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Cablegate: Scenesetter for Admiral Fallon,S April 13-16 Visit

This record is a partial extract of the original cable. The full text of the original cable is not available.



E.O. 12958: DECL: 04/05/2015

Classified By: Ambassador David Mulford. Reason 1.5 (B,D)

1. (C) Summary: Admiral Fallon, we welcome your upcoming visit to India, coming at a time of excellent relations in a fast maturing defense cooperation relationship. You also come soon after Secretary of State Rice's first visit last month, which has been characterized as the most successful visit of any US Secretary of State. Secretary Rice proposed a new and greatly expanded strategic relationship, specifically based on the US pledging to help India realize its vision to become a world power in the 21st Century. Secretary Rice proposed a number of new initiatives on her

trip, including: starting a strategic dialogue to discuss global security problems, and regional issues such as disaster response planning (tsunami), and Nepal and Bangladesh. A newly launched defense initiative will assess India's defense requirements and areas for defense cooperation to include issues of defense transformation and advanced technology. She also proposed starting a high-level dialogue on energy security to include civil-nuclear issues, and a working group to strengthen space cooperation. The Secretary and the GOI also agreed that we will revitalize our

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economic dialogue to address legacy problems and establish conditions to enable robust growth in exports and investments. She also conveyed the President's invitation to Prime Minister Singh to visit Washington this summer. Secretary Rice also indicated that the US Government will

authorize American firms to compete in a tender for the purchase of 126 multi-role combat aircraft, including the F-16 and F-18. This visit has produced the most substantial agenda for US-India cooperation ever. As the first senior level visitor following Secretary Rice, your views and public comments will be closely scrutinized by the media and GOI officials looking for clues as to how we will fulfill the Secretary's ambitious vision and how quickly we will move
SIPDIS forward.

2. (C) President Bush and Prime Minister Manmohan Singh agree that Indo-US relations have ""never been as close as they are at present."" Expanded defense cooperation has been integral to our growing ties. We expect your interaction with Admiral Prakash and other defense and government officials will present new opportunities to build on our existing military cooperation and to help fulfill President Bush's vision of a long-term strategic partnership with India. Following Prime Minister Singh's likely visit this summer, we expect President Bush to visit India either late in 2005 or early 2006. End Summary.

Defense Cooperation

3. (C) Military ties have developed into one of the most important and robust aspects of the US-India bilateral relationship and have often led the dramatic improvements in relations that we have witnessed since the end of the Cold War. However, these ties can only truly prosper within the context of the larger bilateral relationship. Cooperation is still coordinated through the architecture set forth in the Indo-US Agreed Minute on Defense Relations signed in 1995, which specified PACOM as implementing organization for Service-to-Service programs. The USD(P) Co-Chairs the Defense Policy Group (DPG), the highest coordinating body for cooperation. The DPG last met in June 2004, and we hope to schedule the next DPG this summer. PACOM co-chairs the Military Cooperation Group along with India's Integrated Defense Staff. The IDS (established well after the 1995 Agreed Minute) also has a relationship with the US Joint Staff. Perhaps the DPG should reexamine the basis, structure, and methodology for military engagement with India as envisioned under the Minute, and in light of Secretary Rice's newly proposed framework, as well as changes

within India's military since the Minute was signed.

4. (C) The US and India currently enjoy an unprecedented level of military cooperation, thanks mainly to PACOM's efforts and resources. The framework laid out by Secretary Rice promises to take that security relationship to new levels, including cutting edge issues of defense transformation such as co-production, early warning systems, and command and control systems. We now routinely engage in mil-mil exercises of growing scope and sophistication. I was pleased to attend the USN hosted reception for the MALABAR 2004 Naval Exercise, which included the first visit of a US nuclear powered warship to India, the first use of the newly developed USN-IN Standard Operating Procedures (SOPs), our first sub vs sub exercise, and the first use of the Navy Fuels Transfer Agreement. I also attended an excellent Army exercise at the Jungle Warfare School in India's North-East. In another example of our growing exercise program, during Cooperative Cope Thunder in July 2004, the Indian Air Force deployed four Jaguars and an IL-76 tanker to Alaska - as a demonstration of their newly acquired tanking capability. These exercises, and numerous others, were well covered in the Indian press and viewed as opportunities for the Indian military to demonstrate their professional prowess and to gain credibility as a regional power. Our recent mil-mil cooperation in tsunami relief in Sri Lanka and elsewhere can provide a template for what we expect will be increased Indo-US cooperation to manage crises and address common threats in the region from Southeast Asia to the Arabian Gulf and East Africa.

Defense Equipment Sales--Underexploited

5. (C) Although our military sales relationship remains underdeveloped, the GOI's serious consideration of US suppliers for its next generation multi-role fighter reflects a new willingness to consider the US for a major hardware purchase. (Secretary Rumsfeld's engagement was critical to our ability to bid for this tender.) Since final procurement decisions will be made at a political level, continued senior engagement will be necessary to succeed in this mission. Despite some political backlash following the US announcement of F-16s to Pakistan, we expect to receive the RFP on the Multi-Role Combat Aircraft competition in the next 1-2 months. US arms sales have struggled to overcome the perception that the US is not a dependable partner (based on our past sanctions), and heavy competition from the Russians, Israelis, and French for a very price sensitive customer. We believe a significant contract would further cement Indo-US defense ties. We continue to see serious potential for the sale of P-3C Orions, and the chance to compete for multi-role combat aircraft. During Admiral Prakash's recent visit to the US he indicated a strong desire to move quickly on acquisition of P-3Cs, even requesting leasing two P-3's as an interim solution. In 2004 the Indian Navy signed a LOA for Deep Submergence Rescue Vehicle services worth $700,000 and they have indicated a desire to test this capability as soon as possible. The recently enacted budget includes a 7.8 percent increase for the military to fund ongoing modernization and purchases. Up to this point the major arms sales have remained 200 million USD for 12 An-TPQ-37 Firefinder Radars, and 14 USD million worth of Special Forces Equipment.

