CONGRESS SETBACK PROMPTS POSTPONEMENT OF INDIA'S

C O N F I D E N T I A L NEW DELHI 001429 SIPDIS E.O. 12958: DECL: 04/21/2018 TAGS: PREL PARM TSPL KNNP ETTC ENRG TRGY IN SUBJECT: CONGRESS SETBACK PROMPTS POSTPONEMENT OF INDIA'S NEXT NUCLEAR MEETING Classified By: Political Counselor Ted Osius for Reasons 1.4 (B and D) ¶1. (SBU) Bruised by election losses in Karnataka (septel) and blocked by the intransigent Left, the United Progressive Alliance (UPA) government postponed the UPA-Left nuclear committee meeting originally scheduled May 28. According to May 27 press reports, External Affairs Minister Pranab Mukherjee's office notified committee members May 26 to delay the meeting date. While unnamed UPA officials explained that "technical reasons" had prompted the rescheduling, the Communists speculated that the Karnataka loss forced the Congress Party's hand. "They may have realized that this is not the right time to pursue the nuclear deal," surmised Communist Party of India (CPI) national secretary D. Raja. While some reports specified the next meeting would occur June 11, most articles indicated that the date was not yet determined. ¶2. (SBU) The Communists had increased the pressure even before the May 25 announcement of the Karnataja results. After a two-day central committee meeting, Communist Party of India (Marxist) (CPM) general secretary Prakash Karat reiterated May 24, "We are not for operationalization of the deal." He dismissed recent Indian Express reports that domestic uranium shortage should compel the government to move ahead with the nuclear initiative. "A temporary mismatch between the national uranium supply and demand cannot be the basis to plunge the country into an India-U.S. deal with far reaching adverse implications," he said. ¶3. (C) Comment: The sudden deferment of the UPA-Left committee meeting exposes the Congress Party's feebleness as it faces grim prospects in the coming state and national elections. The snapshot prognosis on the nuclear initiative is dire. Sonia Gandhi seems to have no intention of taking the necessary, bold step that might save the deal but risk the government's survival. Mukherjee's links with the Left appear to have diluted his own enthusiasm for the initiative. Meanwhile, the Prime Minister went under the knife May 25 for a cataract operation, sidelining the strongest supporter for the deal in the UPA government. ¶4. (C) Comment (continued): While one might expect losing political parties to change their ways, the opposite has proven true. The Congress Party now seeks to stay in office as long as possible, regardless of how non-action on the nuclear deal might damage its global reputation. The Left, faced with its own electoral shock in the recent West Bengal panchayat (local) elections, has blamed its pseudo-capitalist policy and hardened its anti-U.S. dogma. The BJP, despite discomfort with its opposition against the initiative, has found a winning formula, and will not budge an inch if it means the Congress Party might emerge with a policy victory before the upcoming general election. ¶5. (C) Comment (continued): However, the nuclear initiative has seen a fair share of ups-and-downs over the past three years, and this latest reversal comes after a string of recent developments that had shifted the ground in the nuclear initiative's favor. President Kalam's support, the Uttar Pradesh-based Samajwadi Party's effort to get closer to the Congress, and the renewal of support for the initiative by the Bihar-based RJD Party had all generated positive momentum over the past week by building consensus behind the initiative. If strong and sustained, such political support could withstand a Communist withdrawal from government. But at the moment, the prospect for quick movement on the initiative this summer looks bleak. MULFORD