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RUCNNSG/NUCLEAR SUPPLIERS GROUP COLLECTIVE
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RUEHUNV/USMISSION UNVIE VIENNA 1364
RUCNDT/USMISSION USUN NEW YORK 5834

UNCLAS SECTION 01 OF 03 NEW DELHI 005392 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PARM TSPL KNNP ETTC ENRG TRGY IN IR AF
SUBJECT: INDIAN OBSERVERS (MOSTLY) THINK NUCLEAR DEAL WILL 
GO THROUGH DESPITE GUJARAT LOSS 
 
¶1. (SBU) Summary: Gathered at a December 26 roundtable, 
politicians and journalists largely agreed that the UPA 
government will still complete the nuclear deal despite the 
Congress Party's overwhelming loss in the Gujarat state 
elections, but differed on the process and reasoning.  Member 
of Parliament (MP) Dinesh Trivedi expected a decisive moment 
in January 2008, but Raashid Alvi, an MP from the Congress 
Party, expected the government to continue stalling if 
nothing happened in January.  Harish Khare of the Hindu 
outlined a timetable in which the Congress Party would 
challenge the Left in March 2008 to take the deal or leave 
it, prompting the Left to withdraw and early elections in 
October 2008.  While some observers, such as Pankaj Vohra of 
the Hindustan Times, thought the Gujarat election had little 
implications for national politics, others like Saba Bhaumik 
of Outlook Magazine warned that the Congress Party may not 
have such an easy time in upcoming state elections in 
Rajasthan and Madhya Pradesh.  End Summary. 
 
Nuclear Deal Will (Probably) Still Go Through 
- - - 
 
¶2. (SBU) Politicians and journalists gathered for a December 
26 roundtable largely agreed that the UPA government will 
conclude the nuclear deal in 2008.  "The government needs a 
big idea before the next election so that it could show that 
it will stand up to the Left," offered Pioneer correspondent 
Ashok Malik.  Saba Naqvi Bhaumik, Outlook Magazine Bureau 
Chief, agreed, noting that without the nuclear deal "the 
Congress Party is not clear on anything."  "The deal will go 
through by addressing the Left concerns to some degree," 
stated Hindustan Times Political Editor Pankaj Vohra.  Harish 
Khare, Senior Associate Editor of The Hindu, outlined a 
scenario in which the Congress Party introduced a populist 
budget in Parliament at the end of February, and then told 
the Left to "take it or shove it," at which point the Left 
would withdraw support, prompting elections in October. 
"It's shocking we're in agreement," Malik quipped.  Most of 
the analysts agreed generally with this scenario -- a budget 
with something in it for everyone, a confrontation with the 
Left, and elections in Fall 2008. 
 
¶3. (SBU) Member of Parliament (MP) Dinesh Trivedi opined that 
the government will make some sort of statement in the next 
three weeks which would force early elections to take 
advantage of a Left still debilitated by the Nandigram 
incident.  Trivedi predicted that the Left could lose around 
25 seats in West Bengal, where his Trinamool Congress Party 
competes with the Communist Party of India (Marxist) (CPM). 
Congress Party MP Raashid Alvi, however, warned that if 
nothing happened by the end of January, the nuclear deal 
could languish.  Alvi reiterated the Congress Party's 
commitment to complete the nuclear initiative through a 
"midway" process with the Left, but he also warned that 
building consensus between the UPA and Left could take longer 
than the U.S. would like.  Of all ten participants, only Alvi 
believed that the UPA would last the full term. 
 
Gujarat Result Does Not Reflect the Deal 
- - - 
 
¶4. (SBU) Most of the commentators recognized that voters in 
Gujarat made their choice based on the development priorities 
of Chief Minister Narendra Modi, and as a result, the BJP 
victory does not reflect how Indians feel about the nuclear 
issue.  In fact, noted Trivedi, "if anyone wanted a nuclear 
deal, it would have been the Gujaratis who have strong 
connections with the U.S."  Swapan Dasgupta, who followed the 
Gujarat elections for the BJP-oriented The Pioneer, related 
that Modi never discussed the nuclear deal.  "He would not be 
adverse to it," Dasgupta guessed, but cautioned that the 2005 
rejection of a U.S. visa for Modi made any mention about the 
nuclear deal by Modi fraught with politics. 
 
