SAFEGUARDS TALKS DONE, INDIA WILL SOON MAKE

C O N F I D E N T I A L NEW DELHI 000690 SIPDIS SIPDIS E.O. 12958: DECL: 03/04/2018 TAGS: PREL PARM TSPL KNNP ETTC ENRG TRGY IN SUBJECT: SAFEGUARDS TALKS DONE, INDIA WILL SOON MAKE POLITICAL DECISION Classified By: Ambassador David Mulford for Reasons 1.4 (B and D) ¶1. (C) Summary: Foreign Secretary Menon and Special Envoy to the Prime Minister Shyam Saran confirmed to Assistant Secretary Richard Boucher March 4 that India and the SIPDIS International Atomic Energy Agency had finally completed their negotiations on a safeguards agreement. Menon discounted the conventional wisdom that posited that the Indian government would move forward only after the May 9 budget vote in Parliament, and he predicted that the leadership could make a political decision this week on whether to submit the safeguards agreement to the Board now. Saran, on the other hand, viewed the May 9 date as the outer limit for when the Indian government might move forward. Boucher and Ambassador Mulford both urged that the timeline compels the Indian government to take action as soon as possible, and Boucher added that the U.S. and India should work towards concluding the lingering issue of Nuclear Suppliers Group and Missile Technology Control Regime harmonization and adherence. End Summary. Menon: We Must Make the Political Call Now - - - ¶2. (C) In a March 4 meeting with Assistant Secretary for South and Central Asian Affairs Richard Boucher, Indian Foreign Secretary Shivshankar Menon related that India and the International Atomic Energy Agency produced a final text during the fifth round of safeguards talks that concluded February 28, but have refrained from making a public announcement. Menon noted that the Indian government will decide today whether the safeguards text as it stands is sufficient to move forward. Menon judged that the Left will challenge the agreement "no matter what." Menon also dismissed the "conventional wisdom" that the United Progressive Alliance government would only take action on the nuclear deal after the budget vote scheduled May 9. Instead, Menon remarked, the government "will make a determination of what to do this week." Menon detailed that the safeguards agreement includes a declaration and annex, under which the Indian government will place its facilities as they fall under safeguards and fuel suppliers will declare shipments. In response to a question from Boucher, Menon also specified that the agreement includes language that ensures that the safeguards agreement take effect only after the completion of other steps, including the Nuclear Suppliers Group exception. ¶3. (C) Special Envoy to the Prime Minister Shyam Saran also confirmed in a separate March 4 meeting that India had concluded the safeguards talks. Saran opined that the text was "as good as we can get with nothing missing or included that could cause difficulty." But he also recognized that the political attitude would determine the way forward. He thought that the Indian government would wait until the budget session concluded May 9, after which the government has "lots of room for maneuvering." Boucher stressed that the Indians have already put the initiative in "overtime." Saran clarified that May 9 actually served as the "upper limit" for when the Indians might move the initiative forward, and if the government felt that it could bring the Left along, the initiative could progress earlier. Get the Deal to Nuclear Suppliers Group By End of April or Beginning of May - - - ¶4. (C) Boucher outlined for Menon that if the Indian government made public that it had reached agreement with the IAEA, the U.S. would work quickly towards an International Atomic Energy Agency Board of Governors meeting, which he expected could occur in three-to-four weeks. Simultaneously, he continued, the U.S. would also start its lobbying campaign in the Nuclear Suppliers Group, which he cautioned could not make an exception until after the Board approved the safeguards agreement. He noted that the U.S. could either "leapfrog" to a Nuclear Suppliers Group Plenary, or develop the exception language in Consultative Group meetings before a Plenary. Ambassador Mulford averred that the experts have already had enough time to look critically at the nuclear initiative, and he expected that, similar to the U.S. Congress vote on the Hyde Act, countries would fall on the side of better relations with India. Menon affirmed that the India safeguards agreement is "basically an Information Circular 66," and as such should raise few questions among the Nuclear Suppliers Group members. Clean Exception Needed - - - ¶5. (C) Saran underlined that India will look to the U.S. to produce a clean exception to the Nuclear Suppliers Group Guidelines. "We do not want to set off another controversy in an election year," he cautioned. Boucher asked whether countries have urged India to accept any conditions. Saran replied that several countries have asked India to sign the Comprehensive Test Ban Treaty and a couple have raised the fissile material moratorium, but no other potential conditions have come up. Boucher asked about "post hoc conditions," such as the right for countries to demand the return of nuclear fuel or items in case India detonates a