NEW DELHI NERVOUSLY WATCHING DEVELOPMENTS IN

C O N F I D E N T I A L SECTION 01 OF 04 NEW DELHI 004756

SIPDIS

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E.O. 12958: DECL: 10/25/2027
TAGS: PREL PGOV PINR PTER PK IN
SUBJECT: NEW DELHI NERVOUSLY WATCHING DEVELOPMENTS IN
PAKISTAN AS DIALOGUE PROCESS CONTINUES

REF: A. A: ISLAMABAD 01466

B. B: NEW DELHI 04654

Classified By: ACTING POLCOUNS Atul Keshap for reasons 1.4 (b,d)


1. (C) SUMMARY: India-Pakistan relations continue to exude
positive vibrations, but officials in New Delhi are closely
watching developments in Pakistan for storm clouds on the
diplomatic horizon. The Composite Dialogue process continues
unabated despite distractions at the political level in both
capitals. Although few new deliverables came out of the
mid-October talks, new measures included Pakistan's proposal
to ban the use of outer space for military purposes and
establish an anti-ballistic missile zone over the
subcontinent. Directly after these meetings, a spokesman
from Pakistan's Ministry of Foreign Affairs proclaimed that
bilateral relations "have never been so good," a description
that Indian interlocutors did not refute. Nonetheless, New
Delhi's chattering class have warned that growing instability
in Pakistan poses a significant threat to Indian interests
and could derail the growing detente and dialogue process.
Some here characterize Benazir as Pakistan's Mayawati --
mercurial and untrustworthy. Above all else Indian officials
want stability in Pakistan and will work with any leader in
Islamabad -- no matter the democratic credentials -- who can
provide stability while fending off the Islamist threat.
Although the window of opportunity for any serious diplomatic
breakthrough in India-Pakistan relations appears for now to
be closed due to political uncertainty in Delhi and
Islamabad, there is enough bureaucratic architecture between
the two countries to insulate the process from routine
political instability. End Summary.

Composite Dialogue: All Hat, No Cattle
--------------


2. (C) As part of their commitment to sustaining the
Composite Dialogue (CD) process, Indian and Pakistani
diplomats from the respective sides' home, defense, and
foreign ministries held a series of meetings in New Delhi
this past week that addressed confidence building measures,
counterterrorism cooperation, and criminal investigation
procedures. Bilateral talks on conventional and nuclear
confidence building measures (CBM) -- as outlined in the
Lahore Memorandum of Understanding of 1999 (ref A) -- took
place at the Joint-Secretary level on October 18 and 19
respectively, following up on a third round of similar talks
in Islamabad last April. On October 22 the two sides met to
discuss counterterrorism issues as part of the Joint
Anti-Terrorism Mechanism (JATM) established by Prime Minister
Manmohan Singh and President Musharraf in 2006, marking the
second round of such talks. On October 24 and 25, the home
secretaries and home ministers from both sides will meet in

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New Delhi as part of the South Asian Association for Regional
Development (SAARC) home ministerial, which is scheduled to
discuss regional law enforcement and crime investigation
issues.


3. (C) The various bilateral meetings appeared to be high
on talk but low on action, underscoring the
slow-yet-deliberate pace of CD talks. Indian Ministry of
External Affairs (MEA) Deputy Secretary for Pakistan G.
Balasubramanian told Poloffs on October 24 that the only new
conventional CBM that emerged from the October 18 meeting was
an agreement by both sides to prevent new construction of
facilities within 500 meters of the border. Despite
pre-meeting expectations among some Indian pundits, he
relayed that there was no forward movement on the signing of
a formal agreement on processing citizens from either side
who inadvertently stray across the border or on maritime
rules of engagement. Talk without serious action also marked
the nuclear CBM round of negotiations. Balasubramanian
relayed that many issues were discussed -- including a
moratorium on testing and a reiteration by India of its no
first-use nuclear policy -- but the only deliverable from

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this round of talks was the usual exchange of the geographic
coordinates for either side's nuclear facilities. In JATM
talks, the Indians reiterated their request for Pakistan to
provide results of its investigation into various terrorist
attacks in India, including the Mumbai train bombings in July
2006 and the Friendship Express bombing last February.
Balasubramanian mentioned that the Indian delegation had
presented the Pakistanis detailed dossiers on suspected
terrorists.

