INDIA CONTINUES TO DEBATE NUCLEAR INITIATIVE, WARY

UNCLAS SECTION 01 OF 03 NEW DELHI 002086 SENSITIVE SIPDIS E.O. 12958: N/A TAGS: PREL PARM TSPL KNNP ETTC ENRG TRGY IN SUBJECT: INDIA CONTINUES TO DEBATE NUCLEAR INITIATIVE, WARY OF NSG CONDITIONS REF: BEIJING 2943 ¶1. (SBU) SUMMARY. A week after the United Progressive Alliance (UP) government's victory in the July 22 confidence vote, the U.S.-India Civil Nuclear Cooperation Initiative remains a focus of media coverage and political positioning. Print media scrutinized negotiations over the language of India's draft Nuclear Suppliers Group (NSG) exemption, emphasizing the importance for India of an "unconditional" exemption. One commentator noted that the exemption language will not include conditions imposing new limits on nuclear testing, but most focused instead on the veiled meaning behind the U.S. preference for speaking of a "clean" rather than an "unconditional" exemption. Another commentator claimed that Washington is "split down the middle" on conditions in the draft NSG exemption. The Nuclear Initiative also continues to shape party positions with a view toward national elections next year. The Samajwadi Party (SP) released a statement calling for amendments to the Hyde Act even as the party's leadership reasserted the importance of the Nuclear Initiative, all of which may have been an effort to insulate the party from criticism that it sold out to the government. Indian media continues to follow the Indian government's efforts to secure consensus support for India's IAEA safeguards agreement and an NSG exemption, including Foreign Minister Pranab Mukherjee's discussions on the margins of the Non-Aligned Movement (NAM) ministerial meeting in Tehran and Minister of State Prithviraj Chavan's meetings in Beijing (reftel). Post also fielded several queries from local representatives of NSG members asking for clarifications on the process and content of the draft NSG exemption in light of these media commentaries. Interest in Delhi -- within media, political, and diplomatic circles -- in the remaining steps toward completion the Nuclear Initiative will likely remain intense until the deal is done. END SUMMARY. Skeptical Commentators Parse NSG Exemption Leaks - - - ¶2. (SBU) Indian print media continued to scrutinize the next steps in the Nuclear Initiative, focusing attention on bilateral U.S.-India discussions about the draft NSG exemption language. Under the July 30 headline "U.S. Draft on NSG Exemption Falls Short of Expectations," Times of India diplomatic correspondent Indrani Bagchi wrote that India has made clear that the draft exemption must be "unconditional," adding that conditions would not only be resisted by India, but also by large potential suppliers such as France and Russia. "The countries that worry India most," according to Bagchi, "are the ones that have little stake in India or nuclear commerce with India and remain wedded to non-proliferation ideals." Indian officials believe they have achieved a "satisfactory" level of comfort with most countries, according to Bagchi, who attributed to unnamed western diplomats the view that Indian diplomats have adopted a "pretty brutal approach," leveraging India's bilateral relationships to push through favorable decisions. ¶3. (SBU) Indian Express diplomatic correspondent Pranab Dhal Samanta on July 30 observed that "India's aim would be to ensure there are no explicit curbs on nuclear testing linked to terminating fuel supply," and that "the draft (NSG exemption) makes no mention of either CTBT or testing." Samanta observed, "India has little room to accommodate any further commitments beyond the Indo-U.S. joint statement in July 2005." He blamed Pakistan's letter to members of the IAEA Board raising issues about the draft safeguards agreement for the "uncomfortable technical questions" coming from some NSG countries. Talk Of "Clean" Exemption Muddies the Waters In Delhi - - - ¶4. (SBU) Diplomatic correspondent for The Hindu newspaper Siddharth Varadarajan wrote two stories on July 29 under the headlines "No 'Unconditional' NSG Nod for India, Says U.S." and "Mulford Said NSG Waiver Would Be Clean, Not Unconditional." Applying Talmudic analysis to Ambassador Mulford's statements in a July 23 press conference, Varadarajan wrote, "Though India has made it clear that it expects the United States to deliver a 'clean and NEW DELHI 00002086 002 OF 003 unconditional exemption' for it from the export guidelines of the Nuclear Suppliers Group, Washington says it is committed only to a 'clean' and not 'unconditional' waiver for New Delhi." Varadarajan quotes an unnamed Indian official who indicated that U.S. officials had been saying that the NSG exemption could include "reasonable conditionalities" and that "Europeans were insisting on these." ¶5. (SBU) In an earlier article on July 26, Varadarajan listed several conditions that had been reportedly floated by