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

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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
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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
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

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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.
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