This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 03 NEW DELHI 007512 
 
SIPDIS 
 
E.O. 12958: DECL: 11/15/2014 
TAGS: PREL PTER KNNP KIPR MASS IN PK IR

SUBJECT: SENATOR BAYH'S MEETINGS IN NEW DELHI, NOVEMBER 
23-24, 2004 
 
 
Classified By: Charge Robert O. Blake, Reasons 1.4 (B,D). 
 
¶1. (C) Summary:  In a series of senior level GOI meetings on  November 23-24 during a private visit to India, Senator Evan  Bayh (D-Indiana) heard a strong Indian commitment to move  ahead with our bilateral partnership, coupled with concern  about the potential disruptive effect of US F-16 sales to  Pakistan.  Citing India's ""impeccable"" record of preventing  onward proliferation, Foreign Secretary Saran advised that  the US needs to bear in mind our shared interest in stopping  the spread of WMD and to clarify whether India is part of the  problem or the solution.  NSA Dixit made a similar point,  urging America not to look at India as another Libya or Iraq,  but as a democracy and responsible nuclear power.  Dixit  characterized the ""theology"" of non-proliferation as the only  difference between our two countries.  Echoing points made  during his recent visit to Washington, Saran also flagged the  Indian need to expand the use of clean nuclear energy, and  sought flexibility on civilian nuclear supplies.  Senator  Bayh praised the progress in Indo-U.S. relations on many  fronts, but noted that U.S. intelligence experts would like  to deepen operational cooperation.  The Senator also made a  strong pitch for enhanced IPR protection.  End Summary. 
  F.M. NATWAR SINGH 
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¶2. (C) Indo-US Relations: After welcoming Senator Bayh,  Foreign Minister Singh hailed the good momentum in Indo-Pak  relations.  Infiltration rates from Pakistan have dropped,  partly due to the winter weather and defensive steps taken by  India, but also because the GOP has made ""some"" effort.  On  Indo-U.S. relations Singh laughingly apologized to the  Senator and said India was glad President Bush had won  re-election.  He praised the President's vision for Indo-U.S.  relations and said they have been moving forward since day  one of the Bush presidency.  He recalled with satisfaction  that the President had told the PM in September that India  would be one of the first countries he visits if re-elected. 
The FM predicted Indo-U.S. relations will continue to  improve.  But he told the Senator he wanted to flag one  concern.  He predicted any sale of F-16s to Pakistan would be  a ""fly in the ointment of Indo-U.S. relations"".  The key  point for India is that F-16s can be  fitted with nuclear weapons. 
 
¶3.  (C) NRIs:  Singh praised the success of non-resident  Indians in the United States.  He recounted how Indian steel  tycoon Lakhsmi Mittal is now the largest steel magnate in the  world.  Senator Bayh responded that Indiana manufactures more  steel than any state in America, and that Mittal owns four of  the state's five steel mills. 
 
¶4.  (C) No Clash of Civilizations: In response to a question  from Senator Bayh about radical Islam, the FM noted proudly  that India had proved Sam Huntington's Clash of Civilizations  theory wrong.  India's Islam differed substantially from the  Islam of Saudi Arabia or Indonesia.  Although India has the  second largest population of Muslims, not a single one had  joined Al-Qaida or the Taliban.  The Minister noted with  concern, however, that the Madrassah ""movement"" is catching  fire, so the issue of radical Islam affects all of us,  including the United States where Islam is the fastest  growing religion. Senator Bayh concluded by expressing his  hope that the United States and India can work to enhance our  long term mutual strategic interests, which he said are many. 
  F.S. SHYAM SARAN 
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¶5. (C)  Indo-US Relations:  Saran welcomed the Senator by  noting that he had just returned from a productive visit in  the United States, during which he had been pleased to see  SecState designate Rice and enjoyed good meetings of the  working groups on High Technology Cooperation (HTCG) and the  Next Steps in Strategic Partnership (NSSP). He expressed his  satisfaction with the higher than expected turnout of  American and Indian business to the HTCG private sector  meeting, which he characterized as ""on track"" to get tangible  results.  Overall, he thought there is a strong commitment on  both sides to carry  relations forward.  Now that landmarks  like NSSP Phase 1 have been achieved, both sides need to make  important decisions and turn words into action.  Given that  India has had an ""impeccable"" record on proliferation and  given our shared interest in stopping the spread of WMD, the  US needs to clarify whether India is part of the problem or  part of the solution.  Another challenge for India is to  maintain economic growth rates of 7 to 8 percent per annum,  for which its energy needs will be enormous.  Given  constraints on conventional energy supplies and the global  need to ensure environmental and climate sustainability,  India has no choice but to resort to greater use of clean  nuclear energy.  This could be an area for closer economic  cooperation between the United States and India and the FS  expressed hope that India's US partners could be flexible. 
The FS also recounted the potential for technology  cooperation and co-production in the areas of information,  defense, and bio-technology. 
 
