Identifier
Created
Classification
Origin
08NEWDELHI763
2008-03-13 12:36:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy New Delhi
Cable title:  

SCENESETTER FOR SPEAKER OF THE HOUSE NANCY PELOSI

Tags:  PREL PGOV ECON KNNP IN 
pdf how-to read a cable
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FM AMEMBASSY NEW DELHI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0857
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEAIIA/CIA WASHDC
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UNCLAS SECTION 01 OF 08 NEW DELHI 000763 

SIPDIS

SENSITIVE
SIPDIS

FOR SPEAKER OF THE HOUSE NANCY PELOSI AND MEMBERS OF
CONGRESS EDWARD MARKEY, JIM MCDERMOTT, GEORGE MILLER, JAMES
SENSENBRENNER, JAY INSLEE, ELEANOR HOLMES NORTON, HILDA
SOLIS, ANNA ESHOO, RUSH HOLT AND HOUSE SERGEANT OF ARMS
WILSON LIVINGOOD FROM AMBASSADOR MULFORD; STATE FOR
SCA/INS, H

E.O. 12958: N/A
TAGS: PREL PGOV ECON KNNP IN
SUBJECT: SCENESETTER FOR SPEAKER OF THE HOUSE NANCY PELOSI
AND DELEGATION'S MARCH 2008 VISIT TO INDIA

UNCLAS SECTION 01 OF 08 NEW DELHI 000763

SIPDIS

SENSITIVE
SIPDIS

FOR SPEAKER OF THE HOUSE NANCY PELOSI AND MEMBERS OF
CONGRESS EDWARD MARKEY, JIM MCDERMOTT, GEORGE MILLER, JAMES
SENSENBRENNER, JAY INSLEE, ELEANOR HOLMES NORTON, HILDA
SOLIS, ANNA ESHOO, RUSH HOLT AND HOUSE SERGEANT OF ARMS
WILSON LIVINGOOD FROM AMBASSADOR MULFORD; STATE FOR
SCA/INS, H

E.O. 12958: N/A
TAGS: PREL PGOV ECON KNNP IN
SUBJECT: SCENESETTER FOR SPEAKER OF THE HOUSE NANCY PELOSI
AND DELEGATION'S MARCH 2008 VISIT TO INDIA


1. (SBU) Dear Speaker of the House Pelosi, Members of
Congress Markey, McDermott, Miller, Sensenbrenner, Inslee,
Holmes Norton, Solis, Eshoo, Holt and the Honorable Mr.
Livingood: The Country Team and I warmly welcome you to
India. Your visit comes at a critical juncture in what has
been a period of profound transformation in Indo-US
relations. While we have successfully accelerated and
expanded the ties between our two democracies into a broad,
comprehensive relationship, the ruling coalition, known as
the United Progressive Alliance (UPA),has effectively
stalled the implementation of the civil nuclear initiative in
the face of vociferous Communist opposition, which has
threatened to bring down the government if India gets closer
to the U.S. Despite the delay in implementing the
initiative, which has impacted other potential collaborative
activities, the long term prospects for a closer, abiding
bilateral relationship with a vibrant, prosperous India are
very strong - and remain of strategic importance to the U.S.
With India set to surpass China as the fastest growing
economy in 2015, this may well become our most important
bilateral relationship within 20 years. Your visit helps
demonstrate the vitality and breadth of our relationship,
which now touches on almost all areas of human endeavor. Our
Embassy is trying to put out the public message that there
are numerous natural complementarities and deep linkages
between our two countries. We hope that the more these
linkages bring visible benefits to ordinary Indians, the more
the Communist party's intransigence and ideology will be seen
as incurring heavy costs to India and its people. The bright
spot remains the private sector's exponential growth and
people-to-people ties, to which government-to-government ties
ultimately must catch up.


2. (SBU) This message provides you an update on the status
of the civil nuclear deal, political climate, economic
situation, trafficking in persons and climate change.

