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UNCLAS SECTION 01 OF 08 NEW DELHI 000763 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
FOR SPEAKER OF THE HOUSE NANCY PELOSI AND MEMBERS OF 
CONGRESS EDWARD MARKEY, JIM MCDERMOTT, GEORGE MILLER, JAMES 
SENSENBRENNER, JAY INSLEE, ELEANOR HOLMES NORTON, HILDA 
SOLIS, ANNA ESHOO, RUSH HOLT AND HOUSE SERGEANT OF ARMS 
WILSON LIVINGOOD FROM AMBASSADOR MULFORD; STATE FOR 
SCA/INS, H 
 
E.O. 12958: N/A 
TAGS: PREL PGOV ECON KNNP IN
SUBJECT: SCENESETTER FOR SPEAKER OF THE HOUSE NANCY PELOSI 
AND DELEGATION'S MARCH 2008 VISIT TO INDIA 
 
¶1.  (SBU) Dear Speaker of the House Pelosi, Members of 
Congress Markey, McDermott, Miller, Sensenbrenner, Inslee, 
Holmes Norton, Solis, Eshoo, Holt and the Honorable Mr. 
Livingood: The Country Team and I warmly welcome you to 
India.  Your visit comes at a critical juncture in what has 
been a period of profound transformation in Indo-US 
relations.  While we have successfully accelerated and 
expanded the ties between our two democracies into a broad, 
comprehensive relationship, the ruling coalition, known as 
the United Progressive Alliance (UPA), has effectively 
stalled the implementation of the civil nuclear initiative in 
the face of vociferous Communist opposition, which has 
threatened to bring down the government if India gets closer 
to the U.S.  Despite the delay in implementing the 
initiative, which has impacted other potential collaborative 
activities, the long term prospects for a closer, abiding 
bilateral relationship with a vibrant, prosperous India are 
very strong - and remain of strategic importance to the U.S. 
With India set to surpass China as the fastest growing 
economy in 2015, this may well become our most important 
bilateral relationship within 20 years.  Your visit helps 
demonstrate the vitality and breadth of our relationship, 
which now touches on almost all areas of human endeavor.  Our 
Embassy is trying to put out the public message that there 
are numerous natural complementarities and deep linkages 
between our two countries.  We hope that the more these 
linkages bring visible benefits to ordinary Indians, the more 
the Communist party's intransigence and ideology will be seen 
as incurring heavy costs to India and its people.  The bright 
spot remains the private sector's exponential growth and 
people-to-people ties, to which government-to-government ties 
ultimately must catch up. 
 
¶2.  (SBU) This message provides you an update on the status 
of the civil nuclear deal, political climate, economic 
situation, trafficking in persons and climate change. 
 
------ 
The Civil Nuclear Cooperation Initiative 
------ 
 
¶3.  (SBU) President Bush and Prime Minister Singh pledged in 
July 2005 to take a series of reciprocal steps that would 
culminate in the opening of India's formerly sanctioned civil 
nuclear market. India completed the first milestone on March 
2, 2006 by releasing a plan to separate its civilian and 
strategic nuclear programs in a phased manner, and pledging 
to place its civilian facilities under International Atomic 
Energy Agency (IAEA) safeguards.  An overwhelming, bipartisan 
majority in the U.S. Congress then approved in December 2006 
the Hyde Act, which allowed the U.S. and India to engage in 
civil nuclear trade.  The U.S. and India concluded an 
Agreement for Peaceful Nuclear Cooperation, also known as the 
123 Agreement, in July 2007, which sparked political turmoil 
when the Communist parties threatened to withdraw their 
support from the government because the Agreement, they felt, 
brought India too close to the U.S.  The opposition parties 
also claimed that the terms of the Hyde Act and 123 Agreement 
rendered India's nuclear weapons program useless.  Meanwhile, 
India and the IAEA have effectively reached agreement on a 
safeguards agreement, which the government will try to sell 
to its skeptical Communist allies on March 17.  Should the 
government receive the go-ahead, it will submit the agreement 
to the IAEA Board of Governors for approval, and the U.S. 
will seek to enact a policy change in the Nuclear Suppliers 
Group (NSG) to allow India to engage in civil nuclear 
commerce globally.  Finally, the Administration will submit 
the 123 Agreement to the U.S. Congress for an up-or-down vote 
of approval.  Civil nuclear cooperation between the U.S. and 
India will offer benefits to both countries' citizens through 
enhanced energy security, more robust nonproliferation 
efforts, an energy source without carbon emissions, and 
greater economic opportunities. 
 