6. (C) Senior Indian officials, however, remain concerned and Defense Minister Pranab Mukherjee reminded observers that 'for us, the two main criteria are dependence as a source of supply and transfer of technology' during a visit the Aero-India aviation show in January 2005. Unfortunately, there is still no galvanizing example of a major defense procurement deal to inspire confidence. We hope the P-3C contract will help build Indian trust. (See paras 43-48 for more details).

Your Host, Admiral Prakash

7. (C) I think you will find Admiral Prakash to be a highly professional and thoughtful officer, well disposed toward the United States, and progressive in his thinking. He just returned from his counter-part visit to the US, hosted by the CNO. (He also attended school with Admiral Walter Doran). His visit to CONUS (and then PACFLEET) was successful and indicated a strong desire to expand the relationship through hardware purchases, training, and Naval institutional linkages. He will be direct and engaging in conversation. He attended the US Naval War College, graduating in 1990. He has fond memories of his time in Newport, and during his visit took the opportunity to speak at the college. Admiral Prakash is a Naval Aviator with 2,500 hours of flight time. He attended flight training in the UK and was the first commanding officer of an Indian Navy Harrier squadron. He has commanded four ships including the Indian Navy aircraft carrier INS Viraat. He was promoted to flag rank in 1993 and as a Rear Admiral served as the Commander of the Eastern Fleet. As Vice Admiral he served as the Commander-in-Chief, Andaman Nicobar Command (India's only operational joint command), and Commander-in-Chief, Western Naval Command. He was appointed Chief of Naval Staff and promoted to Admiral in August 2004 and became the Chairman of the Chiefs of Staff Committee (roughly analogous to CJCS) in January 2005.

8. (C) Admiral Prakash leads a highly professional, regionally dominant Navy with growing capability and blue water aspirations. Most importantly, India shares many of our key maritime concerns - maritime terrorism, use of the seas for proliferation of WMD, safety of sea lines of communication (particularly for Arabian Gulf Oil), piracy, smuggling, and un-regulated dhow traffic. Regrettably, we expect Admiral Prakash's leadership will be somewhat constrained by a lumbering and sometimes corrupt bureaucracy (particularly in procurement), a coalition government that includes representation of two regional Communist Parties, and some old-think (in a few cases anti-American) government officials. We ask that you join us in continuing to search out practical, mutually beneficial ways to expand military cooperation, understanding that this is part of a long term effort to build a substantial, reliable, mutually beneficial 21st century partnership with India. A priority in this area is to bring India into the Proliferation Security Initiative (PSI), since it has unique assets it can bring to bear in this region.

""Jointness"" and Chairman, Chiefs of Staff Committee
--------------------------------------------- ------

9. (C) As the senior of the three Indian Service Chiefs, Admiral Prakash is the default Chairman of the Chiefs of Staff Committee. His two main charters are first, to represent the combined service's opinion on major defense issues to the central government and MOD. Second, he supervises India's four year old Integrated Defense Staff (IDS)-India's Joint Staff, whose role and authority are still evolving. The Chief of the Integrated Defense is Vice Admiral Raman Puri, who directs the daily operations of the IDS, and who reports to Prakash. There is no Indian ""Goldwater-Nichols"" Act to drive ""jointness"" in their system and the GOI has again deferred its decision on appointment of a four star Chief of Defense Staff who would in efect,b in charge of all military matters. Thus, each sevice chief still commands and controls his servie. Three joint organizations that fall under theIDS are Andaman and Nicobar Command, Strategic Frces Command, and DIA.

10. (C) During its development, the IDS had counterpart talks with joint staffs from US, UK, Italy, Japan, Australia, and Germany. The IDS borrowed ideas mainly from US and UK models. The main challenges facing the IDS are establishing an operational role, drafting a joint doctrine, gaining sway over defense budget priorities, and incorporating joint intelligence efforts. Fundamentally, the single services drive each of the service's war planning and execution--there is still no approved joint doctrine for the Indian armed forces.

Asymmetries with US System

11. (C) India has no direct counterpart to the Marine Corps or to joint special operating forces as embodied in the US SOCOM; high-level joint headquarters are not as integral to the Indian military hierarchy as they are in the US system. These asymmetries add substantially to the coordination and planning burden required of any bilateral activity (deciding how to engage multiple Indian services in order to take advantage of a US Marine unit passing through the Indian Ocean, for instance.) Such challenges can be and have been overcome with imaginative staff work, but they are not inconsiderable; they can impose additional preparation time and require persistent attention even when they are focused on training or exercises that address the highest priorities on the Indian agenda (such as special forces exchanges).

