50-50 CHANCE AT BEST FOR NUCLEAR DEAL AFTER MAY 9,

C O N F I D E N T I A L SECTION 01 OF 02 NEW DELHI 000989 SIPDIS SIPDIS E.O. 12958: DECL: 04/02/2018 TAGS: PREL PARM TSPL KNNP ETTC ENRG TRGY IN SUBJECT: 50-50 CHANCE AT BEST FOR NUCLEAR DEAL AFTER MAY 9, EXPERTS AND POLITICIANS SAY Classified By: Political Counselor Ted Osius for Reasons 1.4 (B and D) ¶1. (C) Summary: In light of the continuing political debate in Delhi, Indian observers have counseled that the central government will wait at least until Parliament approves the budget on May 9, after which the Congress Party may decide to move forward with the nuclear deal by submitting the safeguards agreement to the IAEA Board of Governors. Member of Parliament Shobana Bhartia, who also publishes the Hindustan Times, told visiting Deputy Assistant Secretary for South and Central Asian Affairs Evan Feigenbaum April 1 that the media has given the nuclear initiative a "50-50 chance" of completion, but warned that only the Prime Minister could make the call. The PM's Media Advisor and confidant Sanjaya Baru, on the other hand, put the ball in Congress Party President Sonia Gandhi's court. While supporters such as former chairman of the Atomic Energy Commission M.R. Srinivasan expressed great frustration with the slow pace of the government, others have advised poloff to relax, with Indian Express columnist Raja Mohan recalling how the U.S. had worried that the U.S. Congress had run out of time to pass the Hyde Act. End Summary. Bhartia Gives Nuclear Deal 50-50 Chance - - - ¶2. (C) In an April 1 meeting with Deputy Assistant Secretary for South and Central Asian Affairs Evan Feigenbaum, Member of Parliament (MP) and Hindustan Times publisher Shobana Bhartia assured that the U.S.-India partnership would remain strong with or without the nuclear deal. She recalled how the bilateral relationship had depended on the particular parties in power in each government until the late 1990s, when bipartisan support to strengthen U.S.-India ties emerged. "Only the Left is against the U.S., not the BJP," she stated, and explained that the BJP only opposes the 123 Agreement because of "politics." ¶3. (C) Bhartia recounted that she had spoken in the Rajya Sabha (upper house) of Parliament in support of the nuclear initiative several times. She told Feigenbaum that the Prime Minister knows the constraints of the timeline and "feels the deal is the right thing to do," but he faces a hardened opposition. She observed that during the recent budget debate in Parliament, "the Communists' speeches were the most �00A;shrill and vituperative," exceeding even the opposition BJP. "I don't think the Left will budge, but rather it is now the Prime Minister's call whether to go forward," she offered. She related that "media speculation is of a 50-50 chance of the PM pushing the deal ahead." Asked by Feigenbaum if the Congress and BJP would join forces to thwart the Left, Bhartia derided the divisive nature of India's present politics. "There used to be some sense of bonhomie and socializing, but now the divide between the parties is quite clear," she lamented. Prime Minister,s Adviser Dissects What Went Wrong - - - ¶4. (C) The Prime Minister,s media adviser, Dr. Sanjaya Baru, explained to DAS Feigenbaum why it had been impossible for the BJP and Congress to collaborate on an issue that is clearly in India's interest. Sonia Gandhi, he said, nurtures a grudge against opposition BJP leader L.K. Advani because the latter challenged her credentials as an Indian leader on the basis of her Italian roots. Separately, the Prime Minister refused to reach out to Advani early on because he remains angry that Advani would not let him present his own Cabinet to the Parliament -- and he was the first Indian Prime Minister to be refused that privilege. Aside from these petty grudges, the Congress Party's broader concern was to avoid appearing to collaborate with the BJP because it would cost Congress a significant number of Muslim votes at election time. ¶5. (C) Baru, who went to university with Prakash Karat, believes the Communist leader made an effective political calculation in opposing the civil-nuclear initiative. He consolidated a fragile hold on the CPM leadership by emphasizing his "anti-imperialist" ideological credentials, thereby outflanking more experienced Politburo members in his quest to hold on to the top slot. As a consequence, the CPM NEW DELHI 00000989 002 OF 002 re-elected Karat as Politburo chief April 3. ¶6. (SBU) Note: Dr. Baru will depart from the PMO in August, joining High Commissioner Jaishankar and columnist Raja Mohan, two other champions of U.S.-India relations, in Singapore, where he plans to teach at the Lee Kwan Yew University of Communications. End Note. M.R. Srinivasan Frustrated By Slow Movement - - - ¶7. (C) Former Atomic Energy Commission (AEC) Chairman M.R. Srinivasan, who still serves as a member of the AEC, complained to poloff March 30 about the lack of movement on the nuclear initiative. Having written several editorials that explain the necessity of the 123 Agreement and Nuclear Suppliers Group exemption for the health of India's nuclear program, he bemoaned that the political parties have willfully misunderstood the terms of the agreement. He recalled that he had offered to brief the UPA-Left committee chaired by External Affairs Minister Pranab Mukherjee, who rebuffed his suggestion by explaining that only politicians should participate in the committee. As a result, the political debate has sustained basic misreadings about the initiative and India's nuclear program, which he sought to counter by publishing more editorials. Raja Mohan Says Not To Worry, But Others Have No Hope - - - ¶8. (C) Meanwhile, commentators continue to read the tea leaves. Indian Express columnist Raja Mohan reminded poloff that U.S. officials had thought the 2006 congressional calendar and mid-term elections would doom passage of the Hyde Act, which passed overwhelmingly during the lame duck session. He instructed patience and expressed hope that the UPA government would see the initiative through by the end of ¶2008. India Today's Raj Chengappa, however, was more downbeat during a lunch with Feigenbaum, during which he called the deal "dead." Ashok Malik of The Pioneer countered the pessimism and declared that the government might still move forward on the initiative in May. France Not Ready to Give Up - - - ¶9. (C) During a March 31 meeting with Ambassador Mulford, French Ambassador Jerome Bonifant conveyed that "Paris was not in a mood to give up." He felt that the Indian government had two misconceptions about the timeline, both of which compel it to act too conservatively: 1) the belief that there are no real deadlines; and 2) the expectation that bipartisan consensus in favor of the nuclear initiative will continue into the next administration. Regarding the NSG, he cited Austria and New Zealand as the most potentially troublesome, while he thought that Ireland will not stand in the way of consensus. He urged that the U.S. go straight to the political leadership of NSG countries and skip the technical experts, who, he observed, have had many opportunities to comment on the details of the NSG. He hoped that the NSG would craft a "very plain and simple exemption that goes through quickly." Comment: Deal's Not Dead, Yet - - - ¶10. (C) With low expectations for a positive outcome in the April 17 UPA-Left Committee meeting, most observers do not expect the submission of the safeguards agreement to the IAEA before the budget vote planned on May 9. Getting the budget passed may finally carve out the political space that allows the government to test the resolve of Left leaders. However, with the Karnataka state election scheduled to occur throughout the month of May, hesitant Congress leaders now have another excuse to stall the initiative and take India's political temperature, and the political parties will have further motivation to stick to their stances against the deal. WHITE