VZCZCXRO8772
OO RUEHAST RUEHBI RUEHCI RUEHLH RUEHPW
DE RUEHNE #2297/01 2391232
ZNR UUUUU ZZH
O 261232Z AUG 08
FM AMEMBASSY NEW DELHI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3142
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 1609
RUCNDT/USMISSION USUN NEW YORK 6815

UNCLAS SECTION 01 OF 04 NEW DELHI 002297 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PARM TSPL KNNP ETTC ENRG TRGY IN
SUBJECT: SPECIAL ENVOY SARAN SAYS NUCLEAR SUPPLIERS 
EXCEPTION SHOULD STAY WITHIN EXISTING AGREEMENTS 
 
¶1. (U) Assistant Secretary Richard Boucher cleared this 
report. 
 
¶2. (SBU) SUMMARY.  The Prime Minister's Special Envoy for the 
Civil Nuclear Initiative Shyam Saran reviewed with visiting 
Assistant Secretary Richard Boucher and Ambassador Mulford 
progress toward an India-specific exception in the Nuclear 
Suppliers Group and fulfilling India's commitments pursuant 
to a Presidential Determination of the conditions in the Hyde 
Act.  Boucher and Mulford pushed for flexibility on the 
exception and early implementation of India's 
non-proliferation commitments.  Saran made a pitch for a 
clean exception and said that a review mechanism could be 
phrased positively in the sense of a partnership with the 
Nuclear Suppliers Group "to advance non-proliferation goals." 
He cited India's commitment not to share enrichment and 
reprocessing technology, that already went beyond a number of 
Group members.  He said countries with concerns about testing 
have every right to cease cooperation in the event of a test 
and added that existing Nuclear Suppliers rules already 
address this issue.  He allowed that countries could express 
their concerns in the Chairman's Summary or in bilateral 
agreements negotiated by those countries that hope to engage 
in cooperation with India. 
 
¶3. (SBU) SUMMARY CONTINUED.  Responding to Boucher's push, 
Saran understood that progress on the Hyde Act Presidential 
Determination items would help Supplier countries feel more 
comfortable with India's nonproliferation commitments in 
advance of an anticipated vote at the second Suppliers Group 
plenary on September 4-5.  But, he gave little ground.  He 
agreed that how IAEA Director General El Baradei 
characterizes India's progress on negotiating an Additional 
Protocol is most important, but was vague on India's plans to 
continue discussions.  Saran said incorporating some 
forward-looking formulation in the Indian-drafted letter on 
adherence could be possible in principle, but not necessarily 
before the Suppliers Group approves that draft text that 
contains a consultation mechanism.  Saran was disinclined to 
re-engage with reluctant Supply Group members at the 
political level, saying, "We have already conveyed what we 
thought was important."  END SUMMARY. 
 
Nuclear Suppliers Group Plenary Airs Concerns 
- - - 
 
¶4. (SBU) The Prime Minister's Special Envoy for the Civil 
Nuclear Initiative Shyam Saran characterized the August 21-22 
Nuclear Suppliers Group extraordinary plenary in Vienna to 
consider an India-specific exception to the Group's 
full-scope safeguards requirement to engage in civil nuclear 
trade as useful "if you take the positive view" to display 
"the universe of concerns."  Saran characterized the proposed 
amendments to the exception text as falling into three 
categories:  (1) clarifications of language in the text, 
mostly of a technical nature, which Saran thought could be 
addressed; (2) "killer amendments" that were known to be 
impossible for India to accept and, if accepted, would be 
inconsistent with NSG member claims that they support the 
Initiative (he mentioned the Comprehensive Test Ban Treaty or 
accepting the non-nuclear weapon state designation derived 
from the Nuclear Non-Proliferation Treaty); and (3) 
implementation requirements added to the operative portion 
(paragraph 3) of the text.  This third group is most 
difficult, according to Saran, because the proposed 
amendments go beyond what Prime Minister Singh has already 
agreed in the July 2005 Joint Declaration, the May 2006 
Indian Separation Plan, the agreed 123 Agreement text, and 
the IAEA Safeguards Agreement. 
 