Pakistanis Privately Frustrated by Lack of Results
--------------


4. (C) Pakistani officials privately were less sanguine in
their read-out of the meetings. Janbaz Khan of the Pakistani
High Commission in New Delhi told Poloffs on October 24 that,
while the talks were positive, many in the Pakistani
delegation are becoming increasingly frustrated by the
perceived Indian reluctance to provide deliverables and
resultant lack of substantive progress after several rounds
of talks. He believed that the Indians were not
demonstrating the same degree of flexibility on issues as
Pakistan and placed much of the blame on the lumbering Indian
bureaucracy, its innate distrust of Pakistan, and the general
Indian fear of taking chances. He stated that Pakistan
believes that there are a few issues -- including Sir Creek
and the Siachen Glacier standoff -- on which New Delhi could
move forward. On the Sir Creek issue, for example, he
claimed that a final agreement "should have been signed by
now" but that New Delhi has not provided "the final political
push" to see it to fruition. Further dialogue should be tied
to results rather than just empty discussion, and there is no
better time than the present -- when Musharraf is still in
power and can produce results -- he complained.

Process Becomes the Deliverable
--------------


5. (C) Despite Pakistani frustration and the lack of any
major breakthrough in talks so far, both sides were quick to
emphasize the positive nature of the talks and to reaffirm
their commitment to future meetings no matter the level of
political instability in India or Pakistan. The joint
statement released by both sides following the meetings
proclaimed that talks were held in a cordial and constructive
atmosphere and promised future meetings on yet-unspecified
dates. Balasubramanian described the talks as "very open,
free, and friendly," while Janbaz Khan reported that the
talks' atmosphere was relaxed and friendly and that "the
process has progressed further than either side could have
predicted." Balasubramanian expressed little concern about
the lack of substantive progress in the various meetings,
stating that there indeed had been incremental progress and
that in the case of the JATM, the initiative is still in its
formative stages, meaning little can be expected of it so
early in its establishment. Pakistani Ministry of Foreign
Affairs spokesman Mohammed Sadiq on October 23 told reporters
that the bilateral relationship was very complex and that
officials "should not expect results overnight." Khan
emphasized that there has been considerable progress
behind-the-scenes, especially in nuclear CBM talks. He
stated that in nuclear talks the two sides have reached a
stage where they are ready to introduce a new phase of CBM
ideas. In that vein, he relayed that the Pakistani
delegation proposed CBMs banning the use of outer space for
military purposes and an anti-ballistic missile zone over the
subcontinent, suggestions that he said the Indians dismissed.


6. (C) Neither side predicts a breakdown or stall in the
dialogue process. Both Balasubramanian and Khan told Poloffs
that the process will continue no matter what occurs at the
political level in Islamabad or New Delhi. Balasubramanian
was quick to point out that entire fourth round of talks took
place despite the political instability surrounding the stand
off between Musharraf and the Supreme Court, the Presidential

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election in Pakistan, or Benazir Bhutto's return to Pakistan.
V.K. Grover, a former MEA diplomat with ties to the current
government, in a conversation with D/PolCouns on October 22,
echoed the prediction that the two countries' bureaucracies
would continue to talk but cautioned not to expect any true
progress until developments in Pakistan work themselves out.
Saeed Naqvi, a political commentator, reached the same
conclusion in a discussion with D/PolCouns on October 23 but
followed a different rationale, stating that there was
unlikely to be any forward movement in the dialogue process
because the United Progressive Alliance (UPA) government
lacks a comprehensive vision for the peace process and
because India is quickly entering election season (ref B),
which will distract the government and prevent it from any
potentially provocative initiatives.