--------------
The Civil Nuclear Cooperation Initiative
--------------


3. (SBU) President Bush and Prime Minister Singh pledged in
July 2005 to take a series of reciprocal steps that would
culminate in the opening of India's formerly sanctioned civil
nuclear market. India completed the first milestone on March
2, 2006 by releasing a plan to separate its civilian and
strategic nuclear programs in a phased manner, and pledging
to place its civilian facilities under International Atomic
Energy Agency (IAEA) safeguards. An overwhelming, bipartisan
majority in the U.S. Congress then approved in December 2006
the Hyde Act, which allowed the U.S. and India to engage in
civil nuclear trade. The U.S. and India concluded an
Agreement for Peaceful Nuclear Cooperation, also known as the
123 Agreement, in July 2007, which sparked political turmoil
when the Communist parties threatened to withdraw their
support from the government because the Agreement, they felt,
brought India too close to the U.S. The opposition parties
also claimed that the terms of the Hyde Act and 123 Agreement
rendered India's nuclear weapons program useless. Meanwhile,
India and the IAEA have effectively reached agreement on a
safeguards agreement, which the government will try to sell
to its skeptical Communist allies on March 17. Should the
government receive the go-ahead, it will submit the agreement
to the IAEA Board of Governors for approval, and the U.S.
will seek to enact a policy change in the Nuclear Suppliers
Group (NSG) to allow India to engage in civil nuclear
commerce globally. Finally, the Administration will submit
the 123 Agreement to the U.S. Congress for an up-or-down vote
of approval. Civil nuclear cooperation between the U.S. and
India will offer benefits to both countries' citizens through
enhanced energy security, more robust nonproliferation
efforts, an energy source without carbon emissions, and
greater economic opportunities.

--------------
The Political Landscape
--------------


4. (SBU) Indian domestic politics is practiced within a
vibrant, raucous, few-holds-barred democratic environment.
Indians take their democracy seriously and vote in large

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numbers, with turnout sometimes exceeding 80 percent. The
election campaign never ends because an election of
significance is always around the corner somewhere in the
country. In addition to national elections which are due
every five years (but can and often do occur more
frequently),several states go to the polls each year for
elections to the state legislatures. Two national parties
are perched at the top of the political pyramid -- the
left-of-center Congress Party and the right-of-center
Bharatiya Janata Party (BJP). Below them are dozens of
smaller regional, state and special-interest parties. While
both the Congress Party and the BJP battle across all the
disparate regions of the country, neither has the ability to
form a government in Delhi on its own and must rely on
fractious and unwieldy coalitions with smaller regional
parties to govern.


5. (SBU) The once mighty Congress Party, dominated for long
by the Nehru-Gandhi dynasty and in the forefront of the
independence movement, has lost its aura and fallen in
stature. It ruled India for most of the period since
Independence in 1947 but its credibility has eroded over the
years because of the autocratic ways of its leaders, its
failure to respond to regional aspirations, and its inability
to adapt to the changing India. The BJP, with its roots in a
muscular Hindu response to centuries of foreign subjugation,
first by a succession of Muslim rulers from Central Asia and
then by the British Empire, has emerged as a viable
alternative to the Congress Party. It occasionally reverts
to its Hindu nationalism rhetoric but has tempered its
discourse and broadened its appeal to position itself as a
mainstream political force. It led the National Democratic
Alliance (NDA) coalition government from 1999-2004 before
being unceremoniously ousted by the voters for its failure to
more evenly disperse the benefits of a "Shining India" to the
65 percent of the population that lives in rural India.


6. (SBU) The Congress Party, which leads the current United
Progressive Alliance (UPA) coalition government, staggers
into its final year in office bruised and battered by a
series of setbacks in state elections during the last year
and a bitter squabble between UPA coalition allies over the
U.S.-India civil nuclear agreement. Public bullying by its
communist party allies has fueled perceptions of a feeble and
indecisive party with no back-bone, intent of hanging on to
power even at the cost of compromising on its principles.
The BJP, in contrast, has the wind in its sails after its
thumping wins in state elections last year. Sensing blood,
the party set aside years of internal struggles following its
2004 loss to unite under the leadership of former Party
President and former Deputy Prime Minister L.K. Advani. It
has consolidated its support with its NDA allies. It has
taken lessons from its recent state election wins to sharpen
its strategy and hone its message for the coming national
elections.