¶5. (SBU) Saran shared that during India's outreach, capitals 
had expressed concerns, but not to anything approaching this 
level of specificity.  He also said that some countries, such 
as Ireland, felt they had to air some positions that they 
knew would be regarded as killer amendments because they are 
official positions.  New Zealand said the amendments they 
proposed were hand-written by Prime Minister Helen Clark and 
had to be regarded by their delegation as "set in stone." 
Others (Austria, Switzerland) said their guidance was issued 
in cabinet decisions, and any change would require new 
guidance.  Saran was clear that, when India pointed out what 
it regarded as killer amendments, "no one contested" that 
 
NEW DELHI 00002297  002 OF 004 
 
 
point. 
 
Worrisome Exception Amendments 
- - - 
 
¶6. (SBU) Saran said he was "worried" about the third category 
of amendments, which included a mechanism to review India's 
sustained nonproliferation commitment, a prohibition on the 
transfers of enrichment and reprocessing technology (ENR), 
and a response to a possible future Indian nuclear test. 
Boucher pressed for flexibility, saying that on each item 
political leaders will need something to point to, showing 
that their concerns had been considered.  On a review 
mechanism, Saran said uncertainty about the "longevity" of 
India's exception would inhibit commercial relationships. 
Saran suggested that a review might be made acceptable if 
phrased "positively" in the sense of "a partnership with the 
NSG to advance nonproliferation objectives through a process 
of dialogue."  Treating India like a "reformed criminal on 
probation," however, "was not sellable" domestically. 
 
¶7. (SBU) On enrichment and reprocessing technology, Saran 
observed that India has already committed in the July 2005 
Joint Declaration not to transfer this technology itself and 
to support global efforts to prevent its transfer by others. 
Saran said the IAEA Safeguards Agreement recognized that 
India already developed this technology indigenously, so 
limiting its transfer to India "does not serve any 
nonproliferation objective."  He also observed that the 
Nuclear Suppliers Group has not yet reached a consensus on a 
prohibition on the transfer of this technology as a common 
objective, observing that members such as Brazil and South 
Africa remain opposed to such a prohibition.  India's 
commitment therefore goes beyond that of many Nuclear 
Suppliers Group members on this issue.  Boucher said that 
might be a start, but leaders would need to see some 
reference to this area in the text.  Saran said that the 
India-specific exception should not be the place to hash out 
the Group's on-going deliberations.  Saran observed that if 
the Group were to come to such a decision in the future, 
India's exception text includes a consultation mechanism to 
discuss it with India. 
 
¶8. (SBU) The response to a possible future nuclear test by 
India is "difficult," according to Saran.  There is nothing 
to stop any country from halting cooperation immediately on a 
bilateral basis in the event of a nuclear test if they so 
choose, according to Sara, but India could not accept a 
condition making such a response "automatic."  He said 
Nuclear Suppliers guidelines already mandate meetings and 
action if a nation tests, and said this provision was not 
being waived.  Boucher proposed that perhaps this could be 
explicitly acknowledged in the exception text.  Saran allowed 
that concerns about testing could "perhaps" be addressed by a 
reference "in national statements or the Chairman's Summary." 
 
Presidential Determination:  Need Progress Before Second 
Plenary 
- - - 
 
¶9. (SBU) Boucher pressed Saran on the importance of rapid 
progress on the Presidential Determination items listed in 
Section 104b of the Hyde Act not only to satisfy U.S. 
Congressional requirements, but also to address doubts in 
Vienna about India's commitment to nonproliferation prior to 
the next Suppliers Group plenary.  Saran said he clearly 
understood that progress on these items would help Supplier 
countries in their vote at the second plenary on September 
4-5. 
 
