VZCZCXRO4928
PP RUEHBI RUEHCI
DE RUEHCG #2607/01 3481002
ZNR UUUUU ZZH
P 141002Z DEC 06
FM AMCONSUL CHENNAI
TO RUEHC/SECSTATE WASHDC PRIORITY 0493
INFO RUEHNE/AMEMBASSY NEW DELHI PRIORITY 2129
RUEHCI/AMCONSUL CALCUTTA 0661
RUEHBI/AMCONSUL MUMBAI 4921

UNCLAS SECTION 01 OF 04 CHENNAI 002607 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PGOV AMGT ABLD CMGT ECON KISL IN
SUBJECT: U/S BURNS IN HYDERABAD: A NEW CONSULATE, MORE 
VISAS AND LIMITLESS GROWTH 
 
¶1. (SBU) Summary: A busy series of December 9 meetings and a 
wide-ranging &windshield tour8 provided Under Secretary for 
Political Affairs Nicholas Burns a quick but thorough 
introduction to one of India,s leading boom towns and the 
planned site for the fifth U.S. post in India.  While hi-tech 
driven economic growth, Indo-U.S. relations, and the new 
consulate dominated most of Burns, interactions, a 
discussion with leading members of Hyderabad,s Muslim 
community revealed a city still steeped in its largely Muslim 
heritage and allowed him to respond to a community suspicious 
of U.S. actions and goals.  End summary. 
 
The New Economy: U.S. Company, Business School 
--------------------------------------------- - 
 
¶2. (U) A tour and briefing at the offices of U.S. company 
Computer Associates (CA), located in Hyderabad,s &Hi-Tech 
City,8 provided Ambassador Burns and his delegation with 
insights into a fairly typical American IT company experience 
in India.  Started in 1997, CA India now has operations in 
six Indian cities, including its India Technology Center 
(ITC) in Hyderabad, established in 2003.  With the ITC and 
its now 1,400  employees, CA has moved beyond providing 
technical support and software development from India to also 
doing new product and process development.  This step is 
common for foreign companies, many of whom started in India 
with &back office8 operations, but have added more complex, 
higher value processes.  From the roof of the building where 
CA currently leases space, Ambassador Burns could see offices 
of a &who,s-who8 of American and other IT companies, as 
well as large-scale construction in every direction.  CA 
itself plans to establish its own office campus in the 
rapidly developing &Cyberabad8 area where Microsoft already 
has its largest operation outside of its Redmond, Washington 
headquarters. 
 
¶3. (U) Asked how many of CA,s 1,400 Hyderabad-based 
employees would need U.S. visas, site manager Joga Ryali, a 
U.S. citizen who recently returned to his native India after 
22 years in Silicon Valley, said most of the employees will 
need to go to the U.S. for training or customer meetings.  He 
expressed gratitude for the recent improvements in visa 
processing at Chennai (the nearest visa processing post, 
Chennai is almost 400 miles and an overnight trip away), and 
he welcomed the prospect of even speedier and more convenient 
service from a U.S. consulate in Hyderabad.  As evidence of 
the growing demand for visas, Ryali and his colleagues noted 
that one of every four IT professionals in Silicon Valley is 
from India and that one of every four of those Indians hails 
from the state of Andhra Pradesh.  They also pointed out that 
on the heels of the past year,s 78% growth in IT exports 
from Andhra Pradesh, a further 51% is expected in the coming 
year. 
 
¶4. (U) Ambassador Burns, subsequent visit to the Indian 
School of Business (ISB), located adjacent to the Microsoft 
facility, told the tale of India,s economic boom from a 
different perspective.  Established in 2001 in collaboration 
with the Kellogg School of Management, The Wharton School and 
the London Business School, and totally privately funded, ISB 
seeks to meet the need for a world-class business school in 
Asia.  President Bush visited ISB during his March visit for 
his roundtable with young Indian entrepreneurs, and Indian 
Prime Minister Singh had attended ISB,s fifth anniversary 
celebration just a few days prior to Ambassador Burns, 
visit.  ISB currently has 418 students from all across India. 
 
¶5. (U) Speaking to students during ISB,s annual business 
plan competition, Ambassador Burns, termed India the current 
&it8 country in the U.S., and he noted the emerging 
partnership between the U.S. and India as symbolized by the 
just-approved civil nuclear agreement, the boom in trade and 
investment, the number of Indian students in the U.S., the 
highly successful Indian-American community, and the 
popularity of Indian popular culture.  Ambassador Burns also 
noted the Mission,s efforts to expedite U.S. visa processing 
and the plans for a consulate in Hyderabad.  During an 
off-the-record Q and A session, Ambassador Burns responded to 
questions about the civil nuclear agreement, U.S. aid for 
development, and the free flow of human capital.  Asked about 
the prospects for Indian membership on the U.N Security 
Council, Ambassador Burns said that regional representation, 
effectiveness and a country,s ability to contribute will be 
important criteria for Security Council expansion. 
 
