VZCZCXRO9459
OO RUEHAST RUEHBI RUEHCI RUEHLH RUEHPW
DE RUEHNE #2086/01 2121322
ZNR UUUUU ZZH
O 301322Z JUL 08
FM AMEMBASSY NEW DELHI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2841
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNNSG/NUCLEAR SUPPLIERS GROUP COLLECTIVE
RUEAIIA/CIA WASHDC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUEKJCS/JOINT STAFF WASHDC
RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC
RUEHUNV/USMISSION UNVIE VIENNA 1589
RUCNDT/USMISSION USUN NEW YORK 6729

UNCLAS SECTION 01 OF 03 NEW DELHI 002086 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PARM TSPL KNNP ETTC ENRG TRGY IN
SUBJECT: INDIA CONTINUES TO DEBATE NUCLEAR INITIATIVE, WARY 
OF NSG CONDITIONS 
 
REF: BEIJING 2943 
 
¶1. (SBU) SUMMARY.  A week after the United Progressive 
Alliance (UP) government's victory in the July 22 confidence 
vote, the U.S.-India Civil Nuclear Cooperation Initiative 
remains a focus of media coverage and political positioning. 
Print media scrutinized negotiations over the language of 
India's draft Nuclear Suppliers Group (NSG) exemption, 
emphasizing the importance for India of an "unconditional" 
exemption.  One commentator noted that the exemption language 
will not include conditions imposing new limits on nuclear 
testing, but most focused instead on the veiled meaning 
behind the U.S. preference for speaking of a "clean" rather 
than an "unconditional" exemption.  Another commentator 
claimed that Washington is "split down the middle" on 
conditions in the draft NSG exemption.  The Nuclear 
Initiative also continues to shape party positions with a 
view toward national elections next year.  The Samajwadi 
Party (SP) released a statement calling for amendments to the 
Hyde Act even as the party's leadership reasserted the 
importance of the Nuclear Initiative, all of which may have 
been an effort to insulate the party from criticism that it 
sold out to the government.  Indian media continues to follow 
the Indian government's efforts to secure consensus support 
for India's IAEA safeguards agreement and an NSG exemption, 
including Foreign Minister Pranab Mukherjee's discussions on 
the margins of the Non-Aligned Movement (NAM) ministerial 
meeting in Tehran and Minister of State Prithviraj Chavan's 
meetings in Beijing (reftel).  Post also fielded several 
queries from local representatives of NSG members asking for 
clarifications on the process and content of the draft NSG 
exemption in light of these media commentaries.  Interest in 
Delhi -- within media, political, and diplomatic circles -- 
in the remaining steps toward completion the Nuclear 
Initiative will likely remain intense until the deal is done. 
 END SUMMARY. 
 
Skeptical Commentators Parse NSG Exemption Leaks 
- - - 
 
¶2. (SBU) Indian print media continued to scrutinize the next 
steps in the Nuclear Initiative, focusing attention on 
bilateral U.S.-India discussions about the draft NSG 
exemption language.  Under the July 30 headline "U.S. Draft 
on NSG Exemption Falls Short of Expectations," Times of India 
diplomatic correspondent Indrani Bagchi wrote that India has 
made clear that the draft exemption must be "unconditional," 
adding that conditions would not only be resisted by India, 
but also by large potential suppliers such as France and 
Russia.  "The countries that worry India most," according to 
Bagchi, "are the ones that have little stake in India or 
nuclear commerce with India and remain wedded to 
non-proliferation ideals."  Indian officials believe they 
have achieved a "satisfactory" level of comfort with most 
countries, according to Bagchi, who attributed to unnamed 
western diplomats the view that Indian diplomats have adopted 
a "pretty brutal approach," leveraging India's bilateral 
relationships to push through favorable decisions. 
 
¶3. (SBU) Indian Express diplomatic correspondent Pranab Dhal 
Samanta on July 30 observed that "India's aim would be to 
ensure there are no explicit curbs on nuclear testing linked 
to terminating fuel supply," and that "the draft (NSG 
exemption) makes no mention of either CTBT or testing." 
Samanta observed, "India has little room to accommodate any 
further commitments beyond the Indo-U.S. joint statement in 
July 2005."  He blamed Pakistan's letter to members of the 
IAEA Board raising issues about the draft safeguards 
agreement for the "uncomfortable technical questions" coming 
from some NSG countries. 
 
Talk Of "Clean" Exemption Muddies the Waters In Delhi 
- - - 
 
¶4. (SBU) Diplomatic correspondent for The Hindu newspaper 
Siddharth Varadarajan wrote two stories on July 29 under the 
headlines "No 'Unconditional' NSG Nod for India, Says U.S." 
and "Mulford Said NSG Waiver Would Be Clean, Not 
Unconditional."  Applying Talmudic analysis to Ambassador 
Mulford's statements in a July 23 press conference, 
Varadarajan wrote, "Though India has made it clear that it 
expects the United States to deliver a 'clean and 
 
NEW DELHI 00002086  002 OF 003 
 
 
unconditional exemption' for it from the export guidelines of 
the Nuclear Suppliers Group, Washington says it is committed 
only to a 'clean' and not 'unconditional' waiver for New 
Delhi."  Varadarajan quotes an unnamed Indian official who 
indicated that U.S. officials had been saying that the NSG 
exemption could include "reasonable conditionalities" and 
that "Europeans were insisting on these." 
 
