RESPONSE TO ACTION REQUEST: CUBA: COUNTRY BY

C O N F I D E N T I A L NEW DELHI 003215


WHA/CCA

E.O. 12958: DECL: 12/21/2018
TAGS: CU ETRD ETTC PREL
SUBJECT: RESPONSE TO ACTION REQUEST: CUBA: COUNTRY BY
COUNTRY REVIEW FOR SUSPENSION OF TITLE III OF THE LIBERTAD
ACT

REF: A. A. STATE 126578

B. B. NEW DELHI 02459

C. C. NEW DELHI 05139

Classified By: John Fennerty, Acting Minister Counselor for Economic Af
fairs, for Reasons 1.4 (b) and (d).


1. (U) In response to the reftel request for information on
India's relations with Cuba, Embassy New Delhi provides the
following assessment based on the most recent and readily
available information.


Overall Friendly and Symbolic Relations
--------------

2. (C) As members of the Non-Aligned Movement (NAM),India
and Cuba maintain friendly relations from years of shared
interests during the Cold War era. As a result, high level
officials have paid visits to the each others, countries to
participate in NAM summits and meetings throughout the years.
Such visits have become primarily symbolic and not
high-stakes in nature. Aside from an affable and somewhat
nostalgic NAM bond, economic collaboration remains the area
with the most potential for growth within the Cuba-India
relationship.


India Makes Statement Rejecting Embargo at the UN
-------------- --------------

3. (C) At the UN General Assembly in October 2008, Indian
delegate Rajeev Shukla stated that India supports categorical
rejection of economic, commercial and financial embargos on
Cuba by the international community and requested that the
U.S. lift its embargo. Post is unaware of any actions taken
by India towards promoting the advancement of democracy,
civil society, or human rights in Cuba, nor any public
statements or governmental actions condemning human rights
abuses.


Small Number of Diplomatic Visits
--------------

4. (C) There has been no high-level diplomatic visits from
India to Cuba in the past six months, however, Post notes
that there has been an increasing number of Indian visitors
over the past three years (see Refs B and C). The most
recent visit took place in January 2008 when the Speaker of
Lok Sabha, the lower house of the Indian Parliament, Somnath
Chatterjee, led a parliamentary delegation to Havana. During
his visit, Chatterjee spoke about expanding bilateral
relations in the fields of medicine, biotechnology, and
sports. Cuban visitors to India in the past year have
included Vice-Minister for Foreign Trade Eduardo Escandell
Amador as part of a business delegation in May 2008, and Head
of the International Affairs Department for the Communist
Party of Cuba, Ramirez Fernandez, in March 2008.


USD $2 Million in Disaster Assistance
--------------
5.(C) On November 12, 2008 GOI donated USD $2 million to Cuba
for relief from damage caused by hurricanes Gustav and Ike.
The donation was officially made in Havana by Indian
Ambassador Mitra Vasisht during a meeting with Cuban First
Deputy Minister for Foreign Investment and Economic
Cooperation (MINVEC),Ramon Ripoli. According to local
sources, this was an unusual act and the first time India has
provided such financial assistance to Cuba.


Trade Still Too Difficult To Be Substantial
--------------

6. (C) In the 1980s, total bilateral trade between India and
Cuba reached as high as USD $300 million. In contrast, the
current level of bilateral trade is minimal at USD 33
million. Cuba reportedly would like to return bilateral
trade to its previous high levels, using USD 300 million as a
target. Indian exports to Cuba remain low due to the lack of
access to foreign exchange in the hands of importing Cuban
entities, the difficulties of doing business with Cuba,s
socialist system, the small volume of orders for goods and
relatively high transport costs from India. Exports via
third countries, including Spain, Canada, and Panama, are
reportedly more substantial, as are Cuban exports to India
via third countries. The main commodities traded between
India and Cuba include electronic items, cotton yarn fabrics,
drugs and pharmaceuticals and fine chemicals, plastic and
linoleum products and spices. Primary exports from Cuba to
India include vaccines, medicines, nickel and cigars.


Opening of EXIM Bank Line of Credit
--------------

7. (C) The Indian Government,s waiver of the $62 million
debt payable by Cuban companies to firms in India has
facilitated the availability of credit from India,s
export-import bank and the Export Credit Guarantee
Corporation of India to Cuba, which should enhance bilateral
trade and investment. Talks on opening lines of credit are
at an advanced stage for projects relating to fertilizers,
chemicals, pumps, public health and automobiles.