Political Leaders Endorse Indo-U.S. Ties 
---------------------------------------- 
 
¶6. (SBU) Meetings with Andhra Pradesh (AP) Congress Party 
 
CHENNAI 00002607  002 OF 004 
 
 
President K. Kesava Rao and former AP Chief Minister and 
current state opposition leader N. Chandrababu Naidu provided 
Ambassador Burns with political perspective.  Rao, who also 
is a member of the upper house of India,s Parliament, said 
good Indo-U.S. relations enjoy &nation-wide, people-based8 
approval among the Indian population as well as &general 
support8 in the Parliament.  The new Hyderabad consulate is 
&the best thing the U.S. has done,8 commented Rao, who 
fondly reminisced about Hyderabad's American Library (since 
closed) where he spent many happy afternoons as a student. 
Rao also promised to help finalize all pending paperwork 
between AP and Delhi for the permanent consulate site.  Rao 
noted that investment in AP has increased eight-fold in the 
past 30 months, and he touted Special Economic Zones (SEZ) 
and public-private partnerships as ways to move forward. 
Asked about the controversy over agrarian lands being taken 
for SEZs, Rao said the government is working on guidelines to 
ensure valuable agricultural property is not taken.  He added 
that the Congress government has worked hard on rural 
outreach to address poverty and to ease the Naxalite threat. 
Responding to a question about foreign university interest in 
India, Rao said there &still are issues,8 and that adequate 
regulation must be in place before foreign institutions are 
allowed to open campuses in India. 
 
¶7. (SBU) Ambassador Burns told Rao that Indo-U.S. relations 
have never been stronger, noting successes on the civil 
nuclear agreement, trade development, and military 
cooperation.  He added that the U.S. believes more needs to 
be done with India on counter-terrorism and agriculture.  Rao 
agreed that stronger bilateral relations should be the goal, 
adding that the majority of Indians support the UPA 
coalition,s &line8 on improved ties with the U.S.  On the 
civil nuclear agreement, Rao noted that a &few 
technicalities8 remain to be resolved, but news of it,s 
passage by the U.S. Congress was &overwhelming.8 
Ambassador Burns rejoined that any issues can be overcome and 
that the good negotiations on the civil nuclear agreement had 
built confidence between the two governments. 
 
¶8. (SBU) Chandrababu Naidu, former Chief Minister of AP and 
acknowledged architect of Hyderabad,s economic take-off, 
opened by asking Ambassador Burns for his views on India. 
Burns replied that he is not an expert on India, but he could 
speak to Indo-U.S. relations, saying that the bilateral 
relationship is set to be one of our most important.  He 
added that the civil nuclear agreement had become the symbol 
of the emerging relationship and &now it is done.8  Naidu 
agreed that relations are good, adding that he is &very 
pleased8 in that regard.  He said India is very strong on 
the technology front, but it needs to concentrate more on 
infrastructure.  He continued that now the important question 
for India is how to take the benefits of the country,s 
economic reforms to the common man, adding that &trickle 
down,8 while occurring, may not be fast enough.  Naidu said 
&all (political) parties talk this line; the question is 
implementation.8  Two things about India are certain, Naidu 
said: coalition governments at the Center and economic 
growth.  &All agree8 that growth must continue.  Naidu 
commented that a decade ago Andhra Pradesh produced only 
8,000 engineering and computer sciences graduates a year, and 
many left for the U.S.  Now, he said, the annual number is 
100,000, resulting, ironically, in a &brain gain.8  Most 
importantly, the psychology of those graduates has been 
transformed into a 
&can do8 culture that has helped India recover its national 
pride and its sense that challenges can be met.  Naidu said 
with satisfaction that Hyderabad had won its friendly rivalry 
with Bangalore, besting it in every dimension, including 
roads, airports, education, biotech, and governance. 
 
¶9. (SBU) Moving to the international scene, Naidu asked 
Ambassador Burns if he &prefers8 India or China.  Common 
values make the U.S. and India natural partners, Ambassador 
Burns replied, adding that the U.S. is concerned about 
China,s military build-up.  He explained that the world has 
changed, and that it would be foolish to think we can contain 
China as we once did the Soviet Union.  The new Indo-U.S. 
relationship shows China that it has an incentive to 
cooperate, Ambassador Burns concluded.  Naidu said the 
Iran-Iraq situation is the &world,s biggest problem,8 to 
which Ambassador Burns rejoined that Iran is the more 
worrisome.  Iran,s radical government, its belief that it 
will be the region,s greatest power, and its potential to 
block an Israel-Palestine solution all are very serious 
concerns.  Iran with nuclear weapons would be unacceptable to 
the U.S., Ambassador Burns concluded.  Bidding farewell, 
Ambassador Burns invited Naidu to visit the State Department 
the next time he travels to the U.S. 
 
