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FM AMEMBASSY NEW DELHI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1418
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RUEIDN/DNI WASHINGTON DC
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RUEKJCS/JOINT STAFF WASHDC

C O N F I D E N T I A L SECTION 01 OF 02 NEW DELHI 001850 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 03/18/2016 
TAGS: PREL ENRG ETRD PTER EINV PBTS IN BD
SUBJECT: GOI HOPING FOR POSITIVE BANGLADESH PM VISIT 
DESPITE SECURITY WORRIES 
 
REF: A. DHAKA 1159 
     ¶B. DHAKA 1053 
 
NEW DELHI 00001850  001.2 OF 002 
 
 
Classified By: POLCOUNS GEOFF PYATT, for Reasons 1.4 (B, D) 
 
¶1.  (C) Summary: Bangladesh Prime Minister Zia's March 20-23 
visit to New Delhi, reciprocating Prime Minister Singh's 
visit to Dhaka in November 2005, reflects in large part 
Singh's sustained efforts and desire to ease long-standing 
bilateral tensions.  Zia is expected to attend a ceremonial 
reception hosted by President Kalam and a banquet hosted by 
Singh on March 20, so it is clear that the GOI is rolling out 
the red carpet to try to put historically difficult relations 
on a better footing.  The Indian media has reported that 
Sonia Gandhi and unnamed Cabinet ministers will also call on 
Zia.  The agenda is expected to cover economic ties, 
including trade, investment protection, double taxation, and 
water (but not natural gas), yet New Delhi's underlying 
concern undoubtedly is security, to include the rise of 
terrorism in Bangladesh, border security, and growing 
evidence of terrorists in India using Bangladesh for 
logistical support.  End Summary. 
 
GOI Hopes Dialogue Will Improve Economic Ties 
--------------------------------------------- 
 
¶2.  (U) Against the background of a still testy relationship, 
the GOI has worked to manage expectations of this visit, and 
results will likely be limited to dialogue.  India's High 
Commissioner to Dhaka Veena Sikri told reporters on 13 March 
that Zia's visit to New Delhi is an opportunity to start a 
"constant engagement in dialogue," which she said was the 
only way to resolve the longstanding tensions that have 
plagued bilateral trade, in which India had a $1.5 billion 
trade surplus in FY2004-05, and investment discussions.  New 
Delhi is expected to seek improved cross-border access for 
trade, its top bilateral economic priority, and use of 
Chittagong port for goods shipments, and Dhaka will be 
looking for lower barriers to its exports to India.  New 
Delhi is also looking to engage Dhaka on a bilateral free 
trade agreement (FTA).  On the investment front, the Indian 
business community has been pressing for an 
investment-protection treaty, the importance of which was 
most recently highlighted by the Tata's halting efforts to 
establish a $2.5 billion steel project in Bangladesh. 
However, Sikri noted that there is "no scope" for discussions 
on a tri-nation pipeline that would allow India to import 
natural gas from Burma. 
 
Putting a Positive Spin On Water Sharing 
---------------------------------------- 
 
¶3.  (C) Sikri indicated that India seeks to move ahead on 
water agreements, saying that India looked forward to 
resolving sharing issues in a spirit similar to the Ganges 
Water Sharing Treaty and helping Bangladesh with water 
management and siltation.  Her comments reflect a broadly 
held desire in New Delhi to break free of petty regional 
disputes and broadcast a reputation as a magnanimous regional 
power.  This is particularly striking given that Dhaka has 
repeatedly pressed New Delhi to address alleged inequities in 
the Ganges Water Sharing Treaty, and that China recently 
signed an agreement with Bangladesh to provide "real-time 
data" on the water flow of the Brahmaputra River to help 
forecast floods. 
 
NEW DELHI 00001850  002.2 OF 002 
 
 
 
Despite High Profile Arrests, Security Concerns Remain 
--------------------------------------------- --------- 
 
¶4.  (C) India expects that Begum Zia will tout her country's 
high profile arrests of senior Jammatul Mujahedin Bangladesh 
(JMB) leader Siddiqul Islam a.k.a Bangla Bhai (Ref A) and JMB 
operations chief Sheikh Abdur Rahman (Ref B), but Delhi-based 
terrorism expert Ajai Sahni discounted the early March 
arrests as evidence of a significant policy change by Dhaka. 
"We must wait to see how these arrests proceed, if there is a 
real trial, how sentencing is carried out," he added.  Sahni 
pointed to Islamabad's tradition of arresting terrorist 
leaders and cadres en masse, only to release them days or 
weeks later, as an explanation for his cautious reply; he 
also suggested that, to gain credibility, Dhaka would have 
not only to arrest terrorist leaders, but also uproot their 
organizations and infrastructure. Sahni's concerns echo 
official comments, including those of MEA spokesman Navtej 
Sarna, who stated, "Dhaka needs to respond to Indian 
sensitivities regarding terror and insurgent groups operating 
from its territory, as well as illegal migration." Even 
Sikri, despite her efforts to accentuate the positive, told 
reporters that an extradition treaty is critical to progress 
on the security front.  With widely reported evidence in the 
Varanasi bombings pointing to possible Bangladeshi 
involvement, security clearly tops India's agenda, even if it 
will not admit publicly to such fears. 
 
Comment: A Fresh Start 
---------------------- 
 
¶5.  (C) Comment: The extent to which Prime Minister Zia's 
visit to New Delhi truly ushers in a new era of positive 
bilateral ties will depend in large part on the Indian side 
on New Delhi's ability to balance its positive spin against 
its very real security concerns, and on the Bangladeshi side, 
on Dhaka's intention to engage meaningfully across the board. 
 Sikri's comments in particular hint at the difficulty New 
Delhi, at least, will face in managing its part of the talks, 
as it will likely be forced to publicly gloss over 
long-standing difficulties, such as natural gas imports, in 
order to get the positive story the Prime Minister seeks.  We 
will continue to engage the Indian MEA during and after this 
visit, underlining our shared stake in helping Bangladesh to 
surmount its recent difficulties. 
 
¶6.  (U) Visit New Delhi's Classified Website: 
(http://www.state.sgov.gov/p/sa/newdelhi/) 
BLAKE