------ 
The Political Landscape 
------ 
 
¶4.  (SBU) Indian domestic politics is practiced within a 
vibrant, raucous, few-holds-barred democratic environment. 
Indians take their democracy seriously and vote in large 
 
NEW DELHI 00000763  002 OF 008 
 
 
numbers, with turnout sometimes exceeding 80 percent.  The 
election campaign never ends because an election of 
significance is always around the corner somewhere in the 
country.  In addition to national elections which are due 
every five years (but can and often do occur more 
frequently), several states go to the polls each year for 
elections to the state legislatures.  Two national parties 
are perched at the top of the political pyramid -- the 
left-of-center Congress Party and the right-of-center 
Bharatiya Janata Party (BJP).  Below them are dozens of 
smaller regional, state and special-interest parties.  While 
both the Congress Party and the BJP battle across all the 
disparate regions of the country, neither has the ability to 
form a government in Delhi on its own and must rely on 
fractious and unwieldy coalitions with smaller regional 
parties to govern. 
 
¶5.  (SBU) The once mighty Congress Party, dominated for long 
by the Nehru-Gandhi dynasty and in the forefront of the 
independence movement, has lost its aura and fallen in 
stature.  It ruled India for most of the period since 
Independence in 1947 but its credibility has eroded over the 
years because of the autocratic ways of its leaders, its 
failure to respond to regional aspirations, and its inability 
to adapt to the changing India.  The BJP, with its roots in a 
muscular Hindu response to centuries of foreign subjugation, 
first by a succession of Muslim rulers from Central Asia and 
then by the British Empire, has emerged as a viable 
alternative to the Congress Party.  It occasionally reverts 
to its Hindu nationalism rhetoric but has tempered its 
discourse and broadened its appeal to position itself as a 
mainstream political force.  It led the National Democratic 
Alliance (NDA) coalition government from 1999-2004 before 
being unceremoniously ousted by the voters for its failure to 
more evenly disperse the benefits of a "Shining India" to the 
65 percent of the population that lives in rural India. 
 
¶6.  (SBU) The Congress Party, which leads the current United 
Progressive Alliance (UPA) coalition government, staggers 
into its final year in office bruised and battered by a 
series of setbacks in state elections during the last year 
and a bitter squabble between UPA coalition allies over the 
U.S.-India civil nuclear agreement.  Public bullying by its 
communist party allies has fueled perceptions of a feeble and 
indecisive party with no back-bone, intent of hanging on to 
power even at the cost of compromising on its principles. 
The BJP, in contrast, has the wind in its sails after its 
thumping wins in state elections last year.  Sensing blood, 
the party set aside years of internal struggles following its 
2004 loss to unite under the leadership of former Party 
President and former Deputy Prime Minister L.K. Advani.  It 
has consolidated its support with its NDA allies.  It has 
taken lessons from its recent state election wins to sharpen 
its strategy and hone its message for the coming national 
elections. 
 
¶7.  (SBU) In search of a make-over, the Congress Party 
recently unveiled a "please-all" super-populist budget, 
opening up the public purse strings to an unprecedented 
extent.  While the budget's centerpiece is a USD 15 billion 
write-off of farming debt, it also includes sops for almost 
every interest group and voter block.  The Congress Party 
hopes this election year largesse will revive its waning 
fortunes and help it remain competitive in the coming state 
and national elections.  Some observers believe that the 
Indian voter is too sophisticated to be taken in by such 
cynical election year pandering.  In any event, it is 
impossible to predict at this time which party will emerge on 
top in the national elections.  But, it is safe to say that 
that neither the Congress Party nor the BJP is likely to win 
a majority on its own and either will have to forge a 
coalition with the smaller regional parties to form a 
government.  The smaller parties will continue, therefore, to 
exert greater influence on government policy that their 
numbers in Parliament would justify. 
 
