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 02 NEW DELHI 001298 
 
SIPDIS 
 
E.O. 12958: DECL: 02/17/2015 
TAGS: PREL ETRD ECIN PK NP BG IN SAARC

SUBJECT: INDIA SAYS SAARC STILL ALIVE, SUMMIT HINGES ON  NEPAL/BANGLADESH ACTIONS 
  REF: A. NEW DELHI 1224 
 
     ¶B. NEW DELHI 826 
     ¶C. 04 NEW DELHI 7426 
  Classified By: PolCouns Geoff Pyatt.  Reasons 1.4 (B, D) 
 
¶1.  (C) Summary: In contrast with the predominant view in the  Indian media that by opting out of the Dhaka Summit, India  dealt a fatal blow to SAARC, the GOI told us it remains  committed to the organization.  MEA Joint Secretary (SAARC)  V. Ashok told PolCouns and Poloff on February 16 that he was  ""hopeful"" regarding the future of regional cooperation,  indicating that India would attend a rescheduled Summit,  provided Nepal and Bangladesh took steps to reverse the  political misdeeds that India cited in its cancellation  notice (ref B).  Ashok was equally upbeat about SAARC's  negotiations for a regional free trade area, SAFTA, even with  the question of most favored nation status from Pakistan  unresolved.  End Summary. 
  Prerequisites for a Summit 
-------------------------- 
 
¶2.  (C) Ashok recognized that India's decision to  unilaterally cancel the February 6-7 South Asia Association  for Regional Cooperation (SAARC) Summit had ""caused rumblings  among the neighbors,"" but explained that New Delhi had to  convey a firm message to Nepal in response to the King's  actions on January 31.  Ashok, who was already in Dhaka on  February 2 when the Foreign Secretary announced that PM Singh  would not attend, remembered having to inform the BDG as  having been ""slightly embarrassing.""  Describing the blast at  the hotel where the PM was to have stayed, the Joint  Secretary insisted there were legitimate security concerns 
  SIPDIS  about the Dhaka Summit.  In a more sober view of Bangladesh  than some of his MEA colleagues, Ashok empathized with the  effort the BDG has now taken twice to organize the Summit,  commenting that while Dhaka was ""initially miffed,"" they are  now talking about new dates.  But, without the appropriate  political atmosphere, SAARC cannot achieve any results, he  added. 
 
¶3.  (C) PolCouns underlined our interest in the scheduling of  an early SAARC Summit as a means to build confidence and  further regional integration.  SAARC ""awaits normalcy,"" Ashok  asserted in response.  When India sees positive signals from  both Bangladesh and Nepal on security and democracy, he  continued, ""we could see about restarting the SAARC process."" 
 The Joint Secretary noted that Nepal weighed more heavily in  the GOI decision to not go to Dhaka.  As far as making a  third attempt at the thirteenth Summit, Ashok said that he  would be happy to see the meeting happen in April or May  2005.  If it slips beyond then, he continued, is not  inconceivable that the Summit would be pushed into 2006, in  light of parliamentary, climatic (monsoon), and religious  (Ramadan) considerations from June to December. 
 
¶4.  (C) Reiterating what the Foreign Secretary said in his  February 2 announcement that the Prime Minister would not go  to Dhaka, Ashok insisted that India is committed to the  organization and that he was ""hopeful"" for its future. 
Confident in SAARC's potential, he underlined his previously  enunciated view that it is time for SAARC to move from  meetings and studies to projects, and highlighted for example  a regional HIV/AIDS program that will involve training  doctors and paramedics, along with mobile clinics and  awareness programs. 
 
¶5.  (C) Ashok conveyed a positive line on SAARC just days  after Foreign Secretary Shyam Saran in his February 14 speech  on India's South Asia policy slammed the organization for  having a ""hardly inspiring"" record, and being one in which  the members have a ""deep resistance to doing anything that  could be collaborative.""  Saran added that some members see  SAARC as ""a vehicle primarily to countervail India."" 
  SAFTA Not Yet Derailed 
---------------------- 
 
¶6.  (C) His enthusiasm for the South Asia Free Trade Area  (SAFTA) unfazed by neighborhood developments, Ashok was  nearly as upbeat about the prospects for trade negotiations  as he had been before the Summit's double postponement (ref  C).  His only concern was that the seventh ministerial  meeting scheduled for the end of February in Male would now  be held in March, which would also delay the eighth and final  meeting of negotiators. 
 
¶7.  (C) Even the potential sticking point of Pakistan's  hesitation in granting MFN status to India did not appear to  Ashok as insurmountable.  He was optimistic that if Pakistan  allowed India MFN (i.e., normal trade relations) status  through SAFTA, which the agreement would require, Islamabad  would also grant it bilaterally.  He confirmed that during  the sixth SAFTA meeting in December, the two discussed India  removing textiles from their negative list, if Pakistan did  so with chemicals.  While there is resistance to this move  among textile industry interests in India, Ashok thought  economic common sense would prevail, as it had with Sri Lanka  (ref A).  He cautioned, however, that if Pakistan and  Bangladesh prefer to remain ""with their heads in the sand,""  the other four SAARC members, who already enjoy fairly  liberalized trade, will proceed without Islamabad and Dhaka. 
MULFORD