SCENESETTER FOR DEPUTY SECRETARY LEW'S VISIT TO

S E C R E T SECTION 01 OF 07 NEW DELHI 001812

NOFORN
SIPDIS

E.O. 12958: DECL: 08/31/2019
TAGS: OVIP LEW PREL EAGR EAID IN
SUBJECT: SCENESETTER FOR DEPUTY SECRETARY LEW'S VISIT TO
INDIA

REF: SECTO 00008

Classified By: Ambassador Timothy J. Roemer for Reasons 1.4 (B,D)


1. (SBU) Mission India warmly welcomes you to New Delhi.
This is an opportune moment as we seek a truly global
partnership with India and build upon the Secretary's highly
successful July visit (Ref). Secretary Clinton and her
counterpart, External Affairs Minister S.M. Krishna, formally
launched the U.S.-India Strategic Dialogue, which broadens
and deepens our partnership in addressing key global
challenges. The Dialogue has a five pillar foundation:
Strategic Cooperation; Energy and Climate Change; Education
and Development; Economics, Trade, and Agriculture; and
Science, Technology, Health, and Innovation. Our success in
accelerating the Strategic Dialogue in the run up to Prime
Minister Singh's November official state visit will depend on
working closely with our Indian counterparts as we focus on
the most productive areas for cooperation. We would also
like to highlight where the Mission could use greater
resources to implement effectively this top foreign policy
priority for the Obama Administration.

Forward-Looking and Ready for the World Stage
--------------


2. (C) The strong performance by the Congress Party and its
United Progressive Alliance (UPA) allies in India's national
elections in April provided the Congress Party with a mandate
to govern, after years of battling communists and regional
coalition "partners" over both domestic and foreign policy
issues, including a closer relationship with the United
States. With the return to the Cabinet of key players such
as Pranab Mukherjee as Finance Minister, P. Chidambaram as
Home Minister, and A.K. Antony as Defense Minister and the
addition of U.S.-friendly External Affairs Minister Krishna,
we anticipate stability in our bilateral relationship and a
continuation of the positive, if sometimes bumpy, trajectory
that has marked our ties for the past decade. The UPA
government's task, whether on foreign policy or on domestic
issues, is made easier by the steady meltdown of the
Bharatiya Janata Party, which has become victim of publicly
played out bloodletting and vicious factionalism after its
trouncing in the polls.

Aspirations and Roadblocks
--------------


3. (SBU) India is a regional power that aspires to become a
global player. The ambition at the top echelons of the
government is readily apparent, as India vigorously pursues
its number one foreign policy goal -- a permanent UN Security
Council seat. India uses its voice in the G-20 and active
engagement in multilateral fora like the East Asia Summit and
the Brazil-Russia-India-China Summit to raise its profile.
Although the Congress Party's victory set the stage for
bolder moves on its foreign policy agenda, serious challenges
remain. India's slow-moving bureaucracy is stove piped and
suffers from a lack of capacity in every sector. Many senior
officials entered government service during the Cold War era
and still espouse the "non-aligned" rhetoric of the '60s and
'70s.


4. (SBU) The extreme level of domestic poverty also stands in
stark contrast to India's global ambitions. While India's
poverty levels have fallen in the past decade as the economy
has grown, hundreds of millions of Indians continue to
subsist on less than two U.S. dollars a day. India is home
to the third largest number of people living with HIV/AIDS
and one-fourth of the world's tuberculosis cases. It is one
of four nations in which polio still exists. PM Singh has
signaled that improved governance and service delivery toward
poverty reduction are top priorities in his second term.


5. (SBU) Despite expectations that the current coalition's
strong base would allow it to pursue "big bang" economic
reforms, the more likely approach is gradual reform with a
close watch at each step on political and social effects of
policy changes. Congress Party leaders attribute its strong

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showing in the April elections to the close attention it paid
to the rural sector during the previous government.
Accordingly, the UPA's July 6 budget proposal focused most
new spending on a rural employment program and rural
infrastructure.