------ 
A COMPREHENSIVE ECONOMIC RELATIONSHIP 
------ 
 
¶8.  (SBU) The bilateral economic relationship is a critical 
 
NEW DELHI 00000763  003 OF 008 
 
 
driver in deepening ties between our countries.  This is 
happening through government exchanges such as the Economic 
Dialogue and the Trade Policy Forum, and by our countries' 
private sectors, including the CEO Forum, that are boosting 
U.S.-India trade and investment to new heights. 
 
------ 
INDIA'S ECONOMIC TRAJECTORY - ONE OF TRANSFORMATION 
------ 
 
¶9.  (SBU) I know that you are well aware of India's economic 
performance that has seen Gross Domestic Product (GDP) growth 
jump in the last two decades from the 6 percent range to 
nearly four years straight of 8.5 percent compounded annual 
growth.  While there is some question whether this is simply 
cyclical, we perceive fundamental structural changes underway 
that are reshaping India's socio-economic landscape.  These 
include the significant rise in savings and investment, the 
declining share of agriculture in GDP, replaced by industry, 
and the "market-seeking" flows of foreign direct and 
portfolio investment into the country.  Since two-thirds of 
India's economy is driven by domestic consumption, we 
anticipate a U.S. economic slowdown will initially take off 
only about half a percent of GDP, with growth remaining about 
8%.  If financial markets deteriorate sharply in line with 
continuing U.S. market declining growth, India may be 
impacted more severely. 
 
¶10.  (SBU) Savings have risen over the past decade to hit 
roughly 33 percent of GDP, a combination of more corporate 
saving and less government dissaving (debt financing).  While 
corporate savings may ebb a bit in the next decade, household 
savings are also beginning to rise and to become more fluid, 
moving from government subsidized post office savings 
deposits to commercial banks and mutual funds. Investment has 
also grown significantly in recent years, nearing 37 percent 
of GDP - again, mainly a function of corporate expansion 
plans, but the government's infrastructure goals are boosting 
public investment levels as well.  Indian economists have 
noted that many Asian economies hit a "take off" stage in 
their growth once investment crossed the threshold of 40 
percent of GDP. The savings-investment gap is clearly 
financed through imports and a trade deficit, but other 
inflows, including the FDI and portfolio investment noted 
above, have kept the balance of payments in surplus for three 
years with no end in sight, and foreign exchange reserves 
continue to rise, already surpassing USD300 billion, the 
fourth largest in the world. 
 
¶11.  (SBU) The agricultural sector is critical to many 
households' incomes, since more than 50 percent of India's 
workers are involved in agriculture.  But in terms of GDP, 
agriculture accounts for less each year, last year 
contributing just 18 percent to national economic growth.  On 
a macro scale, this decline lessens the volatility of growth 
that India's mainly monsoon-dependent agricultural sector 
brought, further making sustained GDP growth in the 8-9 
percent range a likely scenario.  Politically, however, the 
government struggles with proposed reforms that would have a 
broad effect on the 600 million people who are dependent on 
this underperforming sector.  In India, the rural poor vote 
much more than the urban masses, so any dislocation in the 
agricultural sector has the potential to have wide-ranging 
political consequences. 
 
¶12.  (SBU) At the same time, India's manufacturing sector is 
finally showing signs of expansion and global attention. 
Stuck at roughly 14 percent of GDP for nearly two decades - a 
stark contrast to many Asian economies' growth trends - 
manufacturing grew to 17 percent of GDP last year, and with 
double digit growth continuing, appears likely to continue 
its increasing contribution to GDP. 
 