Bureaucratic systems

12. (C) Bureaucratic structure has also been an obstacle on the Indian side. Given their limited roles in the Indian governing establishment, the MoD and the services have not traditionally had a large foreign policy function. Moreover, until the opening of US-India defense engagement in the 1990s, India had never had a bilateral defense relationship of the type the US has developed with dozens of friends and allies. The Indian link with the USSR was centered on hardware, technical training and logistical support; it did not encompass the broad array of exercises, exchanges, discussions and military sales that the United States considers part and parcel of a normal defense relationship. There is thus an organizational asymmetry between us with no Indian counterparts to the policy offices and the staff sections specifically designed to conduct interaction with foreign militaries that are found in the US DoD, the Joint Staff, the Service headquarters and the Combatant Commands. This structure poses a capacity challenge on the Indian side that can impede progress and delay potentially fruitful cooperation. Among other things, this means that we have to calculate how much cooperation the Indian structure can manage at any one time and that excellent short-notice opportunities can be lost because the Indian side is not staffed to cope with manifold activities without extended lead time.

Lumbering process

13. (SBU) The Indian bureaucracy is large and slow moving. Every case revolves around a ""file"" that contains everything related to the case and which must physically move from one agency to another for approval. There is little delegation of authority, so decisions of any importance are made at very high levels. (The Prime Minister himself decided on India's MPAT participation with CSF-536 during tsunami relief operations.) In general, decisions are made by committee, which diffuses responsibility and is a legacy of past arms scandals. One by-product of past arms scandals is that the Indians are beginning to prefer FMS to DCS for defense sales because government-to-government transactions have less potential for allegations of corruption.

Intelligence Exchange Agreements

14. (S/NF) The overarching intelligence exchange agreement is ""Morning Dew"" signed in July 2003 between our two DIAs. There have been two intelligence exchange conferences between the DIAs, but little progress has been made in the routine flow of information from the Indian side mainly due to India's DIA's slow institutional development and challenges in its relationship with India's three service intelligence organizations. Moreover, US Foreign Disclosure policy limits us from exchanging information most desired by the Indians-such as information on Pakistan, Nepal, and Bangladesh.

15. (S/NF) We have been exchanging intelligence information with the Indian Navy under the Morning Dew agreement on issues such as suspect merchant vessels, and information on China. Although we provide information to the Indian Navy routinely through the bilateral (secret rel India) circuit, they have provided little in return. For their part, the Indian Navy has voiced dissatisfaction with the type of information provided. They routinely request ""actionable"" intelligence. During RADM Porterfield's 9-12 January visit the Indian Navy was provided with detailed information about two high interest vessels. The Indian Navy responded quickly with useful information regarding one of the vessels (in an Indian port) and promised more to follow. They recently provided photographs of the Chinese heavy l)vll have moved to a new and ar more satisfying level of cooperation.

Benefits of Defense Engagement with India
16. (C) Secretary Rice's visit highlighted the US strategic objective of strengthening India's role as a major world power. At the regional level, good military-to-military ties can contribute to US interests in combating terrorism, fostering regional stability, securing sea lines of communication through the Indian Ocean, rebuilding Afghanistan and countering the spread of narcotics. Similarly, enhanced US-Indian military cooperation supports humanitarian operations and peacekeeping actions in the regions adjacent to South Asia.

17. (C) As demonstrated by collaborative efforts over the past decade, some of the benefits from expanded cooperation will be tangible and will manifest themselves in the near-term. Joint US-Indian naval patrols in the Straights of Malacca during 2002, coordination of tsunami relief operations, and coordination of policies regarding the vicious Maoist insurgency in Nepal stand out as three examples of recent interactions where US and Indian militaries have played an important role in developing and implementing national policy with near-term impact.

18. (C) Likely Indian Subjects May Be Raised During Your Visit

--Desire to expand US-India defense cooperation and the agenda for our new dialogue on defense transformation and interoperability --Major US Arms Sales to Pakistan and their impact on the Composite Dialogue --Pakistan's role in supporting terrorists against India --Greater/more rapid access to US Defense Technology --Access to Net-Centric Command and Control technologies and doctrines --Desire for regular interaction with CENTCOM & NAVCENT --More Coordination on military assistance to Nepal --Greater Indian role in Afghanistan --Cautious attitude on Iraq --Cooperation on energy security in the northern Indian Ocean. --Indian Ocean Security --Better/more effective exchange of ""actionable intelligence"" --Prospects of a full time India LNO at PACOM and CENTCOM --Acquisition Cross Servicing Agreement

Political Background

19. (C) PM Singh's Congress Party came to power in an upset election victory over the BJP-led coalition in May 2004. Although Singh's senior advisors had been out of power for eight years, they wasted no time articulating their priorities for India's foreign and defense policies. They have stressed that an expanded and mutually beneficial partnership between India and the US on regional and transnational security issues is a high priority for the new government. Defense Minister Pranab Mukherjee sees practical advantage in cooperating with the US to modernize India's military equipment and strategy while advocating transparency in defense acquisitions. Foreign Minister Natwar Singh, who will be in Washington to meet Secretary Rice during your visit, has also moved much closer to the US, stepping away from his historical views on non-alignment.

20. (C) As noted in ""The Congress Agenda on Security, Defense, and Foreign Policy,"" the Party seeks to improve the function and transparency of India's natL7G t#QSQ concentrated national security decision-making largely in the Prime Minister's office, Congress has a more diffuse, transparent, and collective approach which utilizes a resuscitated National Security Council (NSC), expanded Cabinet Committee on Security (CCS), and reenergized Strategic Policy Group (SPG) and National Security Advisory Board (NSAB).

