INDIA-RUSSIA CIVILIAN NUCLEAR DEAL DOMINATES

C O N F I D E N T I A L SECTION 01 OF 03 NEW DELHI 002530

SENSITIVE
SIPDIS

DEPT FOR SCA/INS

E.O. 12958: DECL: 12/17/2019
TAGS: PGOV PREL IN
SUBJECT: INDIA-RUSSIA CIVILIAN NUCLEAR DEAL DOMINATES
ANNUAL SUMMIT

Classified By: Political Minister-Counselor Uzra Zeya for reasons 1.4 (
B,D)


1. (U) SUMMARY: During an annual India-Russia summit on
December 6-8 in Moscow, Prime Minister Singh and President
Medvedev inked six bilateral agreements that included a civil
nuclear deal and pacts focused on military relations,
cultural exchanges, and trade. The joint statement was warm
in tone and addressed cooperation on a broad range of global
issues. Indian media coverage of the visit and results was
glowing, as was the strategic community's reaction. The
Indo-Russian civil nuclear deal, which GOI and Russian
Embassy sources told us was initialed but not signed in
Moscow, was characterized by the media as "better" than the
U.S.-India Civil Nuclear Cooperation Agreement because it
guaranteed reprocessing rights and fuel supplies for the life
of the reactors. While Indian strategic and media pundits
celebrated the relationship and the nuclear deal, Russian
diplomats in New Delhi privately downplayed the hoopla as an
Indian effort to gain leverage with other partners, sharing
that their agreement was "no better" than the Indo-U.S.
agreement. END SUMMARY.

Meetings and Agreements
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2. (U) According to External Affairs Minister Krishna's
statement on the visit, President Medvedev hosted PM Singh
for dinner at his dacha and met with him the following day at
the Kremlin. That meeting was followed by delegation-level
talks. Singh also met with Prime Minister Putin. Together,
they addressed the India-Russia CEOs Council Meeting.


3. (U) The "Agreement on Cooperation in the Use of Atomic
Energy for Peaceful Purposes" allows four additional reactors
to be built in Kudankulum, Tamil Nadu. India also offered
Russia an additional reactor site in Haripur, West Bengal.
According to enthusiastic press reports and academic
contacts, the agreement "goes far beyond the U.S.-India 123
agreement" by including reprocessing rights that can not be
suspended for any reason, guaranteed fuel supplies for the
life of the reactors, and unspecified provisions for transfer
of enrichment and reprocessing technology. Foreign Secretary
Krishna in his statement to the media on the PM's visit
stated that the nuclear deal "includes provisions which are
in common with other agreements such as the application of
IAEA safeguards, retransfer mechanism, and non-interference
in our unsafeguarded programme" (Note: full text of Krishna's
statement available at http://meaindia.nic.in/). The other
bilateral agreements included three agreements on defense
cooperation: a Program for Military and Technical Cooperation
(MTC); an After Sales Support Agreement for Russian arms and
military equipment sold to India; and an agreement on
Cooperation in Development and Production of Multi-Role
Transport Aircraft. Also announced were a Program of
Cultural Exchanges and a Dollar Credit Line Agreement between
Russia's Vnesheconombank (Bank for Development and Foreign
Economic Affairs) and EXIM Bank of India that will finance
export of Indian equipment, technology, goods and services to
Russia.


4. (U) The joint statement underlined mutual support for
regional peace and stability, a common commitment to
verifiable elimination of nuclear weapons, and Russia's
support for India's full membership in the Shanghai
Cooperation Organization (SCO) and in the Asia-Pacific
Economic Cooperation (APEC). It highlighted the efficacy of
the multilateral formats of the Brazil-Russia-India-China
(BRIC) and Russia-India-China (RIC) formats in "strengthening
and balancing" the international system. Russia also called
India a "strong and deserving candidate" for a permanent seat
on the UNSC (Note: Full text of the joint statement available
at http://meaindia.nic.in/).

