Identifier
Created
Classification
Origin
07NEWDELHI5335
2007-12-17 12:41:00
CONFIDENTIAL
Embassy New Delhi
Cable title:  

MENON ND CHAVAN ASSURE U.S. FIRMS OF NUCLEAR

Tags:  PREL PARM TSPL KNNP ETTC ENRG TRGY BEXP EINV 
pdf how-to read a cable
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TO RUEHC/SECSTATE WASHDC IMMEDIATE 9733
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNNSG/NUCLEAR SUPPLIERS GROUP COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
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RUEHUNV/USMISSION UNVIE VIENNA 1362
RUCNDT/USMISSION USUN NEW YORK 5814
C O N F I D E N T I A L SECTION 01 OF 02 NEW DELHI 005335 

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E.O. 12958: DECL: 12/17/2017
TAGS: PREL PARM TSPL KNNP ETTC ENRG TRGY BEXP EINV
ETRD, IN
SUBJECT: MENON ND CHAVAN ASSURE U.S. FIRMS OF NUCLEAR
BUSINESS WITH INDIA

Classified By: Charge d'Affaires Steven White for Reasons 1.4 (B and D)

C O N F I D E N T I A L SECTION 01 OF 02 NEW DELHI 005335

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E.O. 12958: DECL: 12/17/2017
TAGS: PREL PARM TSPL KNNP ETTC ENRG TRGY BEXP EINV
ETRD, IN
SUBJECT: MENON ND CHAVAN ASSURE U.S. FIRMS OF NUCLEAR
BUSINESS WITH INDIA

Classified By: Charge d'Affaires Steven White for Reasons 1.4 (B and D)


1. (SBU) Summary: Foreign Secretary Shivshankar Menon and
Minister of State in the Prime Minister's Office Prithviraj
Chavan assured a visiting trade mission of nuclear-related
firms December 10-11 that India would purchase U.S. reactors.
Menon recognized that a "letter of intent" would help the
U.S. government push the 123 Agreement through the U.S.
Congress. Menon also downplayed the likelihood of concluding
the Iran-Pakistan-India pipeline, though he cautioned that
political necessity required India to consider all energy
options. Chavan asserted that the Indian government remains
committed to completing the nuclear deal, and cited recent
progress in talks with the Left. Menon requested more
information about the U.S. nuclear industry to counter
critics who claim that the U.S. lags behind other countries
in nuclear technology. End Summary.

Chavan Asserts Political Support
- - -


2. (SBU) In a December 10 meeting with a U.S.-India Business
Council (USIBC)-sponsored delegation of representatives from
U.S. nuclear-related firms, Prithviraj Chavan, Minister of
State in the Prime Minister's Office (PMO),assured that the
GOI was fully committed to seeing the deal through to
completion. Chavan felt that they had made significant
progress towards consensus-building since July of 2005,
specifically citing the support of the once-reluctant
scientific community and recent "very fruitful" meetings with
the Left. The delegation asked about a special "carve out"
for American companies in Indian nuclear commerce, explaining
that it was difficult to conduct the heavy-lifting on Capitol

Hill without a guarantee of the deal's intended benefits.
The Minister responded by noting that there was plenty of
work for international companies through partnerships with
the Indian private nuclear sector and encouraged those
present to engage with these companies during their time in
India. The delegation also questioned Chavan on the topic of
a government-to-government memorandum of understanding which
would allow for expedited plant construction and planning.
Chavan indicated that until there was a waiver from the
Nuclear Suppliers Group (NSG),such a prospect was "up in the
air." But he noted that such a memorandum was in place
between India and Russia and appreciated that it would be
beneficial when moving forward in nuclear commerce with
American companies.


3. (SBU) Fletcher Newton, president of Uranium One, warned
that world uranium consumption was outstripping supply and
cited recent reports of China attempting to "lock up" sources
of uranium throughout the world. The Minister responded to
these concerns by assuring the delegation that India has
started investigating all possible sources of uranium,
including indigenous mines and international sources. The
energy representatives also asked Chavan about the
identification of future reactor sites. The Minister
reported that India had recently identified a site in
Maharashtra, a demonstration of progress in moving plans
forward. Chavan added that other potential sites in the
pipeline await final approval from government entities.

Menon Understands Need for Letter of Intent
- - -


4. (C) Meeting with the delegation December 11, Foreign
Secretary Shivshankar Menon underlined the government's

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determination to move ahead with IAEA negotiations in spite
of the combative words from Communist leader Prakash Karat.
"I cannot think of one initiative that has this level of
popular support," he claimed, noting that every state wants
nuclear reactors. He recalled that eight months earlier U.S.
and Indian negotiators despaired over the stalled
negotiations of a 123 Agreement, but both sides showed the
ability to accomplish it. "We want to get this done, and
done quickly," he stressed. Asked about the status of
nuclear liability legislation, Menon reported that the
Department of Atomic Energy (DAE) has started working on the
draft text.


5. (C) Asked about the letter of intent that would promise

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Indian purchases of U.S. reactors, Menon said that he
understood that the U.S. government did not want to go to the
U.S. Congress "empty-handed." He expected that U.S. firms
"would have to be involved in the nuclear industry in India,"
and reported that the letter of intent was currently in the
political process. While the Russians already have the
option of adding four reactors in the Kudankulam site under
the 1992 agreement, Menon promised the U.S. firms "you will
have first entry; there is no questions in anyone's mind."
Westinghouse's Rao Mandava urged Menon to list particular
sites in the letter. Menon noted that the Indian government
would sign a general letter today, but has decided to wait
for the government to approve the specifics that U.S. firms
sought. Menon asked the firms to provide more material about
what the status of the nuclear industry in the U.S. in order
to counter Indian skeptics who claim that the U.S. has not
built a reactor for decades.


6. (C) USIBC President Ron Somers cautioned Menon that
India's continued engagement on the Iran-Pakistan-India (IPI)
pipeline could hurt support in the U.S. Congress. Menon
noted that the prefeasibility study had occurred in 1993 and
questions about pricing and security remained outstanding,
which meant "there is little risk of building the pipeline."
However, Menon continued, the Indian government could not
dismiss an energy source, particularly with its energy needs
growing four percent annually. "Please do not expect me to
say that the Indian government will never do this," he
stated.

Comment: Indian Government Gives U.S. Industry the Time
- - -


7. (C) The attention paid to the nuclear industry visitors,
even at a sensitive moment in India's safeguards negotiations
and battles with the Left, shows that the Indian government
has given thought to the actual opening of India's nuclear
sector. Coupled with the productive meetings in Mumbai,
Menon's forward-leaning comments about a letter of intent
help assuage concerns that the Russians and French have
already pushed their way to the front of the line in India's
nuclear market. While this visit transpired with little
media attention, once India's political turmoil settles, we
should take on Menon's suggestion and prepare a public
information campaign that dispels the popularly held notion
that U.S. nuclear technology is outdated and the industry
moribund. In the meantime, we will keep pushing for a
liability law and letter of intent, while quietly spreading
information on the nuclear renaissance in the U.S.
WHITE