21. (C) Coalition governments are likely to be the norm in India's parliamentary democracy for the foreseeable future, so senior Indian leaders will be sensitive to events that can be portrayed as foreign policy failures or miscalculations by its domestic opponents. Potential problem areas for the ruling party include military-to-military activities. Although most of these activities are considered routine by US audiences in the Congress and in the broader public, they can become lightning rods in India. The failure to acquire a high-profile item of hardware or technology, for example, or the appearance of sacrificing India's cherished foreign policy autonomy in some way can create frictions inside the ruling coalition or can be used by opposition parties to attack the government for staking too much on relations with the United States.

22. (C) Defense Minister Mukherjee, an economist and former Foreign Minister with little defense background, will likely acquiesce to the collective Congress leadership (include Sonia Gandhi, who remains the ultimate power or matters of domestic politics) on matters requiring broad consensus. A proponent of maintaining strong mil-mil tis with Russia, we expect Mukherjee to adhere to he larger Congress agenda toward the US by contiuing to move US-India defense ties forward, albet with less supportive public rhetoric than the BP, out of deference to the leftist parties. He ma visit Washingtn and he Pentagon in late June.

Next Steps in Strategic Partnership

23. (C/NF) On Septemer 17, 2004 the US and India signed Phase One of he President's ""Next Steps in Strategic Partnersip"" (NSSP). The NSSP lays out an ambitious path o cooperation in four strategic areas: civil nucear energy, civilian space programs, high-technoogy commerce, and dialogue on missile defense. Tese areas of cooperation are designed to progress through a series of reciprocal steps that build on each other. Completion of Phase One has enabled the US to make modifications to US export licensing policies that will foster cooperation in commercial space and civilian nuclear energy programs, remove the headquarters of the Indian Space Research Organization (ISRO) from the Department of Commerce's ""Entities List,"" and offer an FMS sale of the PAC-2 missile defense system. On February 22, the GOI received a classified briefing on the capabilities of the PAC-2 GEM PLUS missile defense system as a deliverable for successful completion of Phase One. The Indian government has now requested a missile defense technical cooperation agreement of the sort we have with other key allies. This month, three Indian's will observe the Roving Sands MD exercise in Texas at the SECRET level. In his role as Chairman, Chiefs of Staff Committee, Admiral Prakash will have a role in shaping Indian nuclear and missile defense policy. We believe his recent visit to NORAD was proposed by the Indian Navy specifically to offer Admiral Prakash a view of US policy in these areas.

24. (S) Phase Two of the NSSP requires intensive efforts by the GOI to adopt national legislation governing technology transfer, adhere to the Missile Technology Control Regime and Nuclear Suppliers Group guidelines, and strengthen export controls. The GOI has promised movement on these issues. In turn, the US commits to undertake new cooperation on US-Indian commercial satellites, approve the sale of the PAC-2 system and offer a classified briefing on the PAC-3 system. Until now, the Indian Ministry of External Affairs (MEA) has the lead in this effort, with the MOD playing a supporting role.

Tsunami Relief


25. (C) The Indian military reacted exceptionally well to the recent tsunami disaster. The rapid and effective deployment of resources to Sri Lanka, the Maldives and later Indonesia, in addition to India's hard hit Andaman and Nicobar Islands clearly demonstrated India's regional force projection capability. At the peak of operations, the Indian Navy had 31 ships, 22 helicopters, four aircraft and 5,500 personnel assigned to disaster relief. The Air Force, Army and Coast Guard were just as heavily involved. The Indian military was hit hardest on the island of Car Nicobar. The Indian air force lost 103 personnel on this island and the Navy lost about half that. During the operation, the Indian Navy converted three hydrographic ships to 47 bed hospital ships (a design feature of the class) and sailed them to Sri Lanka, Indonesia and Chennai, India. During the relief effort the Indian military was unusually responsive to questions about their intentions and provided almost daily briefings. We reciprocated with the PACOM force lay down. The Indian government also coordinated closely with us as a founding member of the Tsunami Core Group. Later, India provided two MPAT planners to CSF-536 in Utapao, Thailand and sent a liaison officer (Indian Naval Attache in DC) to PACOM Hqs and a liaison officer to CSF-536 (Indian Air Attache in Bangkok). This exchange of information assisted both countries in channeling relief to those areas most in need while avoiding duplication of effort.


26. (C) Despite skepticism among some strategic commentators, New Delhi continues to express interest in the Proliferation Security Initiative (PSI) and other maritime security initiatives, but not as a junior member and not without concern about possible contravention of international maritime conventions. The GOI continues to inquire about the status of the PSI Core Group, suggesting India be offered Core Group membership (or that the Core Group be disbanded) before it will consider participation in the initiative. We are urging Washington to respond to India's approaches, believing that PSI is a vehicle for bringing India into the global counter-proliferation community and changing India's historic role as a regime outsider. In contrast, the GOI has already agreed to join the Container Security Initiative (CSI). This may be a stepping-stone toward greater cooperation with India on other maritime security issues, outside the political obstacles posed by PSI. Indian Navy leaders see Regional Maritime Security Initiative (RMSI) as an interesting concept that has yet to take shape.

Cooperative Security Locations (CSL)

27. (C) DoD is looking to extend its air transportation fleet reach to world regions that to a great extent were previously unconsidered. Indian airfields and ports hold tremendous potential for CSLs. However, we have not broached this idea with the GOI, nor do we think it can soon be deployed during this divided political climate in Delhi. We believe the ACSA with India has remained hung up within the Indian system because of concern that ACSA implies granting basing rights. We spend a great deal of energy disabusing them of this misconception. We are close to resolution on ACSA, but the idea of CSLs would be political dynamite here as the opposition parties and left would exploit this against the ruling party. We still have a difficult time gaining approvals for PACAF TERPS to access airbases because of Indian security sensitivities.