¶6. (C) IPR: Senator Bayh noted that India's emphasis on  innovation would require a strong IPR regime, which would  find favor among potential US business partners.  Saran  confirmed that many IT contracts already include IPR  provisions and India was working on more comprehensive  legislation that would be in place before the January 1, 2005  deadline. He elaborated that India is one of the few  developing countries where services contribute 50% of GDP,  underlining the importance of IPR to Indian companies. 
 
¶7. (C) Indo-Pak Relations:  In response to Senator Bayh's  question about Pakistan PM Aziz's visit, Saran began by  noting while infiltration attempts had stopped, this was more  due to Indian efforts to beef up the border fencing in key  areas, improve its surveillance technology, and winter  weather.  He said Pakistan had cracked down on some of the  Jihadi groups inside Pakistan in part to satisfy American  requests, in part because several had turned against  Musharraf.  He cautioned, however, that the LET is still  active, has no restraints imposed on them, and are ""more or  less in the arms of ISI.""  The FS also noted India's concern  that the infrastructure to support cross border infiltration  remains.  Nonetheless, India remains committed to take the  peace process with Pakistan forward, according to Saran.  He  reviewed PM Singh's recent visit to Kashmir and his reduction  in the number of troops there which had played well in  Pakistan, despite Musharraf's dismissal of the action as a  ""cosmetic"" measure.  He expressed hope that India's action  would help create ""a virtuous cycle"" in Indo-Pak relations. 
In response to the Senator's question about the internal  situation in Pakistan, Saran said Pakistan should have faith  in its people and that democracy was worth fostering to  strengthen the fight against the Taliban and Jihadis. 
  NSA J.N. DIXIT 
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¶8. (C) Indo-US Relations: Dixit characterized Indo-US  relations as on the right track. On the economic and  technological side, he said India accepts that it must  address U.S. concerns and provide the necessary incentives  for U.S. businesses to come to India.  But India needs the  U.S. to trust India a little more.  He urged America not to  look at India as another Libya or Iraq, but as a democracy  and responsible nuclear power.  Senator Bayh praised the  progress in Indo-U.S. relations on many fronts, but noted  that deeper operational intelligence cooperation would be  desirable.  Dixit acknowledged that operational cooperation  is ""not there yet,"" but he predicted great potential for such  cooperation as the campaign against terror and organized  crime proceeds, and as the need for greater maritime security  cooperation grows.  He pledged that as long as the current  Congress government is in place, it will work toward greater  cooperation with the U.S. in these areas.  He told the  Senator that the FBI and CIA already have good interaction  with their Indian counterparts and expressed appreciation for  recent CIA information and security advice regarding  potential security threats to the PM during his trip to  Kashmir.  He observed there is no conflict between U.S. and  India in any field; the only difference is in the ""theology""  of nonproliferation. Senator Bayh saw India's rise as an  economic and strategic power as inevitable and said U.S.  wants to help India emerge as a great and responsible world  power, and in helping to resolve the Kashmir problem.  Dixit  responded that the U.S. has a role as a friend and  facilitator and that the U.S. has emerged as a high priority  in India's foreign, economic and security policies. 
 
¶9. (C) Iran: Dixit took the opportunity to urge that the  United States not pursue too punitive a policy with Iran as  that would only strengthen hard-liners there.  Recalling his  visit to Tehran in October, Dixit recounted that the Iranian  President and Foreign Minister had told him Iran will sign  additional safeguard agreements if deliberations continue  within the IAEA.  However, if the matter is referred to the  UN Security Council, Iran may  reject all cooperation with the IAEA.  The NSA averred that  the international community should not be blackmailed, but  does need to encourage the forces of reason and moderation in  Iran.  Senator Bayh responded that there is strong bipartisan  support for sanctions against Iran and skepticism that Iran  is not seeking nuclear weapons. 
 
¶10. (U) Senator Bayh's staff cleared this cable. 
BLAKE