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C O N F I D E N T I A L SECTION 01 OF 03 MANILA 002601 
 
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STATE FOR D, AND EAP 
 
E.O. 12958: DECL: 08/08/2027 
TAGS: ASEAN ETRD PREL PARM TSRL KNNP ETTC ENRG TRGY
AF, IR, PK, IN, RP 
SUBJECT: THE DEPUTY SECRETARY'S MEETING WITH INDIAN EAM 
PRANAB MUKHERJEE 
 
 
MANILA 00002601  001.2 OF 003 
 
 
Classified By: Deputy Secretary Negroponte, reasons 1.4 c, d 
 
¶1.  (C)  Summary:  The U.S.-India relationship has entered a 
"new stage" in the post-123 Agreement era, Deputy Secretary 
Negroponte and Indian External Affairs Minister (EAM) Pranab 
Mukherjee agreed in an August 1 meeting on the sidelines of 
the ASEAN Ministerial in Manila.  Addressing Indian concerns 
about support for the U.S.-India nuclear deal in Congress, 
the Deputy Secretary reaffirmed U.S. commitment to work with 
Congress to bring the deal to a conclusion, hopefully by the 
end of this year.  He emphasized our desire to continue our 
dialogue with India on a broad range of issues, but cautioned 
against "conducting business as usual" with Iran, 
particularly on the proposed Iran-Pakistan-India gas 
pipeline.  Mukherjee expressed concern over Iran, comparing 
it to a bomb that would either detonate or be diffused, and 
suggested that international engagement, especially through 
the IAEA, would be the best way to proceed.  We need an 
"out-of-the-box solution" to the problem of Iran, he 
emphasized.  End Summary. 
 
BEYOND THE NUCLEAR DEAL 
----------------------- 
 
¶2.  (C) Welcoming the post-123 Agreement era as a "new stage" 
in the U.S.-India relationship, Indian External Affairs 
Minister Pranab Mukherjee expressed gratitude to the U.S. for 
taking "extra care and responsibility" in shepherding the 
deal, in an August 1 meeting with Deputy Secretary Negroponte 
on the sidelines of the ASEAN Ministerial.  The Deputy 
Secretary responded that the U.S. looks forward to continuing 
 
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our dialogue with India on many subjects, and noted that the 
nuclear agreement is just one indication of the positive 
direction in which the relationship in moving. 
 
¶3.  (C)  Mukherjee expressed some concern about how the 
nuclear deal would fare in Congress, asking the Deputy 
Secretary whether there would be a "stiffening of positions" 
 
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in light of the upcoming U.S. presidential elections.  He 
asked what steps the USG planned to take in order to maintain 
bipartisan support for the deal in Congress during an 
election year. 
 
¶4.  (C)  The Deputy Secretary emphasized that India has "the 
full support" of the President, Secretary and entire 
Executive Branch.  "I assure you that we will work with 
Congress to get this done," he reiterated, noting the nuclear 
deal would not come before Congress until India had reached 
an agreement with the Nuclear Suppliers Group (NSG) for an 
"India exception," and with the IAEA on nuclear reprocessing 
safeguards.  Once India reaches an agreement with the NSG and 
IAEA it will be easier to make the case to Congress, he said, 
adding that we hope this is concluded by the end of this 
year. 
 
¶5.  (C)  Mukherjee welcomed U.S. assistance, observing that 
since the NSG is a large group, there will likely be "a 
divergence of opinions."  India is eager to ensure that the 
guidelines are amended so that the "complete benefit" of the 
nuclear deal can be achieved, he said. 
 
IRAN: "NO PROGRESS" ON GAS PIPELINE 
------------------------------------- 
 
¶6.  (C)  Cautioning Mukherjee that "there will be attention" 
on India's relationship with Iran, the Deputy Secretary noted 
that the proposed Iran-Pakistan-India gas pipeline would be a 
"problematic factor in U.S. policy." 
 
MANILA 00002601  002.2 OF 003 
 
 
 
¶7.  (C)  Responding to these concerns, Mukherjee downplayed 
plans for the pipeline, stating that "apart from discussions 
about the price of gas that would come through the pipeline, 
there has been no other progress."  There are "lots of stages 
to overcome" before the pipeline becomes a reality, he 
emphasized, musing that "no one knows what the final outcome 
will be." 
 
¶8.  (C) Mukherjee explained that Iran had quoted a price at 
which they would be willing to sell gas at the 
Pakistan-Afghanistan border.  India's understanding was that 
Pakistan would then add a fee to cover the transit over its 
territory, based on 'normal business considerations,' he 
said.  India then learned that Pakistan planned to levy 
additional charges on top of the cost of transit.  Mukherjee 
reiterated that India was only considering the prices 
proposed by Iran and Pakistan and had not yet agreed to 
anything.  "A group of experts" is currently examining the 
pricing issue, and exploring possible funding arrangements 
with international financial institutions should the project 
move forward, he stated. 
 
