SCENESETTER FOR INDIA VISIT OF UNDER SECRETARY

UNCLAS SECTION 01 OF 03 NEW DELHI 001138

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PREL PGOV IN
SUBJECT: SCENESETTER FOR INDIA VISIT OF UNDER SECRETARY
BURNS


1. (SBU) Under Secretary Burns:

In many respects, your visit represents the moment so many of
us who manage the India account have waited years for: a
time when U.S. officials can engage with a new, strong Indian
government freed from the constraints of anti-American
coalition partners or a precarious political position with a
commitment to elevate the relationship. This is truly an
opportune moment in our bilateral history with this Asian
giant/strategic partner, and, following a pause in our
relations while our two large democracies went through their
own election processes, will mark the beginning of new era of
engagement, ripe with potential. Of course, the relationship
is far from perfect, and today there remains a noticeable
undercurrent of public opinion which is skeptical of
America's intentions in India. However, as the Obama
administration's first senior official to meet in India with
the new government, your visit has the chance to set the tone
and begin to lay the necessary ground work to take our ties
to the next level.

-------------- Indian Elections: Congress Party Returns with Renewed
Strength --------------


2. (SBU) The surprisingly strong performance by the Congress
Party and its United Progressive Alliance allies in India's
national election has returned Prime Minister Manmohan Singh
to office and provided the Congress Party with a mandate to
govern -- surely a welcome change for the Prime Minister
after years of battling communists and regional coalition
"partners" over both domestic and foreign policy issues.
This has allowed the Prime Minister to assemble what some in
the media have referred to as "Manmohan's dream team" in his
cabinet, including the addition of the new External Affairs
Minister, S.M. Krishna. Krishna is the first Indian foreign
minister to have received a degree from a U.S. university
(Southern
Methodist University, along with a Fulbright term at George
Washington University),and in his first press interaction he
promised to consolidate India's partnership with the U.S.,
along with other major powers like Russia, China, Japan and
the EU. With the UPA's victory, and the return to the
cabinet of key players such as MK Narayanan as National
Security Advisor, Pranab Mukherjee as Finance Minister, P.
Chidambaram as Home Minister, and AK Anthony as Defense
Minister, we anticipate stability in our bilateral
relationship and a continuation of the positive trend that
has marked our ties for the past decade.

-------------- Indian Mood: Unstable Region, Global Power Growing
Pains Detract from Election Honeymoon --------------


3. (SBU) While the elections seemed to convince most pundits
that the GOI was set to move quickly and boldly on its
foreign policy agenda, serious challenges which pre-dated the
election remain as a sobering reminder of how far India has
to go to reach its stated goal of becoming a global player.
One thing that seems to never change is India's perception
that Pakistan is an existential threat, and the Indians are
following very closely how Islamabad prosecutes perpetrators
of the Mumbai attacks and acts (or doesn't act) against
Lashkar-e-Taiba. A silver lining to the Mumbai terror was
the subsequent unprecedented law
enforcement cooperation between the U.S. and India on the
investigation; however, senior Indian officials have warned
us not to trust Pakistan's intentions in pursuing the Mumbai
terror networks. Pakistan,s release of JuD Chief Hafiz
Saeed has added to the suspicion. India has responded to
every Pakistani request for further evidence, fully cognizant
of how it is in India's interest not to appear to balk at
such requests, but Foreign Minister Krishna made it clear in
his first days in office that India's policy remains that it
will not return to a formal Composite Dialogue with Pakistan
until Mumbai terrorists are prosecuted.


4. (SBU) Despite early concerns, the GOI now appreciates
Special Representative Holbrooke's active outreach to India
on Afghanistan-Pakistan policy, and has made general
statements agreeing to do more

NEW DELHI 00001138 002 OF 003


for Afghan reconstruction. However, despite reassurances
from Holbrooke and the Embassy to GOI officials,
hypersensitivity remains in the Indian public over the
question of whether the U.S. intends to interfere in Kashmir
and/or sacrifice Indian security interests to U.S. objectives
in Afghanistan. Elsewhere in the region we and India
generally share the same goals for stability and freedom in
places such as Nepal, Bangladesh and Sri Lanka, and have
coordinated better than in the past. Burma and Iran remain
exceptions; India's proximity, historical ties and economic
interests leave it with a policy perspective that more often
than not diverges from ours. On the global stage, we have
heard Indian strategic thinkers describe their goal is for
India to become "a regional power and global player." The
ambition at the top levels of government is readily apparent,
as India seeks permanent UNSC membership, proudly takes a
seat at the G-20 table, modernizes its military, and begins
to take on greater security responsibilities such as
anti-piracy operations off Somalia.