Oil is India,s Primary Investment
--------------

8. (C) India,s primary investment in Cuba is through ONGC
Videsh Limited(OVL),the overseas subsidiary of India,s
state-owned Oil and Natural Gas Corporation. OVL set up an
office in Havana in 2007 and owns two sea blocks in Cuban
waters for oil exploration. The company also partners with
Spain,s Repsol YPF and Norway,s Norsk Hydro in six blocks.
OLV controls 30 percent of the shares, Repsol controls 40
percent and the remaining 30 is owned by Norsk Hydro. Indian
observers estimate the hydrocarbon potential of the blocks to
be 4 billion barrels; however, experts believe that the oil
fields are not yet economically viable for drilling due to a
lack of refinery capacity and difficulty in reaching the oil.



9. (C) In July 2008, Cuba invited Indian investment in a new
refinery project planned on the west coast of Cuba. The
project is slated to have a capacity of 150 thousand
barrels-a-day (7.5 million tons per annum). Cuba also
invited Indian investment to upgrade and expand its existing
refineries.


Cooperative Agreement for the Oil and Gas Sector
-------------- --------------

10. (C) In June 2008, India and Cuba finalized the India-Cuba
Hydrocarbon Agreement for cooperation in the oil and gas
sector. Local media reports that Indian Minister for Oil and
Gas Deora will visit Cuba to sign the agreement when the first
production well begins to drill. India and Cuba have several
other minor cooperative agreements and MOUs focusing on cultural
relations; science and technology; consumer protection;
renewable energy and sports.


Minimal Biotech Investment
--------------

11. (C) Although there is only one joint venture of
significance in the biotech sector, India encourages its
biotech companies to seek deals with Cuba,s biotech industry
and the two countries have agreed to supply each other with
generic medicines. Bicon Bio Pharmaceuticals Private
Limited, a joint venture between a Cuban enterprise and Bicon
initiated in 2002, is working to produce vaccines against
cancer and other medicines. Cuba has invited Indian
investment for similar projects in tourism, housing
construction, sanitation, hydroelectric and wind energy.


An Increase in Business and Trade Delegations
-------------- --

12. (C) For the first time in 15 years, an Indian business
delegation participated in the 26th International Havana
Trade Fair in November 2008. The delegation represented
tourism, textiles, chemicals, agri-businesses, energy, oil
and gas, pharmaceuticals, wood and paper, automobiles and
construction industries. Post was unable to identify
companies that sent representatives to the Trade Fair.


13. (C) In May of 2008, Cuba sent a large delegation
consisting of over 20 government officials and business
leaders to India to revive bilateral trade ties. The
delegation held trade discussions with India,s major
business chambers, leading business houses such as the Tata
Group, and government officials to promote investment into
Cuba. Cuban Deputy Minister of Foreign Trade, Eduardo
Escandell Amador met with Tata Group to discuss sourcing cars
(particularly the new Nano),trucks, and buses from the
company. The delegation identified areas of cooperation
including energy-saving devices, computers, home appliances,
medicines and medical devices. The possibility of importing
rice from India was also discussed at the delegation,s
meetings.


Token Exchange Programs
--------------

14. (C) India and Cuba maintain friendly cultural relations
programs that provide for exchange of artists; writers;
archivists and students for short periods of time. India
also provides Cuba with fifty Indian Technical and Economic
Cooperation scholarships annually. Cuba provides coaches for
India's sports programs under an MOU for sports cooperation
signed by India's Minister of Sports in his February 2007
visit to Cuba. The Indian Embassy in Cuba notes that there
are four medical students currently in Havana. Post has
found no evidence of Cuban-paid medical travel for Indian
nationals and was not been able to assess the number, if any,
of Cuban doctors working in India.


Comment: Effect on Indo-U.S. Ties
--------------

15. (C) The ongoing transformation of US-India relations has
improved our ability to engage in frank and open discussions
with the GOI on third-country relations. Actions against
Indian entities or nationals in US courts for trafficking in
confiscated property in Cuba would likely trigger a negative
response among the Indian public, government, and political
circles, particularly among the robust left political
parties. While unlikely to derail the overall positive
direction of our bilateral partnership, it would perhaps
create an unhelpful undertone within the relationship. The
economic implications of such actions would likely be minimal.


MULFORD