VZCZCXRO4806
RR RUEHAST RUEHBI RUEHCI RUEHDBU RUEHLH RUEHNEH RUEHPW
DE RUEHNE #2558/01 3580705
ZNR UUUUU ZZH
R 240705Z DEC 09
FM AMEMBASSY NEW DELHI
TO RUEHC/SECSTATE WASHDC 9014
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RHEHAAA/WHITE HOUSE WASHDC
RHEHNSC/NSC WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC

UNCLAS SECTION 01 OF 03 NEW DELHI 002558 
 
SENSITIVE 
SIPDIS 
 
USDOC FOR ITA/MAC/OSA/LDROKER/ASTERN/KRUDD 
DEPT PASS TO USTR MDELANEY/CLILIENFELD/AADLER/JGRIER 
TREASURY FOR OFFICE OF SOUTH ASIA MNUGENT 
USDA PASS FAS/OCRA/RADLER/BEAN/FERUS 
STATE for SCA/INSB, EEB/TPP, EEB/MTA 
 
E.O. 12958: N/A 
TAGS: EIND ETRD ECON EINV IN
SUBJECT: Industry, GOI on WTO, Government Procurement, SAFTA 
 
REFS: A) STATE 123787, B) NEW DELHI 2280 
 
¶1. (SBU) Summary:  The Federation of Indian Chambers of Commerce and 
Industry (FICCI) Assistant Secretary General Manab Majumdar, who is 
responsible for trade policy, said FICCI is a strong believer in the 
World Trade Organization (WTO) and understood that India would be 
poorer without a Doha Development Agenda (DDA).  He sounded a 
familiar theme, saying all countries were looking for the United 
States to take a leadership position on DDA, feeling that trade 
issues are not a priority for the Obama Administration.  Majumdar 
suggested the United States announce a concrete trade policy early 
in the new year and confirm Michael Punke soon as U.S. Ambassador to 
the WTO.  He expressed skepticism about progress on sectorals but it 
appears the GOI is examining the possibility in certain sectors. 
Majumdar explained that FICCI planned to take action in the next two 
months to work on the WTO Government Procurement Agreement (GPA), 
perhaps by starting a working group that includes domestic IT 
companies.  He opined that the GOI is more likely to sign the 
multilateral GPA than just include government procurement in a free 
trade agreement with the EU.  Majumdar said the business community 
is not the problem inhibiting efforts to deepen the South Asia Free 
Trade Agreement (SAFTA).  Separately, the Indian auto industry 
expressed interest in creating a South Asia Association for Regional 
Cooperation (SAARC) automotive forum, noting that U.S. companies 
could help to overcome Pakistani opposition.  End summary. 
 
How to Make Progress on Doha 
---------------------------- 
 
¶2. (SBU) On December 17, FICCI Assistant Secretary General Manab 
Majumdar told Econoff and Econ Specialist that he had joined the 
Indian delegation to Geneva for the November 30 to December 2 WTO 
Ministerial.  Majumdar said the FICCI WTO task force was launched 
last year, because FICCI is a strong believer in WTO and understood 
that India wouldbe poorer without a DDA.  Econoff made some of the 
points in Ref A about the USG desire for an ambitious and balanced 
Doha agreement.  Majumdar confirmed that Secretary Khullar had 
chaired the FICCI-hosted National Stakeholder Consultation on WTO 
Negotiations (8-9 December 2009), in conjunction with the United 
Nations Conference on Trade and Development (UNCTAD) and the Centre 
for WTO Studies, which publishes the schedule for such consultations 
on its website (http://wtocentre.iift.ac.in/).  He said that 
diplomats had not been invited to the meeting, as it was more 
intended for domestic stakeholders. 
 
¶3. (SBU) Majumdar said all countries were looking for the United 
States to take a leadership position on DDA, feeling that trade 
issues are not a priority for the Obama Administration.  He added 
that the perception is that the United States is not doing much 
other than asking for concessions from Brazil, India, and other 
developing countries.  While no one expects the United States to be 
the only country making concessions, the United States and India 
should both agree to no special exceptions.  Majumdar was not very 
hopeful for conclusion of the DDA in 2010.  To make progress on 
Doha, the United States would need to bring trade issues to the 
center stage and announce a concrete trade policy early in the new 
year.  It would also help in terms of optics if Michael Punke were 
confirmed soon as U.S. Ambassador to the WTO.  Majumdar noted he 
believed that the U.S. should make clear offers on agricultural 
subsidies, come to convergence on the Special Safeguards Mechanism 
(SSM), and push along services negotiations.  He recognized that the 
United States may not be in a position to offer many concessions on 
services because of security concerns.  Majumdar added that 
observers understand that India will probably accept a coefficient 
(for cutting tariffs based on a WTO formula) of 20-22, which is a 
big improvement on the earlier offer of 35.  On agriculture, SSM is 
the big problem not tariffs.  India would take two-thirds of the 
tariff cut that is offered by developed countries, which would not 
be an issue in negotiations, Majumdar opined. 
 