Afghanistan-Pakistan
--------------


6. (C) As it seeks to make strategic investments to bolster
its regional and global goals, India points with pride to its
ongoing "development partnership" with post-Taliban
Afghanistan that began in late 2001. The GOI claims that the
sum of its performed and pledged assistance to date totals
USD 1.2 billion. The bulk of the aid is channeled directly
through the Afghan government, and includes military and
police assistance. We would like to coordinate better with
India to avoid duplicative, contradictory, and incompatible
approaches and methods between Indian assistance/training and
that provided by the USG, NATO, and other international
partners. On Pakistan, the view is pessimistic about
prospects for a near-term thaw in relations; India continues
to demand that Pakistan match counterterrorism rhetoric with
deeds. Domestic political fallout over PM Singh's July
meeting in Sharm al-Sheikh with Pakistani PM Gilani and a
widespread perception of Pakistani bad faith in cracking down
on terror directed at India combine to make resumption of the
"composite dialogue" difficult for the Singh government,
though contacts between Indian and Pakistani officials are
continuing.

U.S.-India 3.0 - Strategic Dialogue Progress
--------------


7. (SBU) Since the U.S.-India Strategic Dialogue launched
during the Secretary's visit, Mission India has been hard at
work to identify concrete deliverables for PM Singh's
official state visit to Washington on November 24. The
dialogue's five pillars break down into 18 sub-dialogues,
which require cooperation across agencies both in India and
Washington. We are also considering long-term goals for the
strategic partnership, which will demand continued
collaboration and increased resources. Post predicts the
most fruitful dialogues in the near-term will be the Defense
Policy Group, Energy and Climate Change, and Education. We
also believe there is tremendous potential when structuring
the right partnership and demonstrating the scale-up
trajectory on anti-poverty programs.

Strategic Cooperation Pillar
--------------


8. (SBU) We seek a closer partnership with India on defense,
counterterrorism, intelligence sharing, homeland and port
security, and non-proliferation issues. This pillar covers
strategic security talks (nonproliferation),the high
technology cooperation group, the defense policy group, a
forum on global issues, the joint working group on
counterterrorism, and an expanded discussion of security
challenges in South Asia and beyond, including the Middle
East, Africa, and East Asia.


9. (SBU) The strategic security talks represent an
unprecedented opportunity to engage the Indian Government on
the full scope of nonproliferation policies and programs. As
we work to complete the Civil Nuclear Cooperation Agreement,
Indian officials have signaled a willingness to engage with
U.S. counterparts on nonproliferation, but are also wary of
U.S. intentions after decades of estrangement over these
issues. We anticipate the first such discussion on a
comprehensive nonproliferation agenda will take place during
the hoped-for October visit of Under Secretary Tauscher. In
addition to many policy issues on the agenda, we hope to
promote several programs that will require continued funding,
including the Export Control and Related Border Security
Program, the Secure Freight Initiative, Second Line of
Defense/Megaports, and cooperation on biological, chemical,
and radiological security.


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10. (SBU) The Civil Nuclear Cooperation Agreement marked a
watershed in the bilateral relationship. Its full
implementation is important not only to achieve commercial,
economic, nonproliferation, and environmental benefits, but
also to build the trust necessary to tackle the next set of
difficult issues, such as climate change. There are some GOI
officials and editorial writers that doubt the new
administration's full commitment to this agreement. Senior
Indian officials have said they intend to resolve several
outstanding implementation issues prior to PM Singh's visit
to Washington. These include publicly announcing the
designation of two reactor park sites for U.S. companies,
submitting civil nuclear liability protection legislation to
the Indian Parliament, and filing a declaration of
safeguarded facilities with the IAEA. U.S. and Indian
delegations will meet to continue reprocessing consultations
in late September and early October with the goal of
initialing a text before PM Singh,s visit. We are also
pressing India to provide so-called "Part 810" license
assurances to enable U.S. firms to share sensitive
information with potential Indian commercial partners.

The Defense Relationship
--------------


11. (S) In general, the defense relationship is on a strong
growth curve despite a variety of frustrations. While the
Indian uniformed leadership of all three Services, and in
particular the Indian Navy, appreciate their improving ties
with the U.S. military, bureaucratic inertia and recalcitrant
officials in the Ministries of External Affairs
and Defense continue to complicate attempts to improve the
partnership. Despite these challenges, military-to-military
contacts continue to be a strong foundation of our strategic
partnership. We conducted the largest ground
forces/counterterrorism centric combined exercise to date in
February 2009 and are poised to conduct air and army
exercises in the fall. This year India has already hosted
visits from the Chairman of the Joint Chiefs of Staff, the
Commander of United States Pacific Command, the Commandant of
the United States Coast Guard, and the Commandant of the
Marine Corps. We continue to seek opportunities for
capacity-building, greater access and improved partnering
through more focused combined exercises, better-tailored
subject matter exchange events, and additional high-level
visitor exchanges.


