INDIA CONTINUES TO DEBATE NUCLEAR INITIATIVE, WARY

UNCLAS SECTION 01 OF 03 NEW DELHI 002086

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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

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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

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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.


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