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DE RUEHNE #1974/01 0811218
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O 221218Z MAR 06
FM AMEMBASSY NEW DELHI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1618
INFO RUCNIRA/IRAN COLLECTIVE
RUCNISL/ISLAMIC COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1039
RUEHLM/AMEMBASSY COLOMBO 4225
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RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RHEHNSC/NSC WASHDC
RUEIDN/DNI WASHINGTON DC
RHHMUNA/CDR USPACOM HONOLULU HI
RUCNDT/USMISSION USUN NEW YORK 9780
RHMFISS/HQ USCENTCOM MACDILL AFB FL
RUEHGV/USMISSION GENEVA 2013
RHHMUNA/HQ USPACOM HONOLULU HI
RHMFISS/HQ USSOCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC

C O N F I D E N T I A L SECTION 01 OF 02 NEW DELHI 001974 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 03/21/2016 
TAGS: POV ETRD PGOV PREL TSPA MASS TRGY EPET ENRG
IN, RS 
SUBJECT: RUSSIAN PM,S VISIT UNLIKELY TO REVIVE DECLINING 
INDO-RUSSIAN TIES 
 
REF: 2005 NEW DELHI 9133 
 
NEW DELHI 00001974  001.2 OF 002 
 
 
Classified By: DCM Robert Blake, Jr. for Reasons 1.4 (B, D) 
 
Subject: Russian PM's Visit Unlikely to Revive Declining 
Indo-Russian Ties 
 
¶1.  (C) Summary: Russian Premier Mikhail Fradkov's visit to 
New Delhi (March 16-17) was intended to reinvigorate the 
declining India/Russia relationship, but there is little 
indication that the visit broadened Indo-Russian relations or 
injected much forward momentum.  The delegation included the 
head of the Russian Federal Space Agency and leading 
businessmen, and met with Prime Minister Singh, President 
Kalam, and representatives of India's key business groups, 
CII, FICCI, and Assocham.  Although the two sides signed 
seven agreements, on civil space cooperation, enurgy, trade, 
banking, and commerce, the discussions were overshadowed by 
global press coverage of Moscow's sale to New Delhi of low 
enriched uranium to fuel the safeguarded reactors at its 
Tarapur nuclear power plant.   The array of agreements 
included nothing on defense.  End Summary. 
 
It's About History, Trust 
------------------------- 
 
¶2.  (SBU) Jawaharlal Nehru University Professor Gulshan 
Sachdeva told Poloff on March 21 that the timing of Prime 
Minister Fradkov's visit was not coincidental, coming so 
closely on the heels of the POTUS visit.  Dr. Sachdeva 
maintained that the visit was about "reassuring each other 
that the (bilateral) relationship is intact," despite all 
practical indications that it has been on the decline for 
years.  He opined that there is a sense among a broad swath 
of Indians that, when India needed something, the Soviet 
Union, and then Russia, was there, and this nostalgic 
attitude, held by leftists, civil society and the masses 
alike, continues to inform the GOI's stance.  In Sachdeva's 
view, the GOI must not only reassure Moscow, but also its own 
domestic constituency, that it is not dropping Russia for the 
USA. 
 
Reassuring Agreements 
--------------------- 
 
¶3.  (SBU) The various economic agreements signed by the two 
sides included a new credit line for trade between the EXIM 
Bank of India and Russia's Vneshtorg Bank and an MOU on 
cooperation on energy infrastructure projects between the 
Indian Oil Corporation and Russia's Stroytransgaz.  Two of 
India's top business groups, CII and FICCI, also concluded 
agreements with counterpart groups in Russia, as did India's 
privately-run ICICI bank (Comment:  In our view, the 
agreements were meant to reassure both Indians and Russians 
concerned about the decline in the bilateral relations, but 
are unlikely to stem the decline.  End comment).  The 
official Ministry of External Affairs press comments 
announced the intention to raise bilateral trade to USD 10 
billion in five years, a decrease from the USD 14 billion 
figure that New Delhi proposed just last December (REF 2005 
NEW DELHI 9133).  Meanwhile, total trade was less than USD 2 
billion in FY 2004-05.  Dr. Sachdeva suggested that the 
 
NEW DELHI 00001974  002.2 OF 002 
 
 
rationale behind these agreements from the Indian side is 
"why not?"  In his view, the UPA government has nothing to 
lose by concluding these agreements and could gain in terms 
of public opinion, and its relationship with the Left Front, 
even if it fails to inject momentum into its ties with Russia. 
 
Continued Cooperation in Energy, Space 
-------------------------------------- 
 
¶4.  (SBU) While New Delhi and Moscow are winding down 
relations in a number of areas, mutual efforts in energy and 
space are continuing unabated.   Russia's improperly 
sequenced provision of low enriched uranium to India's 
Tarapur I and II safeguarded reactors, pursued under the 
Nuclear Suppliers Group's safety exception but not briefed to 
the NSG beforehand, received significant press coverage, 
particularly in the context of the U.S.-India civil nuclear 
cooperation initiative.  The two agreements on space 
cooperation, allowing India to launch GLONASS-M navigational 
satellites, and joint development of GLONASS-K navigational 
satellites, were largely concluded during Prime Minister 
Singh's visit to Russia in December. 
 
Comment: Upholding the Image of a Tried and Tested Friend 
--------------------------------------------- ------------ 
 
¶5.  (C) Comment: GOI efforts to sustain strong ties with 
Russia will have little impact on the bilateral relationship, 
as much of what once bound the allies has moved out of 
government control into the private sector.  This is 
particularly true of economic ties, as India's private sector 
is not particularly interested in working in Russia.  Even in 
areas that are still significant, namely defense purchases, 
Moscow is losing ground.  The GOI now holds amounts of hard 
currency that were unimaginable in the heyday of Indo-Soviet 
relations, is diversifying its sources of imports, and 
increasingly is seeking out top quality.  One reflection of 
the dearth of deliverables for Fradkov's visit was that the 
Russians felt the need to bypass the NSG in announcing the 
Tarapur fuel sale.  While politically expedient for the 
visit, this transfer may pose longer term problems for India 
as the U.S. Congress and NSG consider the proposed civil 
nuclear agreement.  Despite the obvious downturn in 
Indo-Russian relations, Indian officials will stick to the 
historical image of the relationship, finding Russia a useful 
balance in the region and ally in its quest for global power, 
particularly given its invitation for India to attend the G-8 
Summit in St. Petersburg in July. 
 
¶6.  (U) Visit New Delhi's Classified Website: 
(http://www.state.sgov.gov/p/sa/newdelhi/) 
MULFORD