Positive Local Reaction

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5. (C) The Indo-Russian Civil Nuclear Agreement garnered most
of the headlines from the visit in the Indian press,
with stories sourced to the GOI claiming that the Russian
Agreement was much less restrictive than the U.S.-Indian
Civil Nuclear Cooperation Agreement. An Australian colleague
related to us that retired Indian Ambassadors Lalit Mansingh
and G. Parthasarthy told the Australians that "123 was good,
the French deal was better, but this is the
best." Indian MEA Deputy Secretary (Eurasia) for Russia
Nikhilesh Giri confirmed that the nuclear agreement had been
initialed but not signed during the Moscow summit. He would
not specify what procedures remained before the agreement
could be finalized, but emphasized that the language had been
agreed upon. Giri characterized the visit as very
substantive in terms of its nature and content and the
agreements produced. In EAM Krishna's December 16 statement
to the Parliament on the PM's visit, he declared that "it is
clear from the outcomes of the visit that the relationship
has indeed risen to a higher plane." Jawaharlal Nehru
Professor Sanjay Pandey told us that because of their
long-standing good relations, the GOI trusts Russia to uphold
its promise to supply fuel for the life of the reactors, even
under political pressure. As precedent, he cited Russia's
delivery, despite objections by the international community,
of cryogenic engines to India for use in space launches in
the late 1990's.

The Russian Perspective from Delhi
--------------

6. (C) The Russian Embassy's Political Counselor, Valeriy
Khodzhaev, told us that the Indians had gone out of their way
to hype the nuclear agreement in an attempt to gain leverage
with their other partners. Khodzhaev confirmed that the
agreement was not actually signed in Moscow, but was
initialed and that a signing would likely take place when
Prime Minister Putin visits India sometime in 2010. He would
not disclose which issues were outstanding. Khodzhaev
stressed that on transfers of enrichment and reprocessing
(ENR),Russia "would act in a manner strictly consistent with
its international obligations" and asserted that the Russian
agreement was "no better" than the U.S. agreement. An
article in the December 18 Hindu seems to support that view.
Sourced to Indian and Russian officials, the article provides
a detailed look at the final negotiations on the agreement,
and underlines the Russians made clear that a G-8 decision
limiting transfers of ENR technology to non-NPT states was a
limitation on Russian action. Khodzhaev was interested in
the status of liability legislation in the Indian Parliament
and confessed that he had not received guidance from Moscow
about whether liability protection was an issue for Russia's
RosAtom.


7. (C) Khodzhaev went on to complain about how difficult the
Indians had been as a negotiating partner, particularly on
military sales, but would not be drawn out on this issue. He
did note that the Russians were disappointed with the
assignment of an additional reactor site in politically
unstable West Bengal (Note: West Bengal has been dominated
for the past thirty years by the Communist Party, which now
faces a serious challenge from the regional Trinamool
Congress Party led by firebrand Railways Minister Mamata
Banerjee). Khodzhaev joked that the GOI must have assumed
that Russia among all the international partners would face
the fewest problems in the Communist Party dominated state,
but he expected serious difficulties in trying to acquire
land for a Russian reactor park, regardless of who was in
power. He said the GOR fully expected that party activists
of many stripes would try to extort money from the Russians
by rallying local people against the construction. He added
wistfully that the U.S. had been lucky to receive reactors
parks in Andhra Pradesh and Gujarat. This disappointment was
reflected in the Hindu article as well, which noted that
Nikolay Spasskiy, Deputy Head of Rosatom, was told it would

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not be safe to visit the West Bengal site because of the
likelihood of protests.


8. (C) COMMENT: In inevitable comparisons between the Russian
summit and PM Singh's earlier visit to Washington, at least
some Indian commentators are characterizing the Washington
visit as long on gesture and short on substance while
portraying the Russian visit as more than adequate on both
counts. The positive reaction toward Russia's civil nuclear
deal helps Russia stay in the spotlight as India's trusted
partner as it seeks to expand cooperation at Kudankulam,
though it does face an uphill climb in West Bengal. END
COMMENT.
ROEMER