7. (SBU) In search of a make-over, the Congress Party
recently unveiled a "please-all" super-populist budget,
opening up the public purse strings to an unprecedented
extent. While the budget's centerpiece is a USD 15 billion
write-off of farming debt, it also includes sops for almost
every interest group and voter block. The Congress Party
hopes this election year largesse will revive its waning
fortunes and help it remain competitive in the coming state
and national elections. Some observers believe that the
Indian voter is too sophisticated to be taken in by such
cynical election year pandering. In any event, it is
impossible to predict at this time which party will emerge on
top in the national elections. But, it is safe to say that
that neither the Congress Party nor the BJP is likely to win
a majority on its own and either will have to forge a
coalition with the smaller regional parties to form a
government. The smaller parties will continue, therefore, to
exert greater influence on government policy that their
numbers in Parliament would justify.

--------------
A COMPREHENSIVE ECONOMIC RELATIONSHIP
--------------


8. (SBU) The bilateral economic relationship is a critical

NEW DELHI 00000763 003 OF 008


driver in deepening ties between our countries. This is
happening through government exchanges such as the Economic
Dialogue and the Trade Policy Forum, and by our countries'
private sectors, including the CEO Forum, that are boosting
U.S.-India trade and investment to new heights.

--------------
INDIA'S ECONOMIC TRAJECTORY - ONE OF TRANSFORMATION
--------------


9. (SBU) I know that you are well aware of India's economic
performance that has seen Gross Domestic Product (GDP) growth
jump in the last two decades from the 6 percent range to
nearly four years straight of 8.5 percent compounded annual
growth. While there is some question whether this is simply
cyclical, we perceive fundamental structural changes underway
that are reshaping India's socio-economic landscape. These
include the significant rise in savings and investment, the
declining share of agriculture in GDP, replaced by industry,
and the "market-seeking" flows of foreign direct and
portfolio investment into the country. Since two-thirds of
India's economy is driven by domestic consumption, we
anticipate a U.S. economic slowdown will initially take off
only about half a percent of GDP, with growth remaining about
8%. If financial markets deteriorate sharply in line with
continuing U.S. market declining growth, India may be
impacted more severely.


10. (SBU) Savings have risen over the past decade to hit
roughly 33 percent of GDP, a combination of more corporate
saving and less government dissaving (debt financing). While
corporate savings may ebb a bit in the next decade, household
savings are also beginning to rise and to become more fluid,
moving from government subsidized post office savings
deposits to commercial banks and mutual funds. Investment has
also grown significantly in recent years, nearing 37 percent
of GDP - again, mainly a function of corporate expansion
plans, but the government's infrastructure goals are boosting
public investment levels as well. Indian economists have
noted that many Asian economies hit a "take off" stage in
their growth once investment crossed the threshold of 40
percent of GDP. The savings-investment gap is clearly
financed through imports and a trade deficit, but other
inflows, including the FDI and portfolio investment noted
above, have kept the balance of payments in surplus for three
years with no end in sight, and foreign exchange reserves
continue to rise, already surpassing USD300 billion, the
fourth largest in the world.


11. (SBU) The agricultural sector is critical to many
households' incomes, since more than 50 percent of India's
workers are involved in agriculture. But in terms of GDP,
agriculture accounts for less each year, last year
contributing just 18 percent to national economic growth. On
a macro scale, this decline lessens the volatility of growth
that India's mainly monsoon-dependent agricultural sector
brought, further making sustained GDP growth in the 8-9
percent range a likely scenario. Politically, however, the
government struggles with proposed reforms that would have a
broad effect on the 600 million people who are dependent on
this underperforming sector. In India, the rural poor vote
much more than the urban masses, so any dislocation in the
agricultural sector has the potential to have wide-ranging
political consequences.