28. (C/NF) While India and Pakistan are currently in their most intense period of dialogue in decades, the GOI continues to place a high priority on containing Pakistan's nuclear threat. Following the positive Indo-Pak Foreign Ministers' talks (dubbed the ""Composite Dialogue"" or ""CD""), the successful Singh-Musharraf meeting in September, and an attempt at developing a ""Kashmir Roadmap"" based on the PM's first visit to Kashmir in November, a mood of cautious optimism has emerged in India that Islamabad and New Delhi have indeed started on a path of sustainable rapprochement. During these recent CD meetings, India put forward a total of 72 CBMs, of which Indian FM Singh and his Pakistani counterpart FM Kasuri agreed to 13 including to: continue the LOC ceasefire; conduct a joint survey of the International Boundary along Sir Creek; implement the outcome of the August meeting of Defense Secretaries regarding the Siachen Glacier; and discuss trade cooperation. The Ministers also agreed to technical talks on conventional and nuclear CBMs among other issues during the fall. As expected, the two sides disagreed on infiltration levels and the centrality of Kashmir, but have expressed commitment to continue their dialogue on these issues. The February 16 agreement to begin bus service between Srinagar and Muzaffarabad beginning April 7 has been hailed as the most important Kashmir-specific CBM since the November 2003 ceasefire.

29. (S) Despite Indian allegations of mortar firing by Pakistan against Indian positions along the LOC twice in three days (January 18 and 20, 2005), both governments responded in a measured and serious manner, conscious that the 16 months of silence" " along the LOC had come to symbolize the de-escalation of the Indo-Pak conflict, while providing tens of thousands of Kashmiris the longest respite from daily shelling since the 1999 Kargil War. The ceasefire, the first formally observed in peacetime between the two countries since 1947, has fueled hopes for broader progress in military CBMs. These instances of shelling, if they resume, could spill over into the Composite Dialogue and negatively affect the broad sense of goodwill that exists in India for fixing relations with Pakistan.

30. (C/NF) Despite positive progress on these pending issues and growing acceptance of ""de-hyphenating"" America's relationships with the two neighbors, the recent US decision to provide F-16 to Pakistan has brought long-held fears to the fore again. The widely-held view in India is that such weapons are inappropriate for destroying terrorist assets and that Islamabad ultimately seeks F-16s as a nuclear weapons delivery system to be used against New Delhi, thereby sparking a regional arms race. Moreover, Indians often complain of a lack of balance in US policy which Indians believe favors Pakistan. The US is seen as soft on proliferation issues regarding Pakistan and harsh in its judgment on India. The fear among the Indian security and military establishment is that new weapons for Pakistan will cause Pakistan to become more aggressive against India. Secretary Rice's far reaching initiatives helped mute Indian
SIPDIS criticism of the announcement of F-16s for Pakistan, but you should expect to hear criticism from your interlocutors.

Siachen Glacier

31. (C) In 1984, India and Pakistan occupied parts of the Siachen Glacier and the Saltoro Ridge, which became the highest altitude battleground in the world. Siachen is politically relevant as it is linked to unresolved border disputes with Pakistan and China. This remote region lacks military strategic relevance, leading many Indians to question the economic cost of such a burdensome deployment. In 1994, in an effort to lower tensions, New Delhi and Islamabad almost reached an agreement on demilitarizing the Glacier. If redeployment/demilitarization along the Siachen Glacier were to take place, monitoring mechanisms would need to be implemented to provide both sides confidence that reoccupation of the ridge lines was not occurring. The cease-fire along the LOC on the Glacier, in effect since November 26, 2003, remains in effect, and the two sides continue to discuss the matter as part of the Composite Dialogue. India's main demand is that positions currently occupied by both armies be verified prior to any reciprocal withdrawal.


32. (C) On Afghanistan, India has backed up its strong political support for President Karzai with generous economic assistance (over $500 million). India provided in-kind assistance for the October elections, has offered to assist in training Afghan diplomats, army, and police, and has committed to construction of a power line connecting Kabul to Baghlan province in the north. With the imminent completion of the GOI program to outfit the ANA with military vehicles, New Delhi is now assessing what more India might do to assist with the Afghan Army's development.


33. (C) India views Iran as a source of energy, a corridor for trade to Central Asia (most importantly to Afghanistan), a partner in stabilizing Afghanistan, and as a counterweight in Pakistan's regional calculations. Increased high-level exchanges and intensified cooperation in the energy sector illustrate the degree to which the GOI values the relationship. There has been considerable movement recently in the Indian position on the proposed Iran-Pakistan-India pipeline. India has removed its Most Favored Nation and transit corridor conditions and given Cabinet backing for the Petroleum Minister to negotiate with Iran and Pakistan. At the same time, the GOI is strongly opposed to Iran's acquisition of nuclear weapons. New Delhi is pursuing a low-key but engaged policy toward Iran, attempting to achieve its strategic goals in the Gulf without jeopardizing its growing ties with the US or Israel. New Delhi portrays itself as a moderating influence on Tehran, particularly on nuclear issues where Indian and US interests on nonproliferation converge. I have outlined for India's energy minister the USG's concerns about large scale energy cooperation with Iran because such cooperation could bolster Iran's support for terrorism with its efforts to acquire WMD.