Sectoral WTO Agreements 
----------------------- 
 
¶4. (SBU) Majumdar said that sectorals are a serious roadblock to 
progress in the DDA that FICCI had discussed with the U.S. National 
Association of Manufacturers and EU industry groups, but he lamented 
they could not come to agreement.  Econoff raised that the media had 
reported that Commerce Joint Secretary Amarendra Khatua had said 
India might consider sectorals in certain areas during the 
stakeholders meeting at FICCI, which Majumdar acknowledged was true. 
 
NEW DELHI 00002558  002 OF 003 
 
 
 Separately, on December 18, Sachin Sharma, Consultant at the Centre 
for WTO studies, mentioned to Econ Specialist that the Centre had 
recently been tasked to draft papers on some (unspecified) sectors. 
Then, on December 21, in another meeting Econoff asked Khatua if he 
had raised the prospect of sectorals in gems and jewelry and certain 
chemicals, where India is competitive (implying that he would also 
have to give on other sectors).  He offered to discuss this in 
detail in early January and passed Econoff a paper with GOI analysis 
on the WTO Information Technology Agreement. 
 
WTO Government Procurement Agreement 
------------------------------------ 
 
¶5. (SBU) Majumdar said that focus on the GPA came to the forefront 
with the global economic crisis, when India could not get access to 
"Buy American" and other buy local programs.  But he asserted it is 
losing momentum now, nevertheless, FICCI would like to take some 
action in the next two months.  FICCI coincidentally had an internal 
discussion on this very topic the day before, Majumdar added. 
Econoff explained some of the benefits of joining the GPA, including 
gaining access to $800 billion in U.S. federal procurements. 
Majumdar acknowledged that India stands to gain more than the United 
States if it signs up for the GPA.  Large Indian information 
technology companies would be some of the biggest beneficiaries.  No 
domestic companies had reached out to FICCI about GPA, but FICCI 
planned to reach out to IT companies to perhaps form a working 
group.  Majumdar agreed that if a U.S. multinational corporation 
decided to fund an independent study on the benefits of the GPA, it 
would be helpful.  (Note: local Microsoft staff told Econoff on 
December 8 that Microsoft planned to fund such a study at a think 
tank, like the Centre for Policy Studies; Majumdar was clearly aware 
of this.)  But he added that a local law firm would do a better job 
than a think tank, because of the technical expertise needed.  The 
EU has put a lot of pressure on India in free trade agreement (FTA) 
negotiations to include aspects of government procurement.  Majumdar 
thought the GOI would probably implement a government procurement 
agreement multilaterally, rather than just bilaterally with the EU. 
But he added that including sub-national procurement in any GPA 
would "never work."  Majumdar was not aware that the GOI had started 
consultations with the states on GPA, as he thought India could 
request exceptions to much of the agreement below the federal level 
(Ref B).  Econoff indicated that it seemed unlikely to be able 
exempt such a large part of domestic procurement. 
 
SAARC/SAFTA:  Private Sector is Not the Problem 
--------------------------------------------- -- 
 
¶6. (SBU) Majumdar said the business community is not the problem 
inhibiting efforts to deepen SAFTA.  He confirmed a statement made 
by Tariq Sayeed at the SAARC Economic Summit on December 11 that 
Sayeed had helped smooth out problems with Pakistan after a FICCI 
report came out recommending economic sanctions against Pakistan in 
the wake of the November 2008 Mumbai terrorist attacks.  Majumdar 
noted that it makes sense to view India as South Asia's gateway to 
the rest of Asia from a purely geographical perspective.  India is 
the best hub or starting place for any company wanting to do 
business in the region, because of its central location. 
Separately, on December 15, Dilip Chenoy, Director General of the 
Society of Indian Automobile Manufacturers (SIAM), told Econoff he 
would like to establish a SAARC automotive forum like the one in the 
Association of Southeast Asian Nations (ASEAN), but it was not yet 
possible because of Pakistan.  Outside help, from U.S. companies for 
example, to establish this would help, he added.  Chenoy said U.S. 
companies stand to gain a lot from the South Asian market.  He said 
India exports no cars to Pakistan (not even through Dubai) and that 
he had tried to work with the Pakistani auto association but they 
did not take his advice, and he did not want to appear too pushy. 
 
 
Comment 
------- 
 
¶7. (SBU) FICCI is known to be very skeptical of the benefits of the 
DDA, but the organization has been making a number of efforts lately 
to try to promote constructive engagement on the issue.  It hosted 
WTO Director General Pascal Lamy during the September 3-4 Doha 
"Mini-ministerial" conference in New Delhi.  FICCI also hosted a 
December 4 International Chamber of Commerce Regional CEO Forum, 
where there was extensive discussion of Doha and the relationship 
between trade and employment.  It is also promising that FICCI plans 
 
NEW DELHI 00002558  003 OF 003 
 
 
to work with domestic industry to promote the GPA.  Recent press 
reports that Infosys, Wipro, and other Indian IT companies are 
setting up operations in the United States to take advantage of the 
government procurement market will also bolster the case for GPA 
with domestic Indian industry. 
 
Roemer