nuclear device. Saran said that such conditions have not been proposed. Saran Points To China as the Last Remaining Question Mark - - - ¶6. (C) Saran reviewed his engagement with Nuclear Suppliers Group countries as having moved the Group in a positive direction, with the exception of China, which remained ambiguous. He sensed that China "will not be the one country not to agree, but we must ensure that no other countries come out against the exception." Boucher suggested that the U.S. might talk with the Chinese again, and specifically address the issue of a generic versus India-specific exception. That way, Boucher explained, the Chinese can tell "its friend" that it attempted to argue a criteria-based approach. Saran pointed out that China had made an effort to express its support for civil nuclear cooperation during Prime Minister Manmohan Singh's December visit to Beijing, as well as in the context of Indian membership in the International Thermonuclear Experimental Reactor program, actions which "hint that China may be inclined to support us." Other Countries Have Moved in Positive Direction - - - ¶7. (C) Having traveled to many Nuclear Suppliers Group countries, Saran assessed that they will look primarily to the U.S., as well as Russia, France and the United Kingdom for guidance. He recalled that several formerly hostile countries such as Brazil and South Africa have softened their position considerably, and he reported that Argentinean officials told him they might raise a few questions, but would "do no harm" to India's aspirations. Saran noted that Norwegian officials admitted to him that Norway plans to rely on alternative sources of energy and would like to collaborate on thorium research. Regarding Ireland, Saran said that he got the sense that the Irish have strong nonproliferation credentials to uphold, and they do not want to be seen as rolling over. Boucher listed Germany, Ireland, New Zealand, Austria and Australia as the countries that the U.S. and India should emphasize. Saran remarked that while the German Foreign Minister is "a little uptight," the government itself has expressed support. Boucher and Saran agreed to coordinate on the Nuclear Suppliers Group engagement. Congress Party Moves Inch-By-Inch - - - ¶8. (C) Ambassador Mulford asked Menon whether the Left will continue to challenge the implementation of the nuclear initiative. Menon responded that the Communists have been very careful not to say what they define as "operationalization." The Ambassador termed the Left's negative flexibility as a "rolling no." Menon thought there was a good chance that the political leaders would decide to challenge the Left and, invoking David Ben-Gurion's remark that Israel had to buy land inch-by-inch to assert its place in the Middle East, he thought the Indian government would adopt a similar strategy of gradual forward movement to make the Communists accept the reality of the nuclear deal. Lingering Issues Also Need Resolution - - - ¶9. (C) Boucher also reminded Menon and Saran that India must also harmonize with and adhere to the Nuclear Suppliers Group and Missile Technology Control Group Guidelines. Menon noted that Indian officials have previously expressed the willingness to adhere to those arms control groups provided that India could take part in the decision-making process. "We need to be able to say we are not signing on to a blank check," he remarked. Saran claimed that India has completed the harmonization process, and echoed Menon's comments on adherence. Poloff suggested that the Indian government reply to the draft adherence statement that Ambassador Donald Mahley provided in October. Saran told Joint Secretary Gaitri Kumar to look into the matter. ¶10. (C) Ambassador Mulford asked about the Indian response to the draft letter of intent. Saran said that, while "numbers may be difficult," the Indian government was preparing a response. He added that, as the U.S. has led the civil nuclear initiative, India recognizes that it will have a major share of future nuclear commerce. ¶11. (C) Regarding the Additional Protocol, Boucher also pressed that the Indian government show it has made substantial progress. Saran replied that the close relationship between the Indian Department of Atomic Energy and the International Atomic Energy Agency will make this an easy action item, particularly once the safeguards agreement goes through. Comment: Political Obstacles Still Remain - - - ¶10. (C) While it appears as if the Indian government has finally produced a safeguards text, the political waters still remain too murky for the Congress Party to move forward immediately. Although extremely late on the timeline, the budget vote on May 9, which both Menon and Saran cited as liberating the Congress Party from its Communist chains, may prove tempting for a government that has so far lacked the political courage to confront the Communists. However, the confirmation that India has a safeguards text adds substance to the many signals, among them Ambassador Ronen Sen's extension and an excessively pro-poor budget, that indicate the government may finally move the deal forward, even as it prepares for general election in the months to come. ¶11. (U) Assistant Secretary Boucher has cleared this cable. MULFORD