34. (C) New Delhi responded swiftly and with unusual firmness to King Gyanendra's February 1 decision to dissolve the multiparty government in Nepal and reserve all power for himself, calling the action ""a serious setback to the cause of democracy."" The GOI has expressed a strong desire to coordinate with the United States as the situation unfolds in Kathmandu and remains concerned about the effect of the King's actions on the ongoing Maoist insurgency. Prior to these developments, New Delhi had expressed concerns about the Maoist influence in Nepal, the potential for violence and political instability to spill over into India, and repercussions for Indian interests in Nepal. The US and GOI have coordinated closely in response to the coup, providing a template for the sort of security partnership we would like to apply elsewhere. Although we have not joined India in publicly declaring a suspension on supplies of weapons, the US and India broadly agree on the problem and the way forward.


35. (C) The wave of terrorist attacks in early October in the northeastern Indian states of Nagaland and Assam are raising alarms that violence and political instability in Bangladesh are now affecting India, courtesy of the United Liberation Front of Assam (ULFA). These follow other incidents such as the August attack on former Prime Minister Sheikh Hasina and seizure of a major arms shipment in Chittagong in April. Dhaka has accused New Delhi of contributing to its deteriorating political situation while Delhi maintains that the source of Bangladesh's problems is Islamic fundamentalism and terrorists the GOB is unwilling or unable to control. Despite these differences, both countries' Foreign Ministers recently agreed to work together to address each others' security concerns. The GOI is also considering increasing its deployment of security forces along its border with Bangladesh and constructing a fence, similar to the LOC fence in Kashmir, along the border.


36. (C) The escalating violence in Iraq in 2004, including the taking of Indian hostages in July (who were subsequently released), stories of abuse of prisoners, and inaccurate reports of mistreatment of Indian laborers by US forces and companies in Iraq hardened Indian public opinion against Coalition activities. The GOI, however, has a strong interest in stability in Iraq and wants to preserve its historic cultural, economic and political links with Baghdad. Although their line remains firm against sending troops to Iraq, the GOI has already disbursed half of its $20 million commitment to Iraqi reconstruction, split evenly between the UN and World Bank Trust Funds, and has welcomed ideas of where India might do more. We suggested that India might help Iraq revamp its judicial sector.
37. (C) Despite the GOI's deliberately low profile public and material support in the run-up to the elections, Indian Government, media, and other observers welcomed the successful completion of Iraq's first election on January 30. The MEA called the election a ""noteworthy development"" and reaffirmed Iraq's strategic importance to New Delhi. Circumspect about engaging the interim regime, the GOI will likely engage the new Baghdad government with more conviction, although practical and security concerns and continued opposition from India's left wing parties will present obstacles to a more visible Indian presence in the near future.


38. (U) India's ""Look East"" policy, initiated in the 1990s, envisions India as an equal player in the greater Asian community, ideally and eventually as influential as China. Beijing, on the other hand, does not view New Delhi as a geographic, strategic, or economic peer. The upcoming visit April 9-12 visit of Chinese Premier Wen is likely to give new momentum to Sino-Indian dialogue on the long-standing border dispute between the two countries. While India's direct dispute with China about its border does not present much of a hurdle, China's supply of material and technology to rival Pakistan has been a more formidable obstacle to relations between the two countries. Much of India's political class continues to see China as a long term military, economic, and political challenge if not threat. Booming trade between the two countries is contributing to a softening of long held suspicions, however.


39. (C) By far the largest supplier of military equipment to India for decades, Russia's exceptional military relationship with the country is guaranteed for a long time to come and was reaffirmed by Russian President Putin's December 04 visit to Delhi. The inconsistent quality of Russian-made materiel as well as the difficulty of obtaining spares since the break-up of the Soviet Union are common complaints among the Indian military. The Indians, however, are shopping more on the global market for other sources of weaponry -- namely Israel and France -- to improve their military capabilities. While not reneging on its traditionally strong bond to Russia, the Congress Party has made it clear that more effort must be spent on fostering India's relationship with the US on a variety of fronts, especially in the areas of defense and high-tech.


40. (C) Despite the return to power of India's traditionally pro-Palestinian Congress party, the robust Indo-Israeli relationship established under the previous government does not appear to have lost steam, at least privately. This is largely a result of India's growing reliance on Israel for military hardware, technology, and training, and Israel's streamlined and less public arms sales process. Although official figures are not available, Israel appears to be India's number two supplier of military hardware (behind Russia). Most recently, India signed a $1.5 billion contract for three Phalcon airborne radars. Previous deals included infantry and special forces equipment, UAVs, aircraft avionics, Barak missiles, sensors for defense above the LOC, Green Pine radars, and assorted munitions. New Delhi is also considering acquiring the Arrow ATBM from Israel, and is a strong contender for a multi-billion dollar contract to upgrade and modernize the Indian Army's artillery. Recent reciprocal visits by top brass from both armies are paving the way for the first ever joint military exercises between the two countries which may be held in India some time in 2005. Publicly the UPA government has been less willing to embrace Israel than previous BJP government because of Congress' longstanding ties to the Palestinians.

An Evolving View on Indian Ocean Security

41. (C) Indian Ocean security issues have become increasingly important in GOI strategic thinking as India has become more dependent on foreign sources of energy (primarily oil and natural gas), while deepening its commercial and security ties to Southeast Asia and the Middle East. The Indian Navy considers its area of responsibility to extend from the Strait of Hormuz to the East Coast of Africa to the Strait of Malacca. This strategic perception drives the Indian Navy's desire to interact with US forces outside the PACOM's AOR.