A Widening Detente
--------------


7. (C) The greater India-Pakistan relationship -- beyond
the minutiae of CBM and counterterrorism issues -- continues
to enjoy a detente. The Pakistani Ministry of Foreign
Affairs proclaimed on October 23 that bilateral relations
"have never been so good," an assertion that Janbaz Khan
privately seconded. Balasubramanian similarly agreed,
stating that there have been "positive movements on every
front," producing "a great amount of confidence." He cited
as an example the October 1 opening of the border for truck
deliveries for the first time sine Partition, which he said
represented a "quantum leap in trade" even though the change
of procedure was minor.

Indians Wary of Events in Pakistan
--------------


8. (C) Despite all the fanfare and bonhomie professed by
both sides' officials following this past week's meetings,
many Indian observers are expressing concern about
developments in Pakistan, its long-term stability, and the
potential consequences of an unstable Pakistan for India.
Indian interlocutors underscored India's desire to see
stability on its Western border and willingness to work with
any Pakistani leader who could provide it. Balasubramanian
professed that although it is up to Pakistan to determine its
leader, New Delhi prefers a democratically elected leader but
more importantly wants someone who can ensure stability and
continue the bilateral dialogue. He admitted that the
situation in Pakistan was "touch and go," that he was hopeful
it would resolve itself peacefully, and that New Delhi has
refrained from publicly commenting on Pakistan's internal
situation -- a stance for which the visiting Pakistani
delegation reportedly expressed its appreciation. On the
issue of Benazir Bhutto's return to Pakistan, he simply said
that his government welcomes her return.

Indians Worried as Pakistan's Mayawati Returns
--------------


9. (C) Other Indian interlocutors, however, were not as
diplomatic. Grover and Naqvi expressed great concern about
the future of Pakistan and the potential return of Bhutto as
a key Pakistani interlocutor. Grover argued that President
Musharraf -- whom India has come to see as a positive force
for bilateral relations -- has become a liability for
Pakistan's Army and worried about how long the President can
count on the Army's support. A Pakistan consumed by
political turmoil, he cautioned, will play into the hands of
the Islamists -- a scenario as equally bad for India as the
United States. He blasted Bhutto as an unreliable,
opportunistic leader, calling her Pakistan's version of
Mayawati, the current Chief Minister of Uttar Pradesh who has
become notorious for repeatedly abandoning her political
promises in her constant search for the political advantage.
He admitted that recently she has been making "the right
noises" about India but stated that history reveals her to be

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one of India's biggest foes in Pakistan.


10. (C) Naqvi similarly described the general distrust that
many Indians have of Bhutto, stating that she is not a
"benign presence." He expressed concerned about the
instability that probably would result from having a
bifurcated leadership in Islamabad between two former
political rivals and argued that such a political condominium
would slow Islamabad's ability to engage in the composite
dialogue. The pundits differed on views of the effect a
return by Nawaz Sharif to Pakistani politics would have on
bilateral relations. Grover believed that a Musharraf-Bhutto
alliance would still be better than an agreement between
Musharraf and Sharif, but Naqvi argued that Sharif -- who
engaged in peace negotiations in 1999 before Kargil --
enjoyed more political respect in New Delhi than Bhutto.
Nevertheless, both agreed that New Delhi would settle for any
leader who could provide stability and fend off the Islamist
threat; in the meantime, India is in "wait-and-see mode"
until the situation plays itself out.

Comment: Missed Opportunities
--------------


11. (C) Although the window of opportunity for any serious
diplomatic breakthrough in the Composite Dialogue process has
narrowed, a continuation of negotiations -- no matter how
empty the discussion -- serves as a welcome and positive
placeholder until a more conducive environment develops and
both sides demonstrate the political will to move the process
forward. The confidence expressed on both sides that the
process will continue, New Delhi's willingness to resist the
urge to comment on or meddle publicly in Pakistan's current
political transition, and Islamabad's decision to swallow its
frustrations and continue to participate in the process are
all a testament to the growing maturity that characterizes
the relationship. Current bonhomie aside, many potential
landmines lay ahead -- chief among them the return of exiled
personalities in Pakistan. It is troubling that even after
years of talks during times of relative political stability
in both countries, much of the low hanging fruit for CBMs has
not yet been plucked. Both sides may look back on the
2003-2006 timeframe as a period of missed opportunities.
MULFORD