12. (C) Defense sales have risen from near zero in 2004, to
over USD 2.2 billion already in 2009, with prospects for much
greater expansion. The recent Government-to-Government
agreement on EUM language sets the stage for even greater
success in this arena, as all three Indian services are
modernizing their forces. The next agreement we wish to
conclude with the GOI is the Communications Interoperability
and Security Memorandum of Agreement (CISMOA). This MOA is
required to legally permit sharing/selling of encryption
equipment that would enable capabilities such as secure
communications and military GPS utilization. The United
States Pacific Command has been pursuing the CISMOA with
India since 2005 without resolution, but the GOI has told us
that CISMOA would be possible after EUM language was
resolved. One challenge is in maintaining the GOI commitment
to travel abroad for education and receive military training
visitations at home (they will often cancel at the last
minute).

Counterterrorism
--------------


13. (SBU) India continues to rank among the world's most
terror-afflicted countries. We have seen increased
willingness to accept U.S. offers of training and other
assistance, particularly from the FBI and on intelligence
sharing, in the wake of the November 2008 attacks in Mumbai.
Minister of Home Affairs Chidambaram's September 7-10 visit
to the United States will be a critical opportunity to focus
Indian attention on the need for communication across
agencies and strong relationships with our law enforcement
and intelligence agencies. He will meet with several Cabinet

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officials, including Secretary Clinton, the Director of
National Intelligence, and the Director of the FBI, and will
visit the Joint Terrorism Task Force in New York and the
National Counterterrorism Center in Washington. We continue
to encourage India to play a positive role in sub-regional
cooperation efforts, particularly on border issues with
Bangladesh and Nepal.

Energy and Climate Change Pillar
--------------


14. (SBU) In addition to the boost that the Civil Nuclear
Cooperation Agreement is poised to give to our energy
relationship, India is keen to increase engagement with the
United States on research and development of technologies for
clean, renewable energy, and on energy efficiency. Both
Indian officials and business leaders are eager to work on
tangible outcomes in the renewable energy sector, including
solar and wind systems. India has agreed to host the
International Renewable Energy Conference in October 2010,
building on the successful 2008 conference in Washington.
Indian officials do not, however, expect these other energy
forms will replace existing capacities or substitute for
large scale expansion of coal-fired thermal power. (Note:
Coal-fired thermal power accounts for 53 percent of India's
total power generating capacity and over 66 percent of
India's electricity production. End Note.)


15. (SBU) In spite of the convergence on clean energy, U.S.
and Indian views on climate change differ and,
unsurprisingly, we have divergent expectations for
Copenhagen. Indian officials have rejected greenhouse gas
emission monitoring or reduction commitments. They argue that
primary responsibility for global warming lies with developed
countries, and that India is entitled to an equal per capita
share of the "global carbon space," particularly in light of
its need for economic development. India recently reached out
to China to seek a common position against binding
commitments at Copenhagen. (Note: India's per capita
electricity consumption and per capita carbon dioxide
emissions are five to six percent of U.S. levels; 55 percent
of the population has no access to electricity. End Note.)


16. (SBU) Notwithstanding our differences, Indian Special
Climate Envoy Shyam Saran told Todd Stern in July that he
"did not see a big gap in substance between the Indian and
U.S. position." India is very interested in intensifying our
bilateral Global Climate Change Dialogue to foster
cooperation on reducing greenhouse gas emissions and promote
sustainable, low-carbon development. The Mission, in
consultation with OES and SECC, is developing proposals for
climate change cooperation partnerships -- with the GOI
contributing matching funds -- that could promote a variety
of projects, including on clean energy technologies and on
black carbon reduction by wide-spread use of efficient
cookstoves. Ministers have told us India wants to conclude
its own climate change MOU with the United States, similar to
our understanding with China, but "plus alpha," including
more concrete cooperation than between the United States and
China.

Education and Development Pillar
--------------


17. (SBU) We wish to combine U.S. and Indian expertise and
knowledge to foster new joint partnerships in education,
development, and women's empowerment. The GOI is beginning
to undertake long-overdue reforms in its education system.
With 50 percent of India's young people leaving school by
eighth grade (disproportionately girls) and 80 percent of the
remainder not completing high school, young Indians and their
parents know very well that their educational system is not
meeting their needs -- and they are increasingly agitated and
vocal about it. The government has begun a major long-term
expansion in the funding for education, building new schools
and expanding educational infrastructure. Meanwhile over
half a million Indians study overseas, over 94,000 in the
United States. The Indian government has proposed that our
Education Dialogue focus on the following areas:

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accreditation of schools and tertiary institutions; the role
and structure of community colleges; challenges of funding
and scaling up large educational institutions; identifying
funds to support university-to-university linkages for
research and teaching; junior faculty development and
enhancing improvements in basic education.