12. (SBU) At the same time, India's manufacturing sector is
finally showing signs of expansion and global attention.
Stuck at roughly 14 percent of GDP for nearly two decades - a
stark contrast to many Asian economies' growth trends -
manufacturing grew to 17 percent of GDP last year, and with
double digit growth continuing, appears likely to continue
its increasing contribution to GDP.

--------------
JUST TWO INDIAS?
--------------


13. (SBU) India clearly has stark differences in rural/urban
ratios in social and economic indicators, and at just 30
percent urbanization, one of the lowest urbanization rates in
the world. The urban poor are the fastest growing segment of

NEW DELHI 00000763 004 OF 008


the population, at roughly five per cent per year. In
India's "mega cities", those with a population greater than
one million, 40-60% of the inhabitants live in slums or other
informal settlements. Since much of the visible economic
boom this past decade has been in knowledge-intensive
industries, mainly in urban areas, there is a widely held
perception of two widely different and diverging Indias in
urban and rural India. However, recent studies suggest that
surprising developments are quietly underway outside India's
cties. One of the most important is that agriculture now
accounts for only half of India's rural economy; no longer is
rural synonymous with agricultural. Also critical for
understanding India's transformation is that rural incomes
have been growing faster than urban incomes in recent years.


14. (SBU) Changes are underway in India's villages and small
towns, but definitions and methodologies of measuring these
changes are lagging. The non-agricultural rural economy that
is seeing incomes rise includes the increasing use of casual
or contract labor, outside factories, for apparel assembly;
the rise in national markets for traditional handicrafts; the
rise in tourism, especially domestic; emerging
agro-processing industries; sale of land for industrial use;
and creation of linkages for goods and services between major
metros' demand and rural areas' supply. These dynamics are
likely to become clearer in the next few years, as domestic
companies, especially in retail, have begun to turn their
marketing focus to India's rural sector, as urban markets
become saturated. This "bottom of the pyramid" approach is
the best indicator of how employment, income, and consumption
tastes are changing outside of India's metros.


15. (SBU) However, poverty remains a considerable and sober
challenge in India, with official (consumption-based)
estimates placing about 26 percent of the population below
the poverty line, which many consider an underestimation.
International standards put about 75% of the population below
the poverty line, meaning they live on under two dollars a
day. In spite of India's economic growth over the past
decade, 47% of its children are malnourished, 2.4 million
children die each year of preventable diseases (and 500,000
of those from diarrhea),only 38% of the children are fully
immunized, and 50% of children drop out of school before the
eighth grade. In considering India's growth story and its
need for inclusive growth, it is probably more useful to
think of regional and state differences that create more than
just the two India's of its cities and countryside.

--------------
BIG SHIFTS POSE CURRENT CHALLENGES
--------------


16. (SBU) As manufacturing and industrialization take off,
businesses need land, as seen in the attempt to establish
special economic zones across the country. Most States are
developing their own policies for land acquisition or
leasing, but are looking to the central government to
articulate a resettlement policy for those who are displaced
by transitioning land from agricultural to industrial use.
This is a challenge given India's land size is only one-third
China's, yet supports nearly as many people. For Indian
landowners themselves, the transition is less problematic, as
land prices have gone up considerably. However, millions of
landless agricultural workers and those who leased their land
from bigger farmers do not receive any compensation for the
loss of their livelihood when land is purchased from the
farmers. Before these changes, they were already among the
most economically vulnerable.


17. (SBU) India's emerging organized retail sector,
especially in produce, poses another challenge to the current
socio-economic structure. Currently, only 3 percent of the
food retail sector is organized. The procurement of
agricultural products was until recently fully under state
government purview, and many states still have laws that
limit the sale of produce to state-sanctioned markets. Thus,
direct sale to private buyers was prohibited. While the
ostensible reason was to protect the farmer (through state
supervision),the result has been a sanctioned monopoly that
created middlemen - called commission agents - who often
exploited the farmers' lack of selling options. The result

NEW DELHI 00000763 005 OF 008


is that Indian farmers typically get 35 percent of the final
retail price of their goods, while in countries with more
organized retail, farmers get 65 percent of that final price.


