VZCZCXRO8487
RR RUEHBI RUEHCI
DE RUEHNE #0768/01 0460918
ZNR UUUUU ZZH
R 150918Z FEB 07
FM AMEMBASSY NEW DELHI
TO RUEHC/SECSTATE WASHDC 3057
RUCPDOC/USDOC WASHDC
INFO RUEHIL/AMEMBASSY ISLAMABAD 2062
RUEHCG/AMCONSUL CHENNAI 8887
RUEHKP/AMCONSUL KARACHI 6800
RUEHCI/AMCONSUL KOLKATA 8608
RUEHBI/AMCONSUL MUMBAI 8062
RUEKJCS/SECDEF WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC
RHEHAAA/WHITE HOUSE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEHNSC/NSC WASHDC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC

UNCLAS SECTION 01 OF 03 NEW DELHI 000768 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
SCA/PPD FOR KVANDEVATE 
ECA FOR DAS TFARELL 
ECA/A/E FOR JE SEDLINS AND LKUYUMCU 
STATE PASS USTR 
 
E.O. 12958: N/A 
TAGS: AF BEXP EAGR ECON EFIN ETRD IN KPAO MASS PK
PREL, PTER, SCUL, SENV, TPHY 
SUBJECT: PM TELLS SECRETARY GUTIERREZ U.S.-INDIA RELATION 
"LIKE NO OTHER" 
 
 
 ¶1.  (SBU)  SUMMARY.  Commerce Secretary Carlos Gutierrez met 
Indian Prime Minister Manmohan Singh February 14.  The two 
agreed to explore means to strengthen cooperation in science 
and technology, clean energy and education, and with regards 
to education, the Secretary mentioned his initiatives and the 
P.M. expressed his desire to resolve lingering problems that 
U.S. academics are having obtaining GOI research clearances. 
Singh stressed that his vision of a globalizing India 
included a "pragmatic and principled" partnership with the 
U.S., and spoke at some length about the challenges he faces 
trying to extend the benefits of impressive economic growth 
to India's 600 million rural poor.  He cautiously predicted 
that maintaining current growth rates should be possible 
provided the GOI does not "mess up" the balance of payments 
situation or allow inflation to run out of control.  The P.M. 
underlined his commitment to peace with Pakistan, but flagged 
terrorism from "the neighborhood" as an impediment.  END 
SUMMARY. 
 
--------------------------------------------- ------ 
SINGH:  INDO-U.S. TIES LIKE "NO OTHER RELATIONSHIP" 
--------------------------------------------- ------ 
 
¶2.  (SBU)  Indian Prime Minister Manmohan Singh opened his 
February 14 meeting with Commerce Secretary Gutierrez by 
labeling Indo-U.S. links as strong and multi-faceted.  He 
described the relationship as a partnership based on 
pragmatism and principle, like no other India has with other 
nations.  Sec. Gutierrez agreed, and described growing ties 
as one the most important future developments in the world. 
Singh said, given the role the U.S. plays in international 
fora and international business, the bilateral partnership is 
key to globalization, as well as critical to India's own 
development.  Gutierrez noted how final 2006 trade figures 
just out show bilateral trade climbing to 32 billion dollars, 
and he emphasized President Bush's commitment to double total 
trade in three years. 
 
--------------------------------------------- -- 
GUTIERREZ:  SHOULD ALSO EXTEND TO DEFENSE TRADE 
--------------------------------------------- -- 
 
¶3.  (SBU) Sec. Gutierrez said he hoped the trade would extend 
to new deals for the U.S. defense industry.  Singh said that 
the GOI wanted to diversify its defense purchases to acquire 
the best possible materials and equipment.  He said that U.S. 
industry can look forward to getting its share of defense 
contracts in the coming years.  Singh also predicted strong 
growth and opportunities for U.S. firms in the aircraft and 
aviation fields. 
 
--------------------------------- 
P.M.:  "WOULD LIKE TO MOVE FASTER 
TO LIBERALIZE FINANCIAL SECTOR" 
--------------------------------- 
 
¶4.  (SBU)  Asked to give his views on the reform process, 
Singh said that politically speaking, there were no serious 
opponents to reform from either the right or the left.  Even 
the Communists, who ruled three states, were led by economic 
reformers in West Bengal.  Singh said he would like to move 
faster to liberalize the financial sector, but on that score 
the left is still presenting obstacles.  He said there still 
is a lingering "fear of the unknown" in India, and many 
"cautious reformers."  He admitted that even he did not 
understand all the complexities of some new financial 
instruments.  Still, Singh was fairly confident that growth 
would continue, as long as the GOI did not "mess up" the 
balance of payments or allow inflation to spiral out of 
control. 
 