------ 
JUST TWO INDIAS? 
------ 
 
¶13.  (SBU) India clearly has stark differences in rural/urban 
ratios in social and economic indicators, and at just 30 
percent urbanization, one of the lowest urbanization rates in 
the world.  The urban poor are the fastest growing segment of 
 
NEW DELHI 00000763  004 OF 008 
 
 
the population, at roughly five per cent per year.  In 
India's "mega cities", those with a population greater than 
one million, 40-60% of the inhabitants live in slums or other 
informal settlements.  Since much of the visible economic 
boom this past decade has been in knowledge-intensive 
industries, mainly in urban areas, there is a widely held 
perception of two widely different and diverging Indias in 
urban and rural India.  However, recent studies suggest that 
surprising developments are quietly underway outside India's 
cties.  One of the most important is that agriculture now 
accounts for only half of India's rural economy; no longer is 
rural synonymous with agricultural.  Also critical for 
understanding India's transformation is that rural incomes 
have been growing faster than urban incomes in recent years. 
 
¶14.  (SBU) Changes are underway in India's villages and small 
towns, but definitions and methodologies of measuring these 
changes are lagging.  The non-agricultural rural economy that 
is seeing incomes rise includes the increasing use of casual 
or contract labor, outside factories, for apparel assembly; 
the rise in national markets for traditional handicrafts; the 
rise in tourism, especially domestic; emerging 
agro-processing industries; sale of land for industrial use; 
and creation of linkages for goods and services between major 
metros' demand and rural areas' supply.  These dynamics are 
likely to become clearer in the next few years, as domestic 
companies, especially in retail, have begun to turn their 
marketing focus to India's rural sector, as urban markets 
become saturated.  This "bottom of the pyramid" approach is 
the best indicator of how employment, income, and consumption 
tastes are changing outside of India's metros. 
 
¶15.  (SBU) However, poverty remains a considerable and sober 
challenge in India, with official (consumption-based) 
estimates placing about 26 percent of the population below 
the poverty line, which many consider an underestimation. 
International standards put about 75% of the population below 
the poverty line, meaning they live on under two dollars a 
day.  In spite of India's economic growth over the past 
decade, 47% of its children are malnourished, 2.4 million 
children die each year of preventable diseases (and 500,000 
of those from diarrhea), only 38% of the children are fully 
immunized, and 50% of children drop out of school before the 
eighth grade.  In considering India's growth story and its 
need for inclusive growth, it is probably more useful to 
think of regional and state differences that create more than 
just the two India's of its cities and countryside. 
 
------ 
BIG SHIFTS POSE CURRENT CHALLENGES 
------ 
 
¶16.  (SBU) As manufacturing and industrialization take off, 
businesses need land, as seen in the attempt to establish 
special economic zones across the country.  Most States are 
developing their own policies for land acquisition or 
leasing, but are looking to the central government to 
articulate a resettlement policy for those who are displaced 
by transitioning land from agricultural to industrial use. 
This is a challenge given India's land size is only one-third 
China's, yet supports nearly as many people.  For Indian 
landowners themselves, the transition is less problematic, as 
land prices have gone up considerably.  However, millions of 
landless agricultural workers and those who leased their land 
from bigger farmers do not receive any compensation for the 
loss of their livelihood when land is purchased from the 
farmers.  Before these changes, they were already among the 
most economically vulnerable. 
 
¶17.  (SBU) India's emerging organized retail sector, 
especially in produce, poses another challenge to the current 
socio-economic structure.  Currently, only 3 percent of the 
food retail sector is organized.  The procurement of 
agricultural products was until recently fully under state 
government purview, and many states still have laws that 
limit the sale of produce to state-sanctioned markets.  Thus, 
direct sale to private buyers was prohibited.  While the 
ostensible reason was to protect the farmer (through state 
supervision), the result has been a sanctioned monopoly that 
created middlemen - called commission agents - who often 
exploited the farmers' lack of selling options.  The result 
 
NEW DELHI 00000763  005 OF 008 
 
 
is that Indian farmers typically get 35 percent of the final 
retail price of their goods, while in countries with more 
organized retail, farmers get 65 percent of that final price. 
 
¶18.  (SBU) Organized retail would benefit farmers and 
consumers, but make uncertain the fate of small street 
vendors and shopkeepers, who number as many as 40 million. 
These groups have joined together in several politically 
active associations to protest - and slow down or stop - the 
development of organized retail.  While Wal-Mart figures into 
the rhetoric because of its backend supply joint venture with 
Bharti Enterprises, much of the focus is on several large 
Indian companies, including Reliance.  The benefits to 
farmers, from higher sale prices, extension services that 
retail companies have offered, and improved infrastructure 
and supply chains, would be revolutionary. 
 
