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 001113 
 
SIPDIS 
 
E.O. 12958: DECL: 02/10/2015 
TAGS: PREL PGOV PTER IN PK INDO PAK

SUBJECT: NATWAR SINGH TO RESTART INDO-PAK DIALOGUE IN  ISLAMABAD 
  REF: A. NEW DELHI 909 
     ¶B. NEW DELHI 586 
     ¶C. 04 NEW DELHI 7494 
  Classified By: DCM Robert O. Blake, Jr. for Reasons 1.4 (B, D) 
 
¶1.  (C) Summary: FM Natwar Singh's February 15-17 trip to  Islamabad will be an opportunity for the two governments to  re-engage at a high level after a hiatus of nearly two  months, during which the most important bilateral stories --  Islamabad's request for World Bank assistance to resolve the  Baglihar Dam impasse and the January LOC shelling incidents 
-- were largely negative, and when even the Pakistani cricket  team's much-heralded February 25-April 18 tour of India has  run into political hiccups.  For New Delhi, Pakistan has  taken a back seat to other regional crises in the past month:  the Tsunami, Nepal, the SAARC summit postponement, and  resulting tensions with Bangladesh.  Although Mission  contacts expect no major breakthroughs from Natwar's visit,  they are upbeat about the resumption of high-level dialogue,  given the opportunities the two sides lost to engage in Dhaka  and the interregnum of the back-channel after NSA JN Dixit's  death.  In addition to setting dates for Composite Dialogue  (CD) and technical meetings through the summer, the Foreign  Minister will likely take up concessions the GOI has made  regarding the proposed Iran-Pakistan-India gas pipeline.  We  also continue to hear rumors of an accord on the  Srinagar-Muzaffarabad bus.  End Summary. 
  Overcoming Recent Setbacks on LOC, Baglihar 
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¶2.  (C) Natwar Singh's February 15-17 trip to Islamabad --  the first senior bilateral interaction since the December  27-28 Foreign Secretaries meeting -- will occur after several  setbacks in the Indo-Pak relationship.  Islamabad's request  to the World Bank for a neutral arbiter to resolve the  Baglihar Dam impasse (Ref A) and the January 18 and 20  cross-LOC shelling incidents (Ref B) have receded into the  background, but in the absence of the vigorous diplomatic  activity of last fall, these negative episodes have  introduced a note of pessimism into the commentary here on  the Indo-Pak relationship. 
 
¶3.  (C) Now that the GOP has initiated the dispute resolution  process to address the Baglihar Dam impasse, Mission contacts  agree that New Delhi and Islamabad should let the process  play itself out.  Former Director of the Observer Research  Foundation's (ORF) Pakistan Centre Sushant Sareen explained  that Baglihar could be addressed on its technical aspects,  unlike the majority of bilateral issues that would require  political compromise to resolve.  Commodore Uday Bhaskar,  Deputy Director of the MOD-affiliated Institute for Defense  Studies and Analysis, agreed with this perspective, as did  International Centre for Peace Initiatives Director Karan  Sawhny. 
 
¶4.  (C) Senior GOI officials seem willing to continue to give  Islamabad the benefit of the doubt regarding the recent  shelling incidents.  ORF Senior Pakistan Fellow Wilson John,  usually a hawk on Musharraf, speculated to Poloff that the  shelling was probably not an ""official"" act, but more likely  the work of ""spoilers"" carried out either by Kashmir-focused  terrorists or by low-ranking officers of the Pakistan Army  acting unilaterally.  IDSA's Bhaskar added that India could  ""absorb"" such incidents ""to a point,"" and at the current time  the GOI valued the peace process far more than retaliation. 
 
¶5.  (C) It is reflective of the current Indo-Pak malaise that  even the much-awaited India tour of the Pakistani cricket  team has become bogged down in wrangling over one of the  proposed match sites, with Islamabad objecting to playing in  Ahmedabad for ""security reasons,"" which has been read here as  a slap at the 2002 communal violence in Gujarat.  Indian  observers expect the tour to go on, but the politicization of  South Asia's most popular sport -- which last year played  such an important role in fomenting mutual goodwill -- has  cast a small shadow over the generally upbeat atmosphere  around Indo-Pak people-to-people ties. 
  Opportunity for the GOI to Refocus on Pakistan 
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¶6.  (C) Natwar's trip comes after the GOI has directed much  of its foreign policy focus elsewhere for the past several  weeks.  Several regional crises -- the December Tsunami and  its aftermath, the constitutional coup in Nepal, the  deteriorating security situation in Bangladesh, and the GOI  decision to pull the plug on the SAARC summit -- have  diverted attention away from Pakistan.  ORF's Wilson John  joked to Poloff that, ""For once, the border with Pakistan is  among India's least concerns.""  An MEA Joint Secretary echoed  this perspective, quipping that India's deteriorating  relations elsewhere in South Asia have made Indo-Pak issues  look good.  It took only days for the LOC shelling incidents  and the Baglihar Dam impasse to disappear from India's major  daily newspapers.  Against this background, Natwar's  high-profile trip is expected to generate the momentum needed  to begin the next round of CD talks. 
  Prospect for Manmohan Trip in March 
----------------------------------- 
 