18. (SBU) Organized retail would benefit farmers and
consumers, but make uncertain the fate of small street
vendors and shopkeepers, who number as many as 40 million.
These groups have joined together in several politically
active associations to protest - and slow down or stop - the
development of organized retail. While Wal-Mart figures into
the rhetoric because of its backend supply joint venture with
Bharti Enterprises, much of the focus is on several large
Indian companies, including Reliance. The benefits to
farmers, from higher sale prices, extension services that
retail companies have offered, and improved infrastructure
and supply chains, would be revolutionary.

--------------
BILATERAL TRADE GROWING
--------------


19. (SBU) India-U.S. two-way merchandise trade touched USD32
billion in 2006 and, available data through November 2007
indicates further growth in 2007 of 28% to USD41 billion.
Last year, the U.S. trade deficit with India went down 42
percent. Despite this strong growth in the trade
relationship, a number of impediments persist and could
impact future trade in both directions. U.S. exporters
continue to encounter tariff and non-tariff barriers, despite
Indian economic reforms and autonomous (non-WTO) reductions
in duties applied to industrial goods.


20. (SBU) Both countries have sought to advance our
bilateral trade dialogue through the U.S.-India Trade Policy
Forum, which is chaired by USTR and the Commerce Ministry and
meets semiannually. The five focus groups that comprise the
Forum- agriculture, intellectual property, investment,
services, and tariff and non-tariff barriers- interact
regularly, often through videoconferences.


21. (SBU) Included among the bilateral Trade Policy Forum
issues are a number of food and feed market access concerns
related to food safety. For example, the USG has been
pressing the Indian government to allow in U.S. poultry, pet
food, dairy products and wheat for some time now. But the
Indian government has not only refused to accept the safety
of these products or recognize our regulatory systems and
standards, they have thrown up additional requirements not
based on science. In fact, the U.S. maintains a 3:1 trade
deficit with India on food and agricultural products with
Indian food/feed shipments to the U.S. of USD1.4 billion.
Further, the Indian government has requested the U.S. allow
in imports of Indian fruit such as grapes, pomegranates and
mangoes. However, only mangoes have been permitted to enter
the U.S. - using radiation treatment to mitigate pests - due
to the GOI's inability to certify that there are no harmful
inspects in shipments to the United States.

--------------
ECONOMIC POLICY-MAKING IN A COALITION
--------------


22. (SBU) After delivering several key reforms, including a
national value-added tax, Open Skies Agreement with the U.S.
(India's first),improved patent protection through
legislation, and privatization of major airports, reform
momentum has noticeably stalled in the UPA coalition.
Several key legislative amendments to liberalize the banking,
insurance and pension sectors are stuck in Parliament, mainly
because of opposition by the Left parties. The Finance
Minister has acknowledged this, ascribing it to the challenge
of heading a coalition. Given the UPA's inherent
instability, and the harsh ideological divides between the
Left and reformers like the Prime Minister and his economic
team, the Ministry of Finance (MoF) has publicly described a
newer approach to "opportunistic reform" - exploiting new
economic developments or pressures that permit
non-Parliamentary reforms to be enacted.

--------------
NEW BUDGET HAS PRE-ELECTION POPULIST FOCUS

NEW DELHI 00000763 006 OF 008


--------------


23. (SBU) The UPA presented its last budget before national
elections on February 29 and delivered an expected
pre-election, populist budget that targeted both poor farmers
and middle class taxpayers. While government finances can
handle some increased spending - revenues have more than
doubled since 2002 - the $189 billion budget broke with the
past few years of fiscal debt reduction. It promises a $15
billion small farmer debt waiver and no reform of ballooning,
but ineffective, subsidies for food, fertilizer, and oil.
The budget did increase allocations for education and health
by 20% and 15% respectively, as the government seeks to boost
access to primary health care and secondary education,
especially in rural areas. The government also significantly
raised spending on urban and rural infrastructure, including
roads, electrification, and sanitation.