¶5.  (SBU)  Singh cited the "awesome responsibility" he feels 
leading a country of one billion people.  Because the bulk of 
 
NEW DELHI 00000768  002 OF 003 
 
 
the population and work force did not enjoy enough 
protection, he felt he needed to tread slowly on reforms, 
saying, "Things might be different if we had safety nets." 
This insecurity is part of the problem of modernizing any 
developing country.  Over 600 million Indians depend on small 
scale farming on land holdings averaging between 1 and 1.5 
hectares.  Their lives are so precarious that "when God 
fails, disaster and misery ensue."  Indian cities could not 
withstand mass migrations of rural populations, and the 
challenge to India is to develop the rural economy "around 
but not in" agriculture.  India did not aspire to U.S. 
standards of living, Singh said, "and if we did, that might 
be harmful to the environment."  He said that if he managed 
to somehow soften the edges of extreme poverty before his 
death, then he would think his efforts would have been a 
success. When Secretary Gutierrez cited the wisdom with which 
Singh was opening the retail sector, Singh defended his 
prudent approach.  He said that while services represent over 
50 per cent of India's GOP, the bulk of those working in 
services come from small scale enterprises, characterized by 
low productivity and disguised unemployment.  Moving too 
quickly to modernize retail risked social upheaval. 
 
--------------------------------------------- ------------ 
APPLIED SCIENCE KEY TO ECONOMIC GROWTH, CLEAN ENVIRONMENT 
--------------------------------------------- ------------ 
 
¶6.  (SBU)  Secretary Gutierrez recounted his Feb. 13 meeting 
with Technology Minister Sibal, during which the two 
discussed the possible creation of an S and T group with 
public/private involvement.  Such an entity could receive 
inputs from the CEO Forum with a view towards commercializing 
technological research.  Singh said the proposal would, 
"have my blesssing," and he cited how much India's Green 
Revolution depended on U.S. inputs, particularly from 
venerated Professor Norman Borlaug.  Such research in the 
60's and 70's had largely come from the public sector, but 
now S and T research is largely privately financed.  The key 
to future cooperation would be how to disseminate new 
technologies at reasonable cost to lift people out of 
poverty.  Secretary Gutierrez pledged to work to identify 
funding for such a project.  He noted USDOC's intention to 
bring a clean technology trade mission to India in April. 
Again the P.M. responded enthusiastically and indicated a 
desire to work together with the U.S. on climate change. 
Singh said he espoused the precautionary principle on climate 
change questions, and he noted that land and water 
degradation in India was already having a major impact on 
millions of subsistence farmers. 
 
--------------------------------------------- ----- 
DESIRE TO UNBLOCK STALLED U.S. RESEARCH APPLICATIONS 
--------------------------------------------- ----- 
 
¶7.  (SBU)  When Secretary Gutierrez added that USDOC also 
wanted to find ways to cooperate with India in the field of 
education in order to increase people to people ties, and 
mentioned the DOC educational marketing initiative, Singh 
noted recent controversy over the poor treatment of American 
scholars in India, who have been faced with numerous hurdles 
in having their research proposals approved by the GOI.  He 
said he had "flagged" the issue to his staff, and he labeled 
current GOI inaction as a "product of past thinking."  He 
noted that in the 1960's Peace Corps Volunteers had provided 
the mainstay of Indo-U.S. people to people contacts, but when 
that program ended after the Bangladesh War, responsibility 
for promoting people to people ties had been picked up almost 
exclusively by American scholars.  Times now had changed; 
almost all middle class Indians now have a close friend or 
family member living in the U.S., and Americans of Indian 
origin are now an "economic force to be reckoned with." 
 
--------------------------------------------- -- 
 
NEW DELHI 00000768  003 OF 003 
 
 
PAKISTAN:  GRADUAL EFFORTS TO IMPROVE RELATIONS 
--------------------------------------------- -- 
 
¶8.  (SBU)  During their meeting, Gutierrez and Singh also 
briefly discussed Indo-Pakistan relations.  Singh said he is 
trying to improve bilateral ties, but because of terrorism 
attacks, which detract from his ability to move forward, 
progress is not always easy.  The Indian public response to 
terrorist attacks in Mumbai and elsewhere is revulsion, and 
unfortunately, the epicenter of terrorism is "in the 
neighborhood."  Nevertheless, he and President Musharraf had 
both decided to work jointly to investigate terrorist attacks 
and improve relations.  Singh also said India remains 
strongly committed to help Afghanistan, and to that end has 
provided over 750 million dollars in development assistance 
in the field of health, education, road-building, hydro power 
and electricity transmission. 
 
¶9.  (U)  Meeting participants who joined Secretary Gutierrez 
were Ambassador Mulford, USDOC U/S Lavin, and Economic 
Counselor Davison (notetaker).  Joining P.M. Singh were 
Ministry of Finance Secretary Ashok Jha, Financial Sector 
Secretary Vinod Rai, Commerce Secretary G.K. Pillai, and 
 
SIPDIS 
Industry Secretary Ajay Dua. 
 
¶10.  (U)  Secretary Guitierrez' party has cleared this cable. 
MULFORD