18. (SBU) The Women's Empowerment Forum (WEF) will provide
opportunities to share best practices and partner on relevant
initiatives. The indicators regarding the status of women in
India are startling: female feticide, trafficking for
commercial sex work, domestic violence (approximately 30
percent of married women),and dowry deaths (one death every
90 minutes) affect countless women throughout India. The new
government has made many promises regarding women's political
empowerment - but implementation has historically been slow.
The Mission will be working closely with S/GWI Ambassador
Melanne Verveer -- whom we hope will visit India in early
November -- on initiatives to expand partnerships between
American and Indian women.

Economics, Trade, and Agriculture Pillar
--------------


19. (SBU) The Economic, Trade, and Agriculture Pillar focuses
on how the United States and India can work together to
strengthen bilateral economic cooperation, including reducing
barriers to bilateral trade and investment, strengthening
financial institutions, harnessing the power of our public
and private sectors to spur innovation and help India sustain
economic growth, and developing a productive, internationally
competitive, and diversified agriculture sector in India.
The Trade Policy Forum (TPF),led by USTR Ambassador Kirk and
Minister of Industry and Commerce Anand Sharma, works to
reduce barriers to bilateral investment and trade through
five focus groups and with input from a Private Sector
Advisory Group. USTR Kirk's planned visit will overlap with
your visit. U.S. exports to India have tripled since 2004
and two-way investment has also climbed, but there is
potential for much more trade and investment between our two
economies. USTR is working to arrange the next TPF
ministerial before the Prime Minister's visit, possibly in
Delhi in late October. To accelerate the positive two-way
investment trend, the United States and India launched
negotiations for a Bilateral Investment Treaty in August with
a possible second round in the fall. The Finance & Economic
Forum, led by Treasury and the Ministry of Finance,
encourages financial sector reforms and provides a forum for
exchange between regulatory experts. It is scheduled to meet
at the DAS level on October 28-29 in New Delhi and may expand
its discussion into macro-economic issues. The CEO Forum,
with government participation led by Deputy National Security
Advisor Froman and Deputy Planning Commissioner Ahluwalia,
provides senior-level private sector recommendations for
follow up by each government. Both governments are currently
working on their lists of CEO membership and ideally a CEO
Forum meeting will occur on the margins of PM Singh,s trip
to Washington.

Food Security & USDA Programs in India
--------------


20. (SBU) The Agriculture Dialogue, led by Ahluwalia and USDA
Secretary Vilsack, will seek to increase bilateral
cooperation to maximize opportunities for food security,
poverty alleviation and income generation. We hope to remove
barriers to greater trade and investment between our
countries and harness the power of our public and private
sectors to help India achieve a sustainable agriculture
sector and food security. Agriculture and rural development
are inextricably linked with poverty reduction, but India's
chief crop yields are still lower than other major nations.


21. (SBU) The Indian government sees food security as
primarily a domestic challenge of self-sufficiency in basic
commodities. High food prices have been a major political
issue in past elections and could become a stumbling block
for the current UPA government. While the GOI is prickly
about the subject of food security policy, they welcome

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opportunities to partner with the United States in new
technologies in order to boost output of food grains
including drought resistant wheat, rice, peas, bean, and
lentils. When the Prime Minister talks of the "ever-Green
revolution," he envisions a sustainable agricultural
production system that benefits small and marginal farmers
through improved seed varieties and technology transfers.
However, significant challenges exist to carrying out this
vision given the lack of basic infrastructure in the rural
areas, the bureaucracy-laden farm programs, and land tenure
laws that limit farm size and sale of agricultural land.

Science, Technology, Health, and Innovation Pillar
--------------


22. (SBU) India has a large and diverse S&T infrastructure
that defies generalizations, and ranges from 1950's era labs
to state-of-the-art technologies. By identifying and
promoting opportunities for mutually beneficial cooperation,
the Mission seeks to use the S&T Dialogue to enhance the
already vast academic, commercial, and official collaboration
taking place between U.S. and Indian scientists. The
Science, Technology, Health and Innovation Pillar includes a
three-part S&T Dialogue, and the first bilateral
ministerial-level dialogue dedicated to health and biomedical
sciences. U.S.-India health cooperation focuses on
high-priority areas such as HIV/AIDS, smallpox, influenza and
other infectious diseases, as well as maternal and child
health and medical capacity building. During her July
visit, Secretary Clinton concluded a USD 30 million S&T
Endowment Agreement, a key element of the S&T Dialogue. Both
sides currently are selecting their respective board members
and we anticipate funding of projects will begin in 2010.