¶9.  (C) Responding to these remarks, the Deputy Secretary 
again cautioned India on "business as usual with Iran," 
describing Tehran as an "across-the-board adversary in the 
Middle East."  An emboldened Iran has moved ahead with 
nuclear enrichment in violation of their international 
commitments under the NPT and Security Council resolutions, 
he continued.  They are doing everything to frustrate the 
possibility of Middle East peace, supporting extremist groups 
in Lebanon, Gaza, and Afghanistan, and it would be through 
this lens that Congress would view India's relations with 
Iran. 
 
¶10.  (C)  Describing Iran's behavior as a "source of 
concern," Mukherjee noted that India has "made it 
abundantly clear" that Tehran must uphold its obligations 
under the NPT.  India is not a signatory to the NPT but has 
voluntarily accepted some of the NPT obligations, he stated, 
reiterating that India has "no quarrel" with the objectives 
of non-proliferation.  He added that India has urged Tehran 
to comply with Security Council resolutions as well, but "we 
have not been able to soften their attitude."  He said he had 
also raised New Delhi's concerns with his counterparts at the 
Asia Europe Meeting (ASEM) in Hamburg in May 2007, while at 
home, India's relationship with Iran has been a subject of 
debate in Parliament.  Highlighting India's strategic 
interests in Iran's neighborhood, Mukherjee stated that 
two-thirds of India's petroleum requirement comes from Iran, 
that "we have civilizational ties with them," and that 4.5 
million Indians live in the Middle East, making peace and 
stability in the region a matter of importance. 
 
IAEA "APROPRIATE AUTHORITY" TO ENGAGE IRAN 
------------------------------------------ 
 
¶11.  (C)  Comparing Iran to a bomb, Mukherjee observed that 
"an explosive state cannot remain forever -- it either needs 
to be defused, or there is a danger that it will explode at 
any moment."  So far, no one has been able to find a way to 
move forward, he said, arguing that there is "no question of 
finding a resolution through bilateral or trilateral 
discussions." He emphasized that we must think collectively 
about how to avoid a crisis with Iran and identified the IAEA 
as the appropriate authority to engage Iran on its 
obligations, and as the best forum for these issues to be 
discussed.  Mukherjee stated that we need an out-of-the-box 
 
MANILA 00002601  003.2 OF 003 
 
 
solution from the international community to address issues 
of global concern, like Iran as well as securing the Malacca 
Strait.  These issues are best resolved collectively, he 
said, adding that some countries may give advice while others 
must take tough positions. 
 
AFGHANISTAN 
------------ 
 
¶12.  (C)  Mukherjee expressed concern over the activities of 
the Taliban in Afghanistan, stating that Taliban actions have 
disrupted India's various humanitarian projects there. 
Recalling the 2005 kidnapping and murder of three Indian 
contractors working on a portion of the Zaranj-Delaram road, 
and the recent deaths of South Korean hostages, he noted that 
the Taliban is not sparing anyone.  Mukherjee also 
highlighted Indian activities in Afghanistan, underlining 
India's construction of two roads, the Parliament building, 
and a transmission line, as well as distribution of enriched 
biscuits to over 1 million children.  India's financial 
contribution to the reconstruction of Afghanistan totals more 
than USD 750 million, he reported.  Finally, Mukherjee noted 
with concern the apparent rise in terrorism in the region 
since 9/11, both in Afghanistan and in Pakistan.  Since the 
recent Red Mosque operation, Pakistan has seen a suicide bomb 
attack nearly every day, he said. 
 
¶13.  (U) August 1, 2007; 1000-1030; Manila, Philippines. 
 
¶14.  (U)  Meeting Participants: 
 
U.S. 
Deputy Secretary of State John Negroponte 
Kaye Lee, Special Assistant to the Deputy Secretary 
Ted Wittenstein, Special Assistant to the Deputy Secretary 
Siriana Nair, Notetaker 
 
INDIA 
External Affairs Minister Pranab Mukherjee 
¶N. Ravi, Secretary (East) 
K C Singh, Additional Secretary (IO) 
Rajeet Mitter, Ambassador to the Philippines 
Biren Nanda, Joint Secretary (South) 
Vikram Misri, Director (EAMO) 
Pradeep Gupta, Minister's Office 
Tsewang Namgyal, Notetaker 
 
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KENNEY