------ 
BILATERAL TRADE GROWING 
------ 
 
¶19.  (SBU) India-U.S. two-way merchandise trade touched USD32 
billion in 2006 and, available data through November 2007 
indicates further growth in 2007 of 28% to USD41 billion. 
Last year, the U.S. trade deficit with India went down 42 
percent.  Despite this strong growth in the trade 
relationship, a number of impediments persist and could 
impact future trade in both directions.  U.S. exporters 
continue to encounter tariff and non-tariff barriers, despite 
Indian economic reforms and autonomous (non-WTO) reductions 
in duties applied to industrial goods. 
 
¶20.  (SBU) Both countries have sought to advance our 
bilateral trade dialogue through the U.S.-India Trade Policy 
Forum, which is chaired by USTR and the Commerce Ministry and 
meets semiannually.  The five focus groups that comprise the 
Forum- agriculture, intellectual property, investment, 
services, and tariff and non-tariff barriers- interact 
regularly, often through videoconferences. 
 
¶21.  (SBU) Included among the bilateral Trade Policy Forum 
issues are a number of food and feed market access concerns 
related to food safety.  For example, the USG has been 
pressing the Indian government to allow in U.S. poultry, pet 
food, dairy products and wheat for some time now.  But the 
Indian government has not only refused to accept the safety 
of these products or recognize our regulatory systems and 
standards, they have thrown up additional requirements not 
based on science.  In fact, the U.S. maintains a 3:1 trade 
deficit with India on food and agricultural products with 
Indian food/feed shipments to the U.S. of USD1.4 billion. 
Further, the Indian government has requested the U.S. allow 
in imports of Indian fruit such as grapes, pomegranates and 
mangoes.  However, only mangoes have been permitted to enter 
the U.S. - using radiation treatment to mitigate pests - due 
to the GOI's inability to certify that there are no harmful 
inspects in shipments to the United States. 
 
------ 
ECONOMIC POLICY-MAKING IN A COALITION 
------ 
 
¶22.  (SBU) After delivering several key reforms, including a 
national value-added tax, Open Skies Agreement with the U.S. 
(India's first), improved patent protection through 
legislation, and privatization of major airports, reform 
momentum has noticeably stalled in the UPA coalition. 
Several key legislative amendments to liberalize the banking, 
insurance and pension sectors are stuck in Parliament, mainly 
because of opposition by the Left parties.  The Finance 
Minister has acknowledged this, ascribing it to the challenge 
of heading a coalition.  Given the UPA's inherent 
instability, and the harsh ideological divides between the 
Left and reformers like the Prime Minister and his economic 
team, the Ministry of Finance (MoF) has publicly described a 
newer approach to "opportunistic reform" - exploiting new 
economic developments or pressures that permit 
non-Parliamentary reforms to be enacted. 
 
------ 
NEW BUDGET HAS PRE-ELECTION POPULIST FOCUS 
 
NEW DELHI 00000763  006 OF 008 
 
 
------ 
 
¶23.  (SBU) The UPA presented its last budget before national 
elections on February 29 and delivered an expected 
pre-election, populist budget that targeted both poor farmers 
and middle class taxpayers.  While government finances can 
handle some increased spending - revenues have more than 
doubled since 2002 - the $189 billion budget broke with the 
past few years of fiscal debt reduction.  It promises a $15 
billion small farmer debt waiver and no reform of ballooning, 
but ineffective, subsidies for food, fertilizer, and oil. 
The budget did increase allocations for education and health 
by 20% and 15% respectively, as the government seeks to boost 
access to primary health care and secondary education, 
especially in rural areas.  The government also significantly 
raised spending on urban and rural infrastructure, including 
roads, electrification, and sanitation. 
 