¶7.  (C) One agenda item certain to be on the Islamabad agenda  will be the GOP's invitation to PM Manmohan Singh to visit  Pakistan in March.  Coming on the heels of Natwar's trip, and  given the positive read-out of PM Singh's meeting with  Pakistani PM Shaukat Aziz in November (Ref C), we expect a PM  Singh visit would be well received in both countries.  That  being said, our MEA interlocutors have carefully stuck to a  ""one step at a time"" approach to their bilateral engagements,  and have not committed either way on the PM's travel.  The  outcome of ongoing state elections and the status of economic  reform efforts in the budget session of Parliament could be a  factor here. 
  Clearing the Way for Pipeline Discussions 
----------------------------------------- 
 
¶8.  (C) The Indian Cabinet on February 9 authorized Petroleum  Minister Mani Shankar Aiyar to pursue energy deals with  Burma, Bangladesh, Iran and Pakistan.  This announcement  represents a GOI climb-down from the MEA's prior insistence  on Pakistan extending MFN to India and/or providing transit  rights for Indian trade to Afghanistan as a prerequisite to  the pipeline.  In a short conversation looking ahead to  Natwar's trip, MEA Joint Secretary (Pakistan, Afghanistan,  Iran) Arun K. Singh indicated to PolCouns that this pipeline  breakthrough would be a deliverable for the Foreign  Minister's trip to Islamabad.  On February 11, Petroleum  Minister Mani Shankar Aiyar told the Ambassador that an  agreement was ""not going to happen easily, quickly, or  smoothly.""  The Energy and Resources Institute's (TERI) RK  Batra indicated to us that numerous pipeline issues remain,  including financing, physical protection, and possible ILSA  restrictions. 
  Future of Composite and Technical Talks 
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¶9.  (C) Natwar's trip should yield a schedule for this  Spring's round of bilateral talks, although it would be too  soon to expect an announcement of an accord on any of the  Composite Dialogue agenda items (Wullar Barrage, Siachen  Glacier, Promotion of Friendly Exchanges, Terrorism and Drug  Trafficking, Sir Creek, and Confidence Building Measures in  Jammu and Kashmir) or the bilateral technical talks (nuclear  CBMs, conventional military CBMs, and the Khokhrapar-Munnabao  rail link).  One major issue that may be ripe for a  breakthrough is the Srinagar-Muzaffarabad bus route. 
 
¶10.  (C) J/S Singh told us on February 10 that negotiations  are continuing, and remarked that ""we're close but not quite  there.""  Veteran journalist and Track-Two practitioner Kuldip  Nayyar was convinced the bus service would begin within the  year.  Likewise, the ""Hindustan Times's"" Pramit Pal Chaudhuri  told us that MEA sources have been promising ""something big""  for the Natwar trip, and suggested that the bus was it. 
International Centre for Peace Initiatives Director Karan  Sawhny suggested that even incremental movement in any  bilateral discussions would be critical, to ensure that  Islamabad continued to find value in ongoing engagement.  A  more detailed examination of Indian predictions for Indo-Pak  relations in 2005 follows septel. 
  Next Up: Trade Talks 
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  ¶11.  (C) In the next scheduled major bilateral interaction,  New Delhi will host expert-level trade talks on February 22. 
There are a host of bilateral trade issues, including  normalizing the trade flows that now transit third-countries,  intellectual copyright issues, and preparations for the South  Asia Free Trade Area that is to begin next year.  Further  details on this event will be addressed septel. 
  Comment 
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  ¶12.  (C) Several recent opportunities have passed for Indian  and Pakistani officials to interact since the Foreign  Secretaries met last December, including the postponed SAARC 
  SIPDIS  summit, and much of the news in the meantime has been  unhelpful to the peace process.  If Natwar's trip takes place  as scheduled and both capitals see it as successful, that  could herald another 6-9 months of diplomatic engagement  which would be as important as the continued LOC cease-fire  and possible further reduction in Kashmir-oriented terrorism. 
 The fact that his trip is being heralded as ""the first  bilateral visit of an Indian Foreign Minister to Pakistan in  17 years"" demonstrates the difficulty the Indian media has in  accurately describing so-called milestones in Indo-Pak  diplomacy, given last year's hectic calendar of meetings. 
However, the run-up to Natwar's trip is demonstrating the  new, positive dynamic of Indo-Pak relations, with each senior  level encounter creating pressure on the bureaucracy to  generate deliverables of some sort -- and that in turn  helping to ratchet the two sides further away from conflict. 
MULFORD