--------------
MILITARY TO MILITARY
--------------


24. (SBU) The trend in the U.S.-India security relationship
is overwhelmingly positive, despite irritants such as
unsigned agreements on logistics support and the sharing of
classified information, which have lingered for years. The
Indian military - particularly the Navy - generally is more
willing to push the envelope on closer relations than any
other GOI body. Malabar 2007 brought Japan, Australia and
Singapore together with the U.S. and India for the first time
for naval exercises. Red Flag 2008 in the Nevada desert will
include India as the first-ever non-NATO country/major
non-NATO ally to participate. The first ever U.S.-India
cooperation under the Global Peacekeeping Operations
Initiative took place in January 2008, and with India as a
global leader in PKO participation and training, there is
hope for expanding GPOI cooperation. Secretary Gates visited
India February 26-27, the first visit by the U.S.SecDef since
Secretary Rumsfeld signed the Defense Framework Agreement in

SIPDIS
June 2005, and solidified gains in military-to-military
relations. Defense sales, dormant for over 40 years while
India was essentially a Soviet client, have just started to
take off, with a billion dollar deal for six C-130s finalized
in January the latest breakthrough. We're hoping to finalize
a separate billion dollar deal for P-8 maritime patrol
aircraft, and both Boeing and Lockheed Martin are competitors
for the estimated $10 billion combat aircraft bid expected to
be decided in 2009.

--------------
TERRORISM/COUNTERTERRORISM
--------------


25. (SBU) India continues to rank among the world's most
terror-afflicted countries. The conflict in Jammu and
Kashmir, attacks by extreme leftist Naxalites and Maoists in
eastern and central India, assaults by ethno-linguistic
nationalists in the northeastern states, and terrorist
strikes nationwide by Islamic extremists took more than 2,300
lives in 2007. There were several major attacks linked to
Islamic extremists in 2007. Indian officials claim that the
perpetrators of these attacks have links to groups based in
Pakistan and Bangladesh, particularly Lashkar-e-Taiba,
Jaish-e-Mohammad, and Harkat-ul-Jihad Islami, among others.
The violence in Jammu and Kashmir abated somewhat in 2007,
but the area remains volatile. Prime Minister Singh has
called leftist extremist (Maoist or agrarian Naxalite)
groups, "the greatest threat to India's internal stability
and democratic culture." Leftist extremist groups are very
active in wide areas of impoverished rural eastern and
central India, and also operate in parts of southern India.
Ethnic-linguistic separatist groups attack and kill in
Northeastern India, particularly in the states of Assam,
Nagaland, Manipur, Tripura, and Meghalaya. Several
proscribed terrorist groups operate in the northeast,
including the United Liberation Front of Assam (ULFA) and the
People's Liberation Army.


26. (SBU) The lack of security, remoteness, and inhospitable
terrain combine to prevent the government from providing
security and other basic services in many of the areas in

NEW DELHI 00000763 007 OF 008


which the leftist extremists and the northeastern separatist
groups operate. The Indian government's counterterrorism
efforts are hampered by its outdated and overburdened law
enforcement and legal systems. The Indian court system is
slow, laborious, and prone to corruption; terrorism trials
can take years to complete. Many of India's local police
forces are poorly staffed, lack training, and are
ill-equipped to combat terrorism effectively.


27. (SBU) The United States cooperates with India under the
Counter Terrorism Joint Working Group, which meets twice a
year. Our Anti-Terrorism Assistance program provides
training to India's law enforcement officials. One area of
concern is that the program will be cut significantly in FY

2009. We are also in the beginning stages of developing
regional programs designed to bring together relevant
officials from South Asian nations in training opportunities.
The Office of Defense Cooperation also provides
counterterrorism courses to a small number of military and
civilian officials each year.