------ 
MILITARY TO MILITARY 
------ 
 
¶24.  (SBU) The trend in the U.S.-India security relationship 
is overwhelmingly positive, despite irritants such as 
unsigned agreements on logistics support and the sharing of 
classified information, which have lingered for years.  The 
Indian military - particularly the Navy - generally is more 
willing to push the envelope on closer relations than any 
other GOI body.  Malabar 2007 brought Japan, Australia and 
Singapore together with the U.S. and India for the first time 
for naval exercises.  Red Flag 2008 in the Nevada desert will 
include India as the first-ever non-NATO country/major 
non-NATO ally to participate.  The first ever U.S.-India 
cooperation under the Global Peacekeeping Operations 
Initiative took place in January 2008, and with India as a 
global leader in PKO participation and training, there is 
hope for expanding GPOI cooperation.  Secretary Gates visited 
India February 26-27, the first visit by the U.S.SecDef since 
Secretary Rumsfeld signed the Defense Framework Agreement in 
 
SIPDIS 
June 2005, and solidified gains in military-to-military 
relations.  Defense sales, dormant for over 40 years while 
India was essentially a Soviet client, have just started to 
take off, with a billion dollar deal for six C-130s finalized 
in January the latest breakthrough.  We're hoping to finalize 
a separate billion dollar deal for P-8 maritime patrol 
aircraft, and both Boeing and Lockheed Martin are competitors 
for the estimated $10 billion combat aircraft bid expected to 
be decided in 2009. 
 
------ 
TERRORISM/COUNTERTERRORISM 
------ 
 
¶25.  (SBU) India continues to rank among the world's most 
terror-afflicted countries.  The conflict in Jammu and 
Kashmir, attacks by extreme leftist Naxalites and Maoists in 
eastern and central India, assaults by ethno-linguistic 
nationalists in the northeastern states, and terrorist 
strikes nationwide by Islamic extremists took more than 2,300 
lives in 2007.  There were several major attacks linked to 
Islamic extremists in 2007.  Indian officials claim that the 
perpetrators of these attacks have links to groups based in 
Pakistan and Bangladesh, particularly Lashkar-e-Taiba, 
Jaish-e-Mohammad, and Harkat-ul-Jihad Islami, among others. 
The violence in Jammu and Kashmir abated somewhat in 2007, 
but the area remains volatile.  Prime Minister Singh has 
called leftist extremist (Maoist or agrarian Naxalite) 
groups, "the greatest threat to India's internal stability 
and democratic culture."  Leftist extremist groups are very 
active in wide areas of impoverished rural eastern and 
central India, and also operate in parts of southern India. 
Ethnic-linguistic separatist groups attack and kill in 
Northeastern India, particularly in the states of Assam, 
Nagaland, Manipur, Tripura, and Meghalaya.  Several 
proscribed terrorist groups operate in the northeast, 
including the United Liberation Front of Assam (ULFA) and the 
People's Liberation Army. 
 
¶26.  (SBU) The lack of security, remoteness, and inhospitable 
terrain combine to prevent the government from providing 
security and other basic services in many of the areas in 
 
NEW DELHI 00000763  007 OF 008 
 
 
which the leftist extremists and the northeastern separatist 
groups operate.  The Indian government's counterterrorism 
efforts are hampered by its outdated and overburdened law 
enforcement and legal systems. The Indian court system is 
slow, laborious, and prone to corruption; terrorism trials 
can take years to complete. Many of India's local police 
forces are poorly staffed, lack training, and are 
ill-equipped to combat terrorism effectively. 
 
¶27.  (SBU) The United States cooperates with India under the 
Counter Terrorism Joint Working Group, which meets twice a 
year.  Our Anti-Terrorism Assistance program provides 
training to India's law enforcement officials.  One area of 
concern is that the program will be cut significantly in FY 
¶2009.  We are also in the beginning stages of developing 
regional programs designed to bring together relevant 
officials from South Asian nations in training opportunities. 
 The Office of Defense Cooperation also provides 
counterterrorism courses to a small number of military and 
civilian officials each year. 
 