USAID Programs in India
--------------


23. (SBU) USAID/India is engaged in partnerships with the
Indian government, the private sector, and non-governmental
organizations to share ideas, international best practices,
technologies, and expertise that results in improved lives
and livelihoods. USAID investment attracts investment from
our partners to develop and deliver innovative models, which
are then scaled up to reach many more people for sustainable
impact. For every dollar USAID invests, an additional four
dollars is leveraged from our partners. In addition, every
USAID dollar invested in these pilot programs result in
Indian devoting an average of USD 35 to scale up the program.
USAID works with our partners to solve problems of mutual
interest to: improve the health of children and families;
reduce green house gas emissions and promote clean efficient
energy; improve agriculture productivity and help farmers get
their products to market more efficiently; prepare youth for
jobs in the modern economy; improve basic education by
developing innovative ways to teach children in the classroom
and support teachers; mitigate the risk and help communities
better prepare for and respond to floods and other natural
disasters; and improve the legal rights of women.

India's Development Assistance Abroad
--------------


24. (SBU) India has pledged USD 1.2 billion in assistance
over ten years to Afghanistan in four broad areas: major
infrastructure projects (dams, bridges, roads, power);
humanitarian assistance (food aid, seeds, and household
supplies); and education and capacity development (supplies,
construction, scholarships, training, and capacity building);
and small and community based development projects (funding
100 small projects). India is by far the largest contributor
of foreign assistance to Nepal. During a August 21 meeting
with Nepalese Prime Minister M.K. Nepal, Finance Minister
Mukherjee announced that the GOI pledged USD 137.5 million to
Nepal to fund a three-phase project to build over 1,300
kilometers of roads in Nepal. India also plans to fund a
police academy, integrated checkpoints along the India-Nepal
border, and upgraded rail link with Nepal. India's foreign
assistance is given to Sri Lanka to fund development projects
for education, health, and infrastructure. In the wake of

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the LTTE's defeat, the GOI has funded de-mining efforts,
donated food aid, and provided over USD 100 million to
rehabilitate war victims in Sri Lanka's northern and eastern
areas. India donated USD 37 million for flood relief in
2007-2008.

The Platform for the Pillars: Resource Issues at Post
--------------


25. (SBU) Mission India Program and ICASS funding, currently
at a combined USD 25 Million plus, has risen to keep pace
with Mission growth. Over the past three years, the Mission
struggled to augment ICASS support positions as our USDH
(U.S. Direct Hire) workforce ballooned by more than 130
non-support positions in response to Consular, trade, health,
and other increases in the USG presence in India. The lag
lessened somewhat with the reprogramming of two positions in
2007, and the introduction of some additional USDH and EFM
ICASS positions to Mission India in 2008 and 2009. If
Mission India receives our requested ELO positions in 2010
and 2011, and MSP-requested positions through 2012, ICASS
will have the depth and breadth to properly support the team
in our expanding partnership with India.


26. (SBU) For the Strategic Dialogue and related growth, our
most severe resource need is in the area of facilities. Land
has been identified, but not purchased for the NCC in
Hyderabad. OBO must secure the price and availability of the
plot they have selected now with funding. In addition,
Embassy New Delhi has formally requested to internally
re-prioritize the Mission India NCC construction list to put
NCC Hyderabad ahead of those planned for Chennai and Kolkata.
The temporary facility in Hyderabad is already undersized,
and can in no way meet the demands of Mission India through
the planned completion of an NCC in 2025. For New Delhi, an
A&E contract for the GSO/Support Annex may be funded and
awarded before the end of FY 2009; good news for our Embassy
operations, which are currently reaching the limits of
capacity. The New Delhi American Center is undergoing a
limited infrastructure renovation to keep it operational as
OBO researches lease or construction options for a Model
American Center.


27. (SBU) We have requested that OBO undertake a formal
assessment of all USG property holdings in India. Given the
ever increasing cost of leased properties, and the number of
valuable properties the USG will be selling in-country in the
near future, we believe this is an optimal time to channel
some of these gains into residential real estate construction
which could decrease our dependence on leased properties.
Construction costs, even for quality construction, remain
relatively low, making for a quick payback on our investment.
ROEMER