--------------
TRAFFICKING IN PERSONS
--------------


28. (SBU) The Department of State is required by law to
submit a report each year to the U.S. Congress on foreign
governments' efforts to eliminate severe forms of trafficking
in persons. The report is intended to raise global
awareness, highlight efforts of the international community,
and encourage foreign governments to take effective actions
to counter all forms of trafficking in persons. Countries
meeting minimum standards under U.S. law are placed in Tier

1. Those assessed as not fully complying with minimum
standards but which are making significant efforts to do so
are classified as Tier 2. Countries assessed as neither
complying with the minimum standards nor making significant
efforts to meet them are classified as Tier 3.


29. (SBU) To quote the 2007 Trafficking in Persons (TIP)
Report: "India is placed on the Tier 2 Watch List for a
fourth consecutive year for its failure to show increasing
efforts to tackle India's large and multidimensional problem.
Overall, the lack of any significant federal government
action to address bonded labor, the reported complicity of
law enforcement officials in trafficking and related criminal
activity, and the critical need for an effective
national-level law enforcement authority impede India's
ability to effectively combat its trafficking in persons
problem."

--------------
CLIMATE CHANGE
--------------


30. (SBU) As a non-Annex I country with no obligations
beyond monitoring and reporting emissions, India is a strong
supporter of the Kyoto Protocol and is fully locked into the
UN Framework Convention on Climate Change (UNFCCC). While
India is a regular participant in the Major Economies
Meetings (MEM) process and takes the threat of climate change
seriously, the GOI position on climate change has remained
virtually unchanged and can be summarized in the following
four points: 1) any future international agreement on
climate change must be negotiated under the rubric of the
UNFCCC; 2) the common but differentiated response language of
the UNFCCC must be maintained; 3) India's economic
development and poverty alleviation goals require great
increases in power generating capacity which is highly
dependent on coal and any accompanying increases in India,s
green house gas (GHG) emissions cannot be reduced or checked
by a future agreement on climate change; and 4) clean
technology transfer must be provided to India and other
developing countries at low or no cost. Recently, Prime
Minister Manmohan Singh announced India would never emit more
GHGs on a per capita basis then the average emissions of
developed countries. Given India's population of
approximately 1.2 billion, this pledge will have no impact on
curbing India's GHG emissions for the foreseeable future
considering that, on a per capita basis, India is ranked 146
in GHG emissions despite the fact its gross emissions

NEW DELHI 00000763 008 OF 008


overtook Russia's in 2007, making India the world's fourth
largest overall emitter of GHGs. It should be noted,
however, that large scale development of civilian nuclear
energy, as permitted under the U.S.-India civil nuclear
agreement, would substantially reduce India's future
production of greenhouse gases.

--------------
VISA GROWTH MIRRORS PEOPLE-TO-PEOPLE TIES
--------------


31. (U) One of the fundamental strengths of the U.S./India
relationship is large number of Indians who have personal
links to the United States. Following decades of travel and
immigration (even through the darkest days of our bilateral
relationship) a majority of the people you would meet in a
Board Room or at a Government conference table have some
family who have studied, worked, or lived in the United
States. With some 84,000 enrolled in the United States,
India is the largest source country for foreign students.
This remarkable trend is accelerating, as visa demand is
increasing by 25% per year (50% in Mumbai). Mission India,
understanding the underlying value of the mutual
understanding gained through increased travel, has dedicated
unprecedented resources to the challenge. As a result in FY
2007, our non-immigrant visa production soared from 459,000
to 726,000 cases. We are investing in infrastructure and
personnel to continue to make people-to-people ties one of
the pillars of our dynamic bilateral relationship. Finally,
another interesting trend is the increase in Indian-Americans
who are returning to their country of birth to take advantage
of the economic miracle here.


32. (SBU) Once again, we look forward to welcoming you to
India and to working with your staff to ensure a successful
and productive visit.
MULFORD