5. (SBU) Still, the weight of domestic poverty coupled with,
as one senior GOI official recently admitted to us, a dearth
of capacity in the bureaucracy, has meant that capability has
not been able to keep up with ambition, and by all
appearances won't for the next several years. (Note: While
India,s poverty levels have fallen in the past decade along
with a rapidly growing economy, hundreds of millions of
Indians continue to subsist on less than two U.S. dollars a
day. End Note.) The good news for U.S. interests is that
the same senior officials who have a vision for India's
ascendancy generally recognize that healthy relations with
America are essential for India to get to where it wants to
be. The Congress party attributes a large deal of its
electoral success to the close attention it paid to the rural
sector of the economy. Over the past year, the UPA has
implemented a number of costly subsidy, debt waiver and rural
income support programs that, along with good monsoons, have
led to relatively strong rural and agricultural growth.
Despite the anticipation of some big bang, economic
reforms, the more likely approach by the new government is
gradual reform with a close eye at each step on the political
and social effects of policy changes. The watchword,
emphasized by Finance Minister Mukherjee, will be rapid,
inclusive growth, with spending and investment on
infrastructure and an expanding social safety net.

-------------- Deliverables: Suddenly Some Old Fruit May Be Hanging
Low Enough For Picking --------------


6. (SBU) One main thrust of your visit will be to discuss the
institutionalized dialogues that will
form the pillars for our relationship in the coming years.
We have heard that the Indians are undergoing a similar
review, and will have ideas of their own for how they see the
architecture of our relationship taking shape. We are hoping
for an early readout of the direction India is heading before
your arrival. In addition to that important conversation,
there are other tangible issues ripe for resolving.


7. (SBU) Following the election, Post received clear signals
from contacts at the Ministry of External Affairs, the
Ministry of Defense and through the media that India is ready
to move forward on a few agreements which have been pending
longer than anyone would have expected. Acceptable End-Use
Monitoring (EUM) language is at the top of that list, and
Foreign Secretary Menon is eager to sit down one-on-one with
you to determine a permanent formulation that meets India's
political concerns and DoD's legal
requirements, perhaps as a deliverable for Secretary
Clinton's visit or even earlier if possible. Working level
contacts at MoD suggest that the Communications
Interoperability and Security Memorandum of Agreement
(CISMOA) is also within reach, pending a review by the
Cabinet Committee on Security. A third agreement, the
Logistics Support Agreement, has also been brought up again
by MoD contacts. We recommend you push for approval of all
three agreements (technically the EUM language is not a
"formal" agreement,
but due to domestic political sensitivities will require

NEW DELHI 00001138 003 OF 003


Cabinet approval) to be concluded as early as possible,
reiterating our points that these will clear the way for even
more robust defense cooperation, something Prime Minister
Singh has mentioned as a growth area for the relationship.


8. (SBU) We also hope your visit will be able to clear away
obstacles to implementing the civil nuclear agreement. The
Indian Cabinet and Parliament need to approve liability
legislation to protect U.S. and other foreign companies, but
once that is enacted we are hoping to have an announcement --
again, at or before the time of Secretary Clinton's visit --
of the designation of two nuclear park sites for U.S.
companies.


9. (SBU) We appear to have reached agreement on the way
forward for implementing a Technology Safeguards Agreement
that would also launch what we hope are expedited
negotiations on a Commercial Space Launch Agreement as well
as discussions on our satellite services markets. However,
we are still awaiting a
response to our latest suggested language for our diplomatic
notes that, if approved in time, would allow you and
Secretary Menon to jointly sign. Should signing the
agreements not be possible by the time or your visit, Post
recommends you push to have this concluded in time to be
included in the Secretary's visit.

-------------- Your Visit Coincides Nicely with Counter-Terrorism
Efforts --------------


10. (SBU) Your visit immediately proceeds the annual
bilateral Counterterrorism Joint Working Group (CTJWG)
meeting, which will be held this year in Washington on June

16. We do not expect the talks, which are led by MEA, to
result in any front page news, but there is considerable
interest among U.S. agencies in increased cooperation in law
enforcement training and financial counterterrorism. We will
also encourage India to play a constructive role in
sub-regional cooperation efforts, particularly on border
issues with Nepal and Bangladesh.

-------------- Your Meetings --------------


11. (SBU) All signs are that the new government is eager to
receive you and get the ball rolling on the next phase of the
U.S.-India relationship. The Americas Division at MEA has
told us that most if not all of the senior officials we have
requested will be available to meet with you: Prime Minister
Singh, External Affairs Minister Krishna, Home Affairs
Minister P. Chidambaram, National Security Advisor
Narayanan, Deputy Planning Commissioner Montek Singh
Ahluwalia, Foreign Secretary Shiv Shankar Menon, Special
Envoy Shyam Saran, and Leader of the Opposition L.K. Advani.
Your program in Mumbai will focus on outreach to young people
and the business community as well as civil society.
BURLEIGH