the U.S., including "provisions for periodic review, Indian compliance with future NSG guidelines, a reversion of the ban in case India conducts a nuclear test explosion, and a ban on the sale of enrichment and reprocessing equipment." Varadarajan also said that India had objected to a prescriptive clause in the March 2006 NSG guideline draft that said members would "continue to strive" for the "earliest possible implementation" of full-scope safeguards in India. Varadarajan quotes another unnamed Indian official saying, "If anything, the fierce debate and the trust vote that the Manmohan Singh government has just won demonstrate that the Prime Minister has absolutely no wiggle room. If the NSG imposes conditions, India will reserve the right to walk away." ¶6. (SBU) Diplomatic correspondent for the Telegraph K.P. Nayar reported on July 29 that the "coordinating committee in Washington" is "split down the middle" on how to secure a "clean" NSG exemption. According to "sources that are privy to the committee's deliberations," Nayar reported that the NSG will agree to rule changes for India only after imposing "stiff conditions," but that most of the conditions discussed in the committee will be "totally unacceptable even to hard-core, blind and unquestioning supporters in India of the nuclear deal with the U.S." Nayar reported that the group's members will look at four documents that collectively "uphold the spirit and substance of the existing NSG guidelines," namely the Hyde Act, 123 Agreement, IAEA safeguards agreement, and an IAEA additional protocol. Nayar reported that the words "unconditional exemption" produce "paranoia" in Washington, and that the U.S. "will be resorting to semantics and using the term 'clean exemption'" in NSG meetings. Nuclear Initiative Remains Domestic Political Issue - - - ¶7. (SBU) The Nuclear Initiative continues to shape party positions as they look past the July 22 confidence vote and toward national elections next year. The Samajwadi Party (SP),which made possible the United Progressive Alliance (UPA) government's victory in the July 22 confidence vote, released a cryptic statement to media on July 28 saying India should press the U.S. to amend the Hyde Act. The statement, issued after a routine meeting of the party's Uttar Pradesh state executive committee, reads "There are certain provisions in the Hyde Act passed by the US Congress which will create hindrance in going ahead with the nuclear deal. We request the Centre to press the US for making certain amendments in the Hyde Act before finalising the deal or present a bill in Parliament to make an Act in India also. The Act is necessary to prevent other countries from creating hindrance in India's strategic programme in the name of atomic energy production for the people." Samajwadi leader Amar Singh reasserted the importance of the Nuclear Initiative in public statements following the party meeting. Embassy contacts speculated that the Samajwadi Party is trying to insulate itself from criticism that it sold out to the government ahead of an August 9 campaign rally by Uttar Pradesh Chief Minister Mayawati,s Bahujan Samaj Party (BSP), the Samajwadi Party's chief electoral rival in the state. ¶8. (SBU) India's chattering classes continue to follow closely the Indian government's ongoing efforts to secure consensus support for India's safeguards agreement and an NSG exemption. Foreign Minister Pranab Mukherjee, while attending the Non-Aligned Movement (NAM) ministerial meetings in Tehran on July 29, reportedly met IAEA Board member Algeria, IAEA members Egypt and Ghana, and NSG members Cyprus, Belarus, and South Africa. The NAM members were reportedly supportive of India's efforts to address its energy needs through the Nuclear Initiative. Local media NEW DELHI 00002086 003 OF 003 reported that China remained noncommittal on support for India's safeguards agreement following Minister of State in the Prime Minister's Office Prithviraj Chavan's meetings in Beijing on July 29 (reftel). Indian media disseminated locally Pakistani commentator Shireen Mazari's report crediting the U.S. with thwarting Pakistan's attempt to block consensus approval of India's safeguards agreement at the August 1 IAEA Board meeting. Comment: Delhi Still Tuned In - - - ¶9. (SBU) Post continues to field queries from local representatives of NSG countries asking for clarifications on the process and content of the draft NSG exemption discussions with the Indian government in light of these media commentaries. Local interest in the remaining steps toward completing the Nuclear Initiative is intense and will likely remain so until Indians go to the polls to select a new government. As is often the case in India, where a tight relationship exists between officialdom and the press, India's government is using the media to communicate with us, making very clear the importance it places on a "clean" NSG exemption. WHITE