facility to use.


6. (C) Recalling his past conversations with Hadley about the
facility, including his June 9 meeting with Hadley in
Germany, Narayanan related "we agreed it was an eminently
suitable proposition." He remarked that Prime Minister Singh
and President Bush had also discussed the concept in Germany.
Narayanan said he also addressed the immunity of the
strategic fuel reserve with Hadley. After the conversations
in Germany, Narayanan said, "I felt more comfortable." "I'm
much more confident today than I was, and I think we can move
forward," he admitted.

Will Visit DC In July
--------------


7. (C) Narayanan mentioned that NSA Hadley had invited him to
Washington to discuss the 123 Agreement, and that he was
considering traveling immediately after July 7, likely with
Foreign Secretary Menon, who would be going to meet
concurrently with Under Secretary Burns.

Comment: 123 and Beyond
- - -


8. (C) As evidenced by the Prime Minister's confident
comments to reporters on his flight back to New Delhi, the
Indian government now believes 123 Agreement has boiled down
to two issues: advance consent right for reprocessing and
immunity of the strategic reserve. The perceived positive
U.S. reception on both matters entails a new turn in the 123
negotiations, and has garnered the attention of the Indian
leadership, which now thinks that an end is in sight. Both
sides appear eager to wrap up the 123 Agreement and clear the
slate to deliver a broad range of deliverables for the
Crawford summit.
MULFORD