¶5. (SBU) In an earlier article on July 26, Varadarajan listed 
several conditions that had been reportedly floated by the 
U.S., including "provisions for periodic review, Indian 
compliance with future NSG guidelines, a reversion of the ban 
in case India conducts a nuclear test explosion, and a ban on 
the sale of enrichment and reprocessing equipment." 
Varadarajan also said that India had objected to a 
prescriptive clause in the March 2006 NSG guideline draft 
that said members would "continue to strive" for the 
"earliest possible implementation" of full-scope safeguards 
in India.  Varadarajan quotes another unnamed Indian official 
saying, "If anything, the fierce debate and the trust vote 
that the Manmohan Singh government has just won demonstrate 
that the Prime Minister has absolutely no wiggle room.  If 
the NSG imposes conditions, India will reserve the right to 
walk away." 
 
¶6. (SBU) Diplomatic correspondent for the Telegraph K.P. 
Nayar reported on July 29 that the "coordinating committee in 
Washington" is "split down the middle" on how to secure a 
"clean" NSG exemption.  According to "sources that are privy 
to the committee's deliberations," Nayar reported that the 
NSG will agree to rule changes for India only after imposing 
"stiff conditions," but that most of the conditions discussed 
in the committee will be "totally unacceptable even to 
hard-core, blind and unquestioning supporters in India of the 
nuclear deal with the U.S."  Nayar reported that the group's 
members will look at four documents that collectively "uphold 
the spirit and substance of the existing NSG guidelines," 
namely the Hyde Act, 123 Agreement, IAEA safeguards 
agreement, and an IAEA additional protocol.  Nayar reported 
that the words "unconditional exemption" produce "paranoia" 
in Washington, and that the U.S. "will be resorting to 
semantics and using the term 'clean exemption'" in NSG 
meetings. 
 
Nuclear Initiative Remains Domestic Political Issue 
- - - 
 
¶7. (SBU) The Nuclear Initiative continues to shape party 
positions as they look past the July 22 confidence vote and 
toward national elections next year.  The Samajwadi Party 
(SP), which made possible the United Progressive Alliance 
(UPA) government's victory in the July 22 confidence vote, 
released a cryptic statement to media on July 28 saying India 
should press the U.S. to amend the Hyde Act.  The statement, 
issued after a routine meeting of the party's Uttar Pradesh 
state executive committee, reads "There are certain 
provisions in the Hyde Act passed by the US Congress which 
will create hindrance in going ahead with the nuclear deal. 
We request the Centre to press the US for making certain 
amendments in the Hyde Act before finalising the deal or 
present a bill in Parliament to make an Act in India also. 
The Act is necessary to prevent other countries from creating 
hindrance in India's strategic programme in the name of 
atomic energy production for the people."  Samajwadi leader 
Amar Singh reasserted the importance of the Nuclear 
Initiative in public statements following the party meeting. 
Embassy contacts speculated that the Samajwadi Party is 
trying to insulate itself from criticism that it sold out to 
the government ahead of an August 9 campaign rally by Uttar 
Pradesh Chief Minister Mayawati,s Bahujan Samaj Party (BSP), 
the Samajwadi Party's chief electoral rival in the state. 
 
¶8. (SBU) India's chattering classes continue to follow 
closely the Indian government's ongoing efforts to secure 
consensus support for India's safeguards agreement and an NSG 
exemption.  Foreign Minister Pranab Mukherjee, while 
attending the Non-Aligned Movement (NAM) ministerial meetings 
in Tehran on July 29, reportedly met IAEA Board member 
Algeria, IAEA members Egypt and Ghana, and NSG members 
Cyprus, Belarus, and South Africa.  The NAM members were 
reportedly supportive of India's efforts to address its 
energy needs through the Nuclear Initiative.  Local media 
 
NEW DELHI 00002086  003 OF 003 
 
 
reported that China remained noncommittal on support for 
India's safeguards agreement following Minister of State in 
the Prime Minister's Office Prithviraj Chavan's meetings in 
Beijing on July 29 (reftel).  Indian media disseminated 
locally Pakistani commentator Shireen Mazari's report 
crediting the U.S. with thwarting Pakistan's attempt to block 
consensus approval of India's safeguards agreement at the 
August 1 IAEA Board meeting. 
 
Comment:  Delhi Still Tuned In 
- - - 
 
¶9. (SBU) Post continues to field queries from local 
representatives of NSG countries asking for clarifications on 
the process and content of the draft NSG exemption 
discussions with the Indian government in light of these 
media commentaries.  Local interest in the remaining steps 
toward completing the Nuclear Initiative is intense and will 
likely remain so until Indians go to the polls to select a 
new government.  As is often the case in India, where a tight 
relationship exists between officialdom and the press, 
India's government is using the media to communicate with us, 
making very clear the importance it places on a "clean" NSG 
exemption. 
 
 
WHITE