CHENNAI 00002607  003 OF 004 
 
 
 
Muslim Leaders Air Views 
------------------------ 
 
¶10. (U) The 120-year old Nizam Club, a sharp contrast to 
modern, hi-tech Hyderabad, was the venue for Ambassador 
Burns, lunch and roundtable discussion with leaders from the 
large Muslim community (about 40% of the city,s population). 
 Hosted by Zaheed Ali Khan, chief editor of The Siasat 
newspaper, a moderate, widely read Urdu daily, roundtable 
guests included an AP government minister, academics from 
secular and religious educational institutions, and a former 
AP Chief Justice, among others.  Although virtually all of 
the participants have ties to the U.S. through family, 
education or travel and all professed positive attitudes 
about the country, they were not reticent in expressing 
varying degrees of unhappiness about U.S. policies in the 
Muslim world.  Although the pointed but respectful questions 
included topics such as Guantanamo detainees and Iraq, the 
questioners, strongest points concerned Israel-Palestine. 
One questioner,s comment that Palestine is &the central 
issue to lift the hearts of Muslims around the world8 
brought applause from several of the participants. 
Acknowledging the importance of progress on Palestine and the 
disaffection caused by Iraq, Ambassador Burns said the U.S. 
is proud of what it has done and is doing to support and 
assist Muslims, such as in the Bosnia conflict and elsewhere. 
 
 
¶11. (U) Roundtable participants clearly appreciated the 
opportunity to meet and talk with Ambassador Burns. 
Subsequently, one academic wrote to Consulate General 
Chennai, 
&Ambassador Burns, special gesture of taking time out to 
meet Muslims from Hyderabad and ascertain their views about 
American policies is a welcome one and demonstrates 
unequivocally the intentions of the U.S. government to reach 
out to sections of the international community which are 
ostensibly  unhappy, with American policies.  It is a 
gesture I as an Indian and a Muslim appreciate 
wholeheartedly.8 
 
Consulate Sites: The New Frontier 
--------------------------------- 
 
¶12. (U) Ambassador Burns also briefly toured the agreed upon 
site for an interim U.S. consulate in Hyderabad, the &Paigah 
Palace8 heritage compound that currently houses AP 
government offices.  The AP government protocol and heritage 
officials who conducted the tour clearly were delighted by 
the prospect of a U.S. consulate in their city and the 
planned use of the site.  Enroute to the Indian School of 
Business Ambassador Burns also was driven by the proposed 
site for construction of a purpose-built consulate building, 
located near the mammoth Microsoft campus and the new 
headquarters for Computer Associates, Hyderabad presence. 
Ambassador Burns also spoke to TV channel ETV, which 
broadcasts in all of south India,s vernacular languages, 
about the new consulate, noting that it is one manifestation 
of the U.S. government,s commitment to the bilateral 
relationship.  (Presently, Iran is the only country with a 
consulate in Hyderabad.) 
 
Comment: Opportunities Await 
---------------------------- 
 
¶13. (SBU) Hyderabadis were delighted that Ambassador Burns, 
the U.S. &star8 of the civil nuclear negotiations and a 
very familiar face from media coverage of that process, chose 
to visit their city.  They expressed unanimous support for 
the agreement, they proudly touted the growth and development 
of their booming city, and they showed great enthusiasm for 
the prospect of a U.S. consulate.  Indeed, Ambassador Burns, 
visit encapsulated the need for a consulate and  some of the 
challenges it will face in Hyderabad ) a city of seven 
million with close ties to the U.S. and a booming economy, 
thus generating an enormous demand for U.S. visa services. 
Also apparent are the opportunities for American companies to 
take advantage of the growing economy, including its energy 
needs, and the scope for outreach and public diplomacy, 
especially with the city,s large Muslim community.  End 
comment. 
 
¶14. (U) For his Hyderabad visit Ambassador Burns was 
accompanied by SCA/INS Director Marcia Bernicat, P Special 
Assistant Anja Manuel, Embassy New Delhi Political Officer 
Atul Keshap, and Chennai Principal Officer David Hopper. 
This message was coordinated with Embassy New Delhi and 
cleared by P. 
 
CHENNAI 00002607  004 OF 004 
 
 
HOPPER