------ 
TRAFFICKING IN PERSONS 
------ 
 
¶28.  (SBU) The Department of State is required by law to 
submit a report each year to the U.S. Congress on foreign 
governments' efforts to eliminate severe forms of trafficking 
in persons.  The report is intended to raise global 
awareness, highlight efforts of the international community, 
and encourage foreign governments to take effective actions 
to counter all forms of trafficking in persons.  Countries 
meeting minimum standards under U.S. law are placed in Tier 
¶1.  Those assessed as not fully complying with minimum 
standards but which are making significant efforts to do so 
are classified as Tier 2.  Countries assessed as neither 
complying with the minimum standards nor making significant 
efforts to meet them are classified as Tier 3. 
 
¶29.  (SBU) To quote the 2007 Trafficking in Persons (TIP) 
Report: "India is placed on the Tier 2 Watch List for a 
fourth consecutive year for its failure to show increasing 
efforts to tackle India's large and multidimensional problem. 
 Overall, the lack of any significant federal government 
action to address bonded labor, the reported complicity of 
law enforcement officials in trafficking and related criminal 
activity, and the critical need for an effective 
national-level law enforcement authority impede India's 
ability to effectively combat its trafficking in persons 
problem." 
 
------ 
CLIMATE CHANGE 
------ 
 
¶30.  (SBU)  As a non-Annex I country with no obligations 
beyond monitoring and reporting emissions, India is a strong 
supporter of the Kyoto Protocol and is fully locked into the 
UN Framework Convention on Climate Change (UNFCCC).  While 
India is a regular participant in the Major Economies 
Meetings (MEM) process and takes the threat of climate change 
seriously, the GOI position on climate change has remained 
virtually unchanged and can be summarized in the following 
four points:  1) any future international agreement on 
climate change must be negotiated  under the rubric of the 
UNFCCC; 2) the common but differentiated response language of 
the UNFCCC must be maintained; 3) India's economic 
development and poverty alleviation goals require great 
increases in power generating capacity which is highly 
dependent on coal and any accompanying increases in India,s 
green house gas (GHG) emissions cannot be reduced or checked 
by a future agreement on climate change; and 4) clean 
technology transfer must be provided to India and other 
developing countries at low or no cost.  Recently, Prime 
Minister Manmohan Singh announced India would never emit more 
GHGs on a per capita basis then the average emissions of 
developed countries.  Given India's population of 
approximately 1.2 billion, this pledge will have no impact on 
curbing India's GHG emissions for the foreseeable future 
considering that, on a per capita basis, India is ranked 146 
in GHG emissions despite the fact its gross emissions 
 
NEW DELHI 00000763  008 OF 008 
 
 
overtook Russia's in 2007, making India the world's fourth 
largest overall emitter of GHGs.  It should be noted, 
however, that large scale development of civilian nuclear 
energy, as permitted under the U.S.-India civil nuclear 
agreement, would substantially reduce India's future 
production of greenhouse gases. 
 
------ 
VISA GROWTH MIRRORS PEOPLE-TO-PEOPLE TIES 
------ 
 
¶31. (U) One of the fundamental strengths of the U.S./India 
relationship is large number of Indians who have personal 
links to the United States.  Following decades of travel and 
immigration (even through the darkest days of our bilateral 
relationship) a majority of the people you would meet in a 
Board Room or at a Government conference table have some 
family who have studied, worked, or lived in the United 
States.  With some 84,000 enrolled in the United States, 
India is the largest source country for foreign students. 
This remarkable trend is accelerating, as visa demand is 
increasing by 25% per year (50% in Mumbai).  Mission India, 
understanding the underlying value of the mutual 
understanding gained through increased travel, has dedicated 
unprecedented resources to the challenge.  As a result in FY 
2007, our non-immigrant visa production soared from 459,000 
to 726,000 cases.  We are investing in infrastructure and 
personnel to continue to make people-to-people ties one of 
the pillars of our dynamic bilateral relationship.  Finally, 
another interesting trend is the increase in Indian-Americans 
who are returning to their country of birth to take advantage 
of the economic miracle here. 
 
¶32.  (SBU) Once again, we look forward to welcoming you to 
India and to working with your staff to ensure a successful 
and productive visit. 
MULFORD