CONGRESS SEEKS SP SUPPORT ON NUCLEAR DEAL TO BUCK

C O N F I D E N T I A L SECTION 01 OF 02 NEW DELHI 001798 SIPDIS E.O. 12958: DECL: 06/30/2018 TAGS: PREL PARM TSPL KNNP ETTC ENRG TRGY IN SUBJECT: CONGRESS SEEKS SP SUPPORT ON NUCLEAR DEAL TO BUCK LEFT, PRESERVE GOVERNMENT, PROCEED TO IAEA IN JULY Classified By: Charge John Davison for Reasons 1.4 (B and D) Summary - - - ¶1. (C) The Congress Party appears on the verge of securing sufficient support from the Samajwadi Party (SP) to permit the United Progressive Alliance (UPA) coalition government to advance the U.S.-India Civil Nuclear Cooperation Initiative and to prove a parliamentary majority even if the Left withdraws. The SP plans to announce its decision after a meeting of like-minded partners on July 3. The Left's de-facto veto in the government thus threatened, it announced that it may withdraw support if Prime Minister Singh attends the July 7-8 G8 summit in Japan rather than wait for submission of the draft safeguards agreement to the IAEA Board of Governors. A West Bengal senior Congress Party source told us that Prime Minister Singh plans to share with President Bush at the G8 Summit the government's intention to move the deal forward. The opposition Bharatiya Janata Party (BJP) remains focused on courting election support, attacking the government over inflation and the economy, and maintaining its insistence on renegotiating the nuclear deal to explicitly authorize testing. The Congress-led UPA government appears to gain little by waiting much past the SP's anticipated declaration of support on July 3 to announce publicly its decision to move forward with the nuclear deal. Once the decision is made, the government hopes to pursue simultaneously the IAEA safeguards agreement and the Nuclear Suppliers Group (NSG) exception, with the ambitious aim of seeking approval from the U.S. Congress in September. End Summary. Signs Point to Vienna: Congress Courts Samajwadi Party - - - ¶2. (C) The Prime Minister's media advisor Sanjaya Baru confirmed for the Charge on June 30 media speculation that the Congress Party has decided to take the next step in advancing the U.S.-India Civil Nuclear Cooperation Initiative by submitting its draft safeguards agreement to the IAEA Board of Governors, provided it receives the support of the Samajwadi Party (SP) on July 3. The SP, together with the other UPA partners, would provide Congress with sufficient votes to constitue a parliamentary majority to fend off a possible 'no confidence' vote that Communist Party (CPI-M) chief Prakash Karat has threatened to trigger if the government moves forward with the nuclear deal. ¶3. (SBU) SP leader Mulayam Singh Yadav has yet to pledge publicly its support for the government, but his recent statements suggest a decisive shift toward the government. Yadav told media he would be briefed by aides on July 2 in advance of a meeting the next day of the United National Progressive Alliance (UNPA) -- including the SP and five other small parties -- after which a decision is likely to be announced. Yadav's public statements appear to be designed to prepare for a rapprochement with the government, saying "the chapter is closed" on his party's past ideological rivalry with the Congress. Yadav also told media that the five other members of the UNPA have no differences on the nuclear deal. ¶4. (C) Congress Party public statements have likewise evidenced a new resolve in recent days, bolstering claims that the party has made the political decision to proceed with the nuclear deal while preserving the government. Embassy contacts confirmed media reports that Congress Party leader Sonia Gandhi directed party general secretaries in a meeting on June 28 to ready the party's election operations by August 31. Following the meeting, the emboldened Congress leadership called the Left's continued opposition to the nuclear deal "irrational" and highlighted the need to end India's "nuclear seclusion," especially in the face of rising oil prices. ¶5. (C) After spending the morning with Foreign Minister Pranab Mukherjee who was in Kolkata for a SAARC reporters conference, West Bengal Congress General Secretary Dr. Manas Bhunia reported to Consul General that Mukherjee confirmed that the Congress definitely plans to advance the nuclear deal and that Prime Minister Singh would tell President Bush this at the G-8 Summit. Bhunia said the Congress was NEW DELHI 00001798 002 OF 002 determined to go ahead with early elections if it failed to gain SP support. Bhunia also reported that Mukherjee spoke with Chief Minister Buddhadeb Bhattacharjee about the Congress,s plans. According to Bhunia, West Bengal Communist Party leaders generally do not oppose the nuclear deal, but that Prakash Karat was intransigent. The West Bengal CPM leaders were concerned about how they will fare in parliamentary elections after losing about half of the gram panchayat (village council) elections in May. Bhunia added that in response to Congress,s efforts to reach out to the SP, the Left is trying to garner support from Karunanidhi and the Dravida Munnetra Kazhagam (DMK) party, which currently supports the UPA and the nuclear deal. Left Opposes Attendance at G8 Summit - - - ¶6. (SBU) Faced with the prospect of SP support for the UPA government, senior officials of the Left announced on June 30 that they could withdraw from the government if Prime Minister Singh attends the July 7-8 G8 summit in Japan rather than wait for submission of the draft safeguards agreement to the IAEA Board of Governors. This follows media speculation that the UPA coalition government, after gaining SP support, would prefer to wait until Prime Minister Singh's return from the G8 Summit to announce publicly the submission of the IAEA safeguards agreement in order to defer the Left's withdrawal -- and the ensuing political turmoil. The Left would also thereby prevent Prime Minister Singh from announcing the deal in the presence of the G8 leaders. Karat also broadened the Left's threat beyond the current government by suggesting that Left parties would be reluctant to form a coalition with the Congress Party following the next general election, saying "The Congress should realize it cannot come to power on its own." BJP Supports Testing, No Confidence Vote; Seeks New Allies - - - ¶7. (SBU) In a July 27 speech in Uttar Pradesh that some media outlets characterized as the formal launch of the opposition Bharatiya Janata Party's (BJP) election campaign, party leader L.K. Advani reiterated his support for renegotiating the nuclear deal to explicitly permit nuclear testing. Advani also called for a 'no confidence' vote if the Left withdraws support from the government over the nuclear deal, a largely symbolic action if Congress shores up SP support. In a signal that the BJP is reaching out to potential coalition partners, Advani wished Uttar Pradesh Chief Minister Mayawati's Bahujan Samaj Party (BSP) success in governing the state. (A BJP-BSP alliance in Uttar Pradesh in the 1990s resulted in the BSP usurping the BJP's traditional upper caste constituency in the state.) Comment: An Ambitious Indian Timeline - - - ¶8. (C) If the Left's threat to pull out of the government in the event that Prime Minister Singh attends the G8 Summit is credible, the government appears to gain little by waiting much past the SP's anticipated declaration of support on July 3 to announce publicly its decision to advance the nuclear deal. In fact, should the SP join the coalition, threats by the Left or the BJP to bring a 'no confidence' motion become moot. As public statements on this deal are often misconstrued by opponents in India even in the best of times, Post strongly urges USG officials to refrain from commenting on Indian developments during this crucial time when a decision appears imminent. DAVISON