42. (C) During the Cold War, India was highly sensitive to the US presence in the Indian Ocean. Indian think tanks and politicians used to routinely criticize and make issue of the US presence on Diego Garcia. Indian security agencies for decades reported fictitious US efforts to build bases or acquire basing rights in the region. Although some suspicions of USG strategic objectives in the Indian Ocean persist among left wing politicians, intelligence agencies, and old-school defense analysts, there has been a dramatic change in Indian perceptions of both their role and the US role in Indian Ocean security for the following reasons:
A. (C) Today India is more cognizant that their Indian Ocean security concerns can only be met in an atmosphere of cooperation and coordination with regional countries and particularly with the US. They are looking at peaceful non-military areas, such as search and rescue, anti-piracy and smuggling interdiction, where they can lead and influence their regional partners. Participating with the US in exercises, joint patrolling, etc., enhances India's role as a leader in maintaining maritime security in the Indian Ocean.
B. (C) India and the US have common interests in energy security, and the USN plays a critical role in assuring safe oil supplies and freedom of navigation against various threats in the northern Indian Ocean.
C. (C) India has a growing perception that China is attempting to increase its influence around the Indian Ocean. Indians have complained for years about Chinese transfers of military technology and arms to Pakistan and Burma, but now they worry about China's efforts to enhance its ability to protect its sea lines of communication with energy sources in the Persian Gulf. Indian analysts are worried specifically about reports that China has built a radar station for Burma in the great Coco islands (with a good view of the Indian missile test site in Orissa) and is involved in up-grading the port at Gwadar in western Pakistan. China's military infrastructure modernization on the Tibetan plateau completes the encirclement in Indian eyes. The Indian Navy is very conscious of the ongoing modernization and expanding operating area of the PLA(N).

Foreign Military Sales (FMS)

43. (C) Reliability and Responsiveness of the USG are two constant themes you will hear. The Indians remain concerned about the reliability (i.e., no sanctions) and responsiveness of the US as a defense supplier in general, although less so than previously. These concerns emanate from past experience with sanctions and delays in responding to requests for information and pricing data. Four rounds of sanctions over the years have left some within GOI with the impression that the US is not a reliable defense supplier and that we practice ""light switch"" diplomacy. The sanctions that followed the 1998 nuclear tests in particular left a deeply negative impression because they cut off military supplies not just from the US, but also from third party sources that contained US components. On 1 December 2004, Chief of Naval Staff Admiral Prakash sent a letter to Admiral Doran expressing concerns about the status of FMS and security assistance issues. Three main issues raised concern the Sub-Rescue contract, P-3 Orion, and Aviation Training. Admiral Doran replied on 14 January 2005 with details on the status of each program (see below).

44. (U) Aero India the largest aerospace tradeshow in South Asia, took place from 9-13 February 2005 at the Yelahanka Indian Air Force Base in Bangalore. The centerpiece of press attention for Aero India 2005 was the participation of five US military aircraft on static display and fifteen US defense contractors. The US demonstrated the largest foreign presence at this show. Two themes emerged from Aero India: 1) All MoD officials and military personnel were very pleased and impressed with the USG's participation in this event, and 2) There are still serious doubts about the USG's reliability as a defense supplier. Having established the seriousness of US commitment to competing in the Indian arms market, the challenge now is to come to the table in a timely fashion with competitively priced products for a major military platform.

45. (C) P3 Orion Maritime Patrol Aircraft - In response to their request, the Indian Navy was provided P&A data in September 2003 for 8 P-3B(H) Orion maritime reconnaissance aircraft. These aircraft would be brought out of long-term storage and fully refurbished, bringing them up to P-3C Plus capability. The total case value for 8 aircraft with associated weapons, equipment, spares and training would be approximately $1 Billion. When the Indian Navy learned that P-3Cs might be available they expressed interest in these aircraft instead of the P-3Bs. A P-3C aircraft and sensor package has since been cleared for release to India and a weapons package is under development. The US Navy's International Programs Office sent a delegation to New Delhi from February 15-16, to discuss P&A information for P-3C with the Indian Navy. Currently, the US Navy's International Programs Office is exploring Indian Navy requests for the ""hot"" transfer of one or two P-3Cs to the Indian Navy and is exploring the possibility of lowering the total costs of this proposed sale.
46. (C) SH-60 Sea Hawk helicopters - In September 2003 the Indian Navy requested pricing data for the purchase of 16 Sea Hawk helicopters to replace their aging Sea Kings. This P&A data is expected in early 2005. ODC has learned that GOI will probably release a global Request for Proposal (RFP) to meet this requirement. If that happens the Sea Hawk will face stiff competition from French and Russian aircraft, which are likely to be aggressively priced.

47. (C) E-2C Hawkeye aircraft - In July 2003 Northrop Grumman provided the Indian Navy with an open source brief on the E-2C Hawkeye, which led to a request for P&A data for 6 aircraft. This P&A data has just arrived, with a total case value of approximately $1.3 Billion for 6 aircraft and associated equipment. The Indian Navy's interest in the Hawkeye waned however, when they learned that it would not be able to operate from their newly acquired aircraft carrier Admiral Gorshkov. As a result, the Hawkeye sale is on hold for the foreseeable future.