National Elections Could Compel the Congress to Push the Deal 
Through 
- - - 
 
¶5. (SBU) Once the Congress Party focuses on the next national 
elections, Bhaumik predicted that it would want to retain 
urban, middle-class voters it stole from the BJP in the 2004 
elections by finishing the nuclear initiative.  Dasgupta 
 
NEW DELHI 00005392  002 OF 003 
 
 
pointed out that the next election will be the first 
conducted according to the 2000 census, which shifted the 
balance of Parliament seats to urban areas, making the cities 
even more important.  Strong relations with the U.S. enjoy 
overwhelming support in the urban middle-class which has 
grown politically significant, Dasgupta continued.  But 
Bhaumik countered that the urban poor care little about 
foreign policy. 
 
The Allies Still Have the Power To Stall 
- - - 
 
¶6. (SBU) Asked how the Gujarat election impacts the UPA 
allies, most agreed that they will do everything possible not 
to let the government fall.  "The Congress Party is isolated 
in government," observed Malik.  However, Alvi reminded that 
all the UPA allies pronounced their support for the nuclear 
deal during the winter session of Parliament.  Vohra 
countered that they had also supported the 123 Agreement as 
members of the Cabinet Committee, but equivocated in October 
when it looked like the government might collapse. 
 
Congress: What Does it Stand For? 
- - - 
 
¶7.  (SBU) Rajiv Desai, who is reportedly close to the 
Congress Party's leadership, was scathing in his criticism of 
the Congress Party's performance in Gujarat.  He felt it was 
a "comprehensive rejection" of the party's policies and 
electoral agenda and strategy.  According to him, voters in 
Gujarat (and elsewhere in the country) are questioning 
whether the Congress stands for anything.  He felt that the 
party needs to show some backbone in its dealing with the 
Left, its UPA allies and its opponents like Narendra Modi if 
it is to make a comeback.  He contrasted the Congress 
Party,s floundering on message and waffling on the US-India 
civil nuclear agreement to the firm, consistent and 
uncompromising stand Modi took on the election issues. 
 
 
BJP: Boost in the Near Term 
- - - 
 
¶8.  (SBU) Dasgupta believes that the Gujarat election results 
would be a strong morale booster for the BJP in the short 
term, but whether the momentum would continue into the 
national elections depends on the timing of the elections and 
whether other developments in the interim weaken the 
resonance from the Gujarat elections.  Most of the analysts 
see a clear BJP victory in Himachal Pradesh, where election 
results are due on December 28.  They expect a strong BJP 
performance in Karnataka, where the state assembly was 
dissolved in November and are in the February-March 
timeframe.  After that, however, the going starts getting 
tough for the BJP.  It stands to lose ground in Madhya 
Pradesh, Rajasthan and Chhattisgarh, where elections are due 
in 2008.  Poor BJP performance in these states may dull some 
of the shine off the Gujarat victory.  Bhaumik, however, 
warned that the Congress Party may not have such an easy time 
in upcoming state elections in Rajasthan and Madhya Pradesh. 
 
Comment: Gujarat Means Everything and Nothing for the Deal 
- - - 
 
¶9. (SBU) The lively discussion, during which simultaneous 
arguments and debates broke out at opposite ends of the table 
at several times, hides the fact that the participants 
surprisingly agreed that the government would finish the deal 
sooner -- as in 2008 -- rather than later.  More worrisome, 
however, is that Congress MP Raashid Alvi expressed the 
gravest doubts that the deal would get done, while Congress 
insider Rajiv Desai expressed deep frustration with the 
Congress Party's clumsy politics.  Still, the journalists, 
whether affiliated with the BJP or Congress Party, all 
thought that the Congress Party would jettison the Left at 
some point in the first quarter of 2008 and finish the 
nuclear initiative. 
 
¶10. (SBU) Despite the commentators' optimism, post remains 
somewhat skeptical that the Congress Party has more guts now 
than before the Gujarat election.  With Left leaders 
continuing to assert their anti-U.S., anti-nuclear stance in 
 
NEW DELHI 00005392  003 OF 003 
 
 
the press, we doubt that the Gujarat election has given the 
government more confidence to confront the Left.  If the 
Congress Party had no spine before Gujarat, why would it have 
any vertebrae left after losing Gujarat?  The commentators' 
general optimism could reflect that the Gujarat election 
ultimately has little impact on a strategy that the Congress 
Party concocted several months ago. 
WHITE