¶10. (SBU) Department of Atomic Energy Chairman Dr. Anil 
Kakodkar will be in touch with International Atomic Energy 
Agency Director General El Baradei next week to make further 
progress on the Additional Protocol, according to Saran, but 
he was vague about whether Kakodkar would hold a meeting or 
talk about a text.  Saran agreed that how El Baradei 
characterizes India's progress matters to the U.S. Congress 
and to Nuclear Suppliers Group members.  Saran justified lack 
of further progress by explaining the phased approach to 
populating the annex of the IAEA Safeguards Agreement and the 
complexities of transitioning reactors under existing 
bilateral safeguards arrangements to the new umbrella 
 
NEW DELHI 00002297  003 OF 004 
 
 
safeguards.  India circulated its Separation Plan as an 
official IAEA document (INFCIRC/731) because "you needed it 
sooner, and that should be sufficient."  Boucher pressed that 
Congress will need to hear that India has called it a 
"declaration" of some sort.  Saran replied, "We do not see 
why your administration cannot certify that we have complied, 
but we will see what we can do."  Saran was reluctant to 
discuss India's commitment to file an IAEA Separation Plan 
Declaration because he had not yet received a full read-out 
from the August 25 meeting between Menon and Burns. 
 
¶11. (SBU) Boucher pressed for some kind of forward-looking 
commitment on adherence to Nuclear Suppliers Group and 
Missile Technology Control Regime export control guidelines 
in addition to the list of India's existing export control 
mechanisms.  Saran replied that the draft Suppliers Group 
exception text includes a provision for consultation with 
India.  Boucher said we need a forward-looking formulation be 
included in the Indian-drafted letter on adherence indicating 
a desire to work with these groups and keep up to date. 
Saran said this may be possible in principle as it is covered 
in the exception.  But it would be hard to include before the 
Suppliers Group approves that draft text.  Saran also 
stressed that India's export control lists are already 
broader than Nuclear Suppliers guidelines. 
 
¶12. (SBU) Boucher said the current version of India's letter 
of intent makes the application of the 123 Agreement 
conditional on the prior negotiation of a separate 
reprocessing agreement.  Boucher said the U.S. is willing to 
reference this requirement as described in Article 6, Section 
3 of the 123 Agreement, but not accept that such an 
arrangement is a precondition of inking deals on nuclear 
commerce with India.  Saran signaled his understanding and 
seemed to lack an answer for why the latest version of the 
letter that Foreign Secretary Shiv Shankar Menon shared with 
Under Secretary Burns in Washington on August 25 preserved 
this conditionality. 
 
Indians Reluctant to Engage Further At Political Level 
- - - 
 
¶13. (SBU) Boucher stressed the need to engage again at 
political levels while giving the politicians adequate cover. 
 Saran expressed appreciation for U.S. efforts, calling the 
Initiative a "major enterprise."  The Indian Government had 
no plans to gear up high level approaches to reluctant 
governments, according to Saran, but he explicitly rejected 
the thesis proffered in recent articles in The Hindu 
newspaper that moving the exception through the Nuclear 
Suppliers Group is solely the responsibility of the U.S. 
Boucher and Ambassador Mulford stressed that "there is still 
work to do" and pressed Saran on the importance of India 
making another push at political levels to stress how 
important the Initiative is to those country's relationships 
with India.  The Ambassador observed that the "Group of 6" 
countries that proposed most of the new conditions for 
India's exception would be harder to break as long as Japan 
and Canada remain supportive of their amendments.  Saran 
replied, "We have already conveyed what we thought was 
important."  (Note:  Tarun Das later told Boucher that in 
fact governments were being reminded that the bigger 
political and economic relationships would be affected by 
whether countries offered their support.) 
 
¶14. (SBU) In a prior meeting with Foreign Ministry Joint 
Secretary (Americas) Gaitri Kumar, Boucher went 
point-by-point through the Presidential determination items, 
stressing the importance of completing each one quickly, not 
only for the purpose of delivery to the U.S. Congress, but 
also in order to persuade Nuclear Suppliers Group members 
that India is pursuing key non-proliferation goals.  Boucher 
stressed in particular the importance of making substantial 
progress on an Additional Protocol, stating that a text must 
be on the table.  Kumar maintained that each of India's 
special envoys, deployed to Nuclear Suppliers Group and 
International Atomic Energy Agency member capitals, carried a 
brief explaining how India would complete the seven required 
Presidential Determination items.  Boucher assured her that, 
while member countries appreciated India's overall policy 
stance, it was critical to act on each item before the 
September 4-5 meeting of the Nuclear Suppliers Group to give 
 
NEW DELHI 00002297  004 OF 004 
 
 
countries recent actions to cite in justifying their support. 
MULFORD