48. (C) Deep Sea Rescue Vehicle (DSRV) - The DSRV case was initially opened in 1997 but was suspended in 1998 due to sanctions. The case was restarted after September 2001. In March 2004, the Indian Navy approved an amendment to the DSRV case and made an initial deposit of $158,425. The total value of the DSRV amendment is $734,443. ODC is currently working gith the Indian Navy to update the DSRV case to allow for modifications to their model 209 submarines so they are compatible with the DSRV. The Indian Navy has indicated their desire to conduct a demonstration of this rescue capability.

49. (C) Excess Defense Articles. On 15 February the Indian Navy was briefed by Navy IPO that the US will be retiring MHC and LPD class ships in FY 2006 and 2007. The Indian Navy has indicated an interest in these vessels and specifically asked that this information be kept confidential (possibly to avoid interference from Indian shipyards).

US-India Joint Exercises Continue to Expand
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50. (C) Since sanctions were waived in September 2001, we have conducted a series of nearly 20 bilateral exercises of increasing scope and sophistication with all three services. The fifth and largest 'Malabar' exercise was conducted from October 1-10 off the south Indian Coast and featured ASW, AAW, SUW, and VBSS exercises. For the first time we utilized the IN-USN Standard Operating Procedures (SOPs) which were perceived to significantly ease the planning process and set the stage for even more sophisticated exercises. These SOPs will be reviewed, enhanced and expanded during the Malabar 05 planning conferences. The exercise also featured the first sub vs sub event, the first port visit of a US nuclear powered warship to India, and the first use of the Navy to Navy fuel transfer agreement (which we hope will ultimately open the door for an ACSA). We have proposed that Malabar 05 include the Indian aircraft carrier Viraat, and Malabar 06 include a US carrier. Despite numerous requests, the Indian Navy has not included a KILO class submarine in any of our exercises.

51. (C) Exercise Flash Iroquois with USN SEALS and Indian Maritime Commandos (MARCOS) was conducted in October 2004 in a training area south of Mumbai. The focus was on ship intervention. Also Indian MARCOS participated in the EOD exercise, Spitting Cobra with EODMU Five in January 2005. Finally, US warships are stopping routinely in Chennai, Cochin and Mumbai for refueling, crew rest and recreation.

52. (C) Future exercises in 2005 will include only the Malabar 05. A Flash Iroquois Special operations exercise involving SEALs was not scheduled due to operational commitments of the SEALs. The planned Search and Rescue exercise (SAREX) has been postponed to CY 2006 due to funding issues (PACFLT) and a desire to conduct a more sophisticated exercise by the Indian Navy. The Indian Navy would like this exercise to include a submarine rescue phase and to actually test the DSRV capability purchased through FMS.

53. (C) USARPAC and SOCPAC have conducted a number of high altitude warfare, CT, and jungle warfare exercises at the platoon level. PACAF has conducted several air exercises to include Para-drop. PACAF's COPE India DACT will be in November in India and feature F-16s, AWACs, and tankers. Air forces agreed on a road map for IAF to participate in REDFLAG exercise in 2006-07. The USMC and the Indian Army have company level exercises this summer at Camp Pendelton and 29 Palms. USARPAC has a plan to raise the level of engagement up to battalion and brigade by 2007.

Port Visits
54. (C) Port visits to India continue at about one per quarter. Last visit was USS Blue Ridge in Goa, 15-18 February 2005. During the July 2004 visit of USS Cushing to Mumbai, the local Foreigners Regional Registration Office (INS equivalent) demanded a ""crew list"" from the ship and, in accordance with policy, the CO refused. The FRRO then refused to process visa applications for two sailors departing on emergency leave. The Charge appealed to the Ministry for External Affairs and was able to obtain the visas. Diplomatic approval for subsequent visits has been contingent on the ship providing a ""Shore Party List"" of names only, of those departing the ship and entering India. Four ships have visited India under this regime without incident. The Indian Navy views this issue as outside their purview.

Non-Combatant Operations (NEO) Planning

55. (S/NF) In time of war or natural disaster as many as 3000 official AMCITs and 50,000 passport holders might become affected. PACOM's and III MEF's NEO Planning for India has evolved rapidly since the near war situation in 2002 resulting in a highly developed on-the-shelf plan. The embassy's NEO planning in coordination with the other four allies has also progressed to a high level. What's left to do is approach the GOI to ask for guarantees for access to bring military equipment and personnel into India during a time of crisis. The tsunami tragedy has presented an opportunity to engage the GOI on issues linked to our NEO planning. We plan to exploit this window to start a dialogue that will lead to engagement on direct questions that support our NEO planning

56. (C) One key administrative goal we need to complete to further advance our defense cooperation programs is completing the ACSA which PACOM has been trying to get signed for close to three years. Embassy has reinvigorated it with Mr Mukherjee several times. USD(P) Feith mentioned it in June during the Defense Policy Group. Mr Feith also mentioned it with Foreign Secretary Saran in September. Recommend you stress with Mukherjee and other officials the importance of getting this signed.

POW-MIA Issues

57. (C) OSD's POW-MIA coordinator has visited India and laid the ground work for future investigations into possible recovery of remains of downed US fliers who flew ""the Hump"" from India across Burma, into China during WWII. Presently three possible recovery sites have been provided to GOI in Indian's North-East. According to US war records, up to 406 personnel may have perished on Indian soil.


58. (C) Once again, we appreciate the opportunity your visit presents and look forward to your arrival.


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