VZCZCXRO1199
OO RUEHBI RUEHCI
DE RUEHNE #0645/01 0601210
ZNR UUUUU ZZH
O 291210Z FEB 08
FM AMEMBASSY NEW DELHI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0688
INFO RUEHCG/AMCONSUL CHENNAI PRIORITY 2552
RUEHCI/AMCONSUL KOLKATA PRIORITY 1861
RUEHBI/AMCONSUL MUMBAI PRIORITY 1656
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 NEW DELHI 000645 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
USDOC FOR ITA/MAC/OSA/LDROKER/ASTERN/KRUDD 
USDOC FOR BIS 
DEPT PLEASE PASS TO USTR CLILIENFELD/AADLER 
STATE FOR SCA/INS 
 
E.O. 12958: N/A 
TAGS: ECON ETRD MTCR PARM PREL IN
SUBJECT: COMMERCE UNDER SECRETARY MANCUSO DISCUSSES TRADE 
EXPORT CONTROLS WITH COMMERCE MINISTER NATH 
 
¶1.  (SBU) Summary:  In their February 28 meeting, Commerce 
Minister Nath stressed to Under Secretary Mancuso the 
importance of progress on all of the U.S.-India economic 
dilaogues, including the HTCG, to ensure continued interest 
in the government-to-government engagement and forward 
progress in the bilateral economic relationship.  U/S Mancuso 
said that he and his staff were committed to improving Indian 
access to U.S. high technlogy goods through the validated 
end-user program and other means, noting the significant 
progress made in this area since the HTCG was created.  Both 
sides agreed that more engagement on HTCG was needed between 
BIS and the Ministry of Commerce and Industry.  Mancuso 
reiterated the importance to the U.S. of finalizing the civil 
nuclear agreement this year.  End Summary. 
 
 
¶2.  (SBU) Under Secretary of Commerce Mario Mancuso, 
accompanied by the Ambassador and Commerce Assistant 
Secretary Borman, met February 27 with Indian Minister of 
 
SIPDIS 
Commerce and Industry Kamal Nath prior to February 28-29 
meetings of the High Technology Cooperation Group (HTCG). 
Mancuso told Nath that the U.S. views India as one of its 
most important relationships, involving many people at many 
levels.  Nath said that India too highly valued its 
relationship with the U.S., adding, "let me tell you what 
others aren't saying."  Nath noted that, when he met former 
Secretary of State Schultz in 1988 and they discussed 
 
SIPDIS 
regional terrorism, Schultz described it as a bilateral issue 
between India and Pakistan, while India saw it as a global 
problem.  Nath said that when he again saw Schultz recently, 
the latter commented how much has changed with respect to 
terrorism. 
 
¶3.  (SBU) Shifting to economics, Nath said that it was 
important for the U.S. to recognize that "one size does not 
fit all", adding that India's size and markets make it very 
different from Peru or Colombia.  Contrasting India with 
China, Nath said that the U.S. has not had the same trade 
issues with India as with China; when the MFA ended, it was 
China, not India, that flooded U.S. markets with textiles. 
Nath said it was in the interest of the U.S. that its 
leadership  look at India uniquely. 
 
¶4.  (SBU) U/S Mancuso thanked Nath for his candor, agreed 
that India was unique and, therefore, he and his staff were 
trying to think out of the box and how to move forward on 
strategic and high tech trade.  Mancuso said that the U.S. is 
now having great success on this front:  when the HTCG began 
in 2002, 25 percent of all US exports to India required an 
export license; now that number is 0.2 percent.  Mancuso said 
that part of the problem today for some Indian companies is 
that they don't understand the process and benefits under the 
new Validated End User (VEU) program, and Commerce will 
continue to work with these companies and the GOI under the 
HTCG to fix this. 
 
5.(SBU)  Nath said that undoubtedly there had been movement 
and progress, but it must continue. India is now engaging 
globally both commercially and politically and this will be a 
continuous process as well between the oldest and largest 
democracies.  Nath added that India, as a stable country with 
the second largest Muslim population, exists in a tough 
neighborhood surrounded by neighboring states in turmoil with 
mounting terrorism everywhere, presenting huge polity 
challenges to the GOI.  This is another major reason why the 
U.S.-India relationship is so important.  Nath noted that to 
keep the relationship strong, the two countries had to 
preserve and move forward on their economic engagement 
through the Trade Policy Forum (TPF) and its new Private 
Sector Advisory Group (PSAG), the Commercial Dialogue, CEO 
Forum, and HTCG.  He added that he told this to USTR Susan 
Schwab over coffee at the February 19 TPF in Chicago. 
 
¶6. (SBU) Mancuso responded that, while the U.S. has 
constraints like India, the two countries' trajectories are 
converging so "let me know what we can do and I will take it 
back to Washington."  Nath said that the most important thing 
was for the bilateral economic groups we have established to 
continue and thrive.  He noted that when he was Environment 
Minister and Bill Reilly was EPA Administer, the challenge 
was making the Rio Conference and Montreal Protocol on 
Climate Change successful despite wide divergences among 
countries.  He said that the U.S. and India succeeded 
 
NEW DELHI 00000645  002 OF 002 
 
 
together in getting a good outcome and we must do the same 
with our bilateral economic groups: "we must show results or 
everyone will lose interest."  Mancuso agreed, noting that 
the U.S.-India relationship enjoyed broad bipartisan support 
ever since former President Clinton began the move to 
accelerate the relationship that has continued under 
President Bush.  Nath said that, in his view, the turning 
point started even earlier under the Bush one presidency, 
when President Bush upgraded the relationship, despite 
misgivings in the Washington bureaucracy. Mancuso said that, 
although it is not in his bailiwick, he did want to reiterate 
the U.S. strong desire to see the civil nuclear agreement 
completed this year, adding that, while our relationship is 
now very broad, some of the wind will go out of the sails in 
our relationship if the agreement is not completed. 
 
¶7.  (SBU) Nath asked what was the significance of the current 
election rhetoric on job loses under FTAs and outsourcing. 
Mancuso said that every country has a vein of protectionism 
that became more prominent in election years, but that it 
will eventually pass.  The Ambassador noted that, given that 
the NAFTA has become prominent target in the Democratic 
campaign thus far, the outsourcing issue may have life for 
awhile, but it will not last, given the clear economic 
benefits from globalization.  He added that Indian investment 
in the U.S. is a greater story.  Nath agreed, citing as an 
example India's acquisition of the failing Essar steel mill 
in Minnesota that saved many U.S. jobs.  Ambassador noted 
that it would be useful to get the Indian investment in U.S. 
numbers and Nath agreed.  Nath also noted that Indian 
companies were outsourcing to countries like Sri lanka as 
well, where it as easier for Indian companies to set up and 
export to India under zero duties.  The Ambassador noted that 
Indian IT companies are also hiring U.S. graduates. 
 
¶8.  (SBU) A/S Borman suggested that, to further the HTCG 
dialogue, it would be useful to have more interaction with 
the Commerce Ministry, recognizing that MEA has the lead. 
Nath agreed that more coordination would be better and 
Mancuso said that his staff would brief Nath's staff before 
they depart on February 29 following the conclusion of the 
HTCG. 
 
¶9.  This cable was cleared by Under Secretary Mancuso's 
delegation before departing Post. 
MULFORD