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C O N F I D E N T I A L SECTION 01 OF 02 NEW DELHI 007005 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 10/09/2026 
TAGS: PREL PGOV PTER PINR PBTS MOPS KDEM NE IN
SUBJECT: HIGH STAKES FOR INDIA IN NEPAL 
 
 
Classified By: Charge Geoff Pyatt for Reasons 1.4 (B, D) 
 
¶1. (C) SUMMARY:  India's stakes in Nepal are high, yet, of 
all its neighbors, Nepal is the easiest to manage, according 
to MEA Americas Director Santosh Jha.  Jha said the Maoists 
are long on guns, but short on strategy.  They have created 
an "aura" of support, said Jha, but would be exposed in 
eventual elections, in which he expects they would win no 
more than 10-15% of the vote, if that.  It is difficult to 
predict what will happen if the peace process does not 
continue, he said, but he does not think Nepal is vulnerable 
to a military coup.  "If anyone has a stake in Nepal, it is 
India," according to Jha, who cited the Nepal-China border 
and Nepal's huge 80,000 MW hydropower potential as being of 
paramount interest to the GOI.  END SUMMARY. 
 
---------------------------------------- 
Nepal the "Easiest" of India's Neighbors 
---------------------------------------- 
 
¶2.  (C) Nepal is the easiest of India's neighbors to manage, 
MEA Americas Director Santosh Jha argued in an Oct. 9 meeting 
with SCA India, Nepal, Sri Lanka and Bhutan Director Marcia 
Bernicat and DepPolCouns.  Nepal is land-locked, its conflict 
is ideological vs. ethnic in nature, and its assets are 
concentrated, making the situation in  Nepal manageable (as 
opposed to that of Sri Lanka, for example).  Jha noted that 
the U.S. and India need to exercise concerted pressure on 
Nepal to continue the peace process, and offered that the GOI 
will give the political parties "all of the support they 
need." 
 
--------------------------------------------- 
The Maoists:  Long on Guns, Short on Strategy 
--------------------------------------------- 
 
¶3.  (C) Jha stated that he doesn't believe the Maoists will 
give up their arms for an expected 10-15% share of power (via 
the electoral process), noting that even that number may be 
an over-estimation.  Jha said that elections are not just a 
matter of guns, but of strategy.  The best combination is to 
have both, he said, but he is not convinced that the Maoists 
have a strategy.  They  should not be allowed to come into 
the political process all at once, according to Jha.   He 
noted that in geographically adjacent areas of India, the 
Maoists have not been able to win more than one or two seats 
in local elections.  The Maoists in Nepal have created an 
"aura of support," Jha said, but stand to be exposed in 
eventual elections. 
 
---------------------- 
Nepal's 4 Weak Pillars 
---------------------- 
 
¶4.  (C) When pressed by Bernicat about what would happen if 
the peace process is stalled, Jha stated that it is difficult 
to predict.  He said that we will know much more before the 
elections, and noted that international opinion is highly 
influential.  Asked by Bernicat what role he thought the 
military would play if the situation erupts into open 
conflict, Jha said that he did not think Nepal would 
experience a military coup as Thailand did.  The fact that 
the Nepalese National (formerly Royal) Army didn't directly 
fight the Maoists shows their lack of capability and will to 
take over.  He said the Nepalese already know the 
consequences of an overly powerful King, and that they 
wouldn't stand for a military government.  All of Nepal's 
four pillars - the Nepalese National Army, the King, the SPA 
and the Maoists - are weak, according to Jha.  This void has 
 
NEW DELHI 00007005  002 OF 002 
 
 
existed in Nepal for a long time, he said, and none of these 
"pillars" has been strong enough to fill it. 
 
--------------------------------------------- ------ 
China and Hydropower:  India's High Stakes in Nepal 
--------------------------------------------- ------ 
 
¶5.  (C) When asked to outline India's strategic interests in 
Nepal, Jha replied that Nepal's border with China affects 
India directly.  He noted that both the King and the 
political parties had "played that up" in the past, using it 
to their own advantage.  Nepal is of immense importance to 
India, Jha added, noting that Nepal is India's most closely 
culturally-linked neighbor.  "Nepal is more 'Indian' than any 
of our neighbors," and the Nepalese are keenly aware that 
they would be unable to cut off its southern border with 
India in favor of its northern neighbor. 
 
¶6.  (C) On the energy front, Jha observed that Nepal has 
80,000 megawatts in hydropower to offer India and profit 
from, but that the projects to unleash that power have never 
gotten off the ground. "If anyone has a stake in Nepal, it is 
India," he emphasized. 
 
--------------------------- 
COMMENT:  Where's the Beef? 
--------------------------- 
 
¶7.  (C) The GOI says it sees Nepal as a "big challenge" for 
the short-term, but continues to be optimistic about the 
long-term future of the country.  While the Nepal-China 
border is a concern for India, the government seems confident 
enough of its ties with Nepal and does not believe the 
current situation is particularly alarming.  Even its concern 
over Nepalese Maoist ties with Indian Maoists seems muted. 
India is clearly well-aware of the influence of the 
international community on the situation in Nepal, but uses 
its own influence only sparingly.  Given that peace in Nepal 
potentially translates to energy and security for India, and 
the GOI's own conviction that Nepal's situation is 
manageable, India will be motivated to press the Nepalese 
government and the Maoists to continue the peace process, but 
with a view that this goal is achievable only in the longer 
term.  END COMMENT. 
PYATT