250737            2/25/2010 12:56          10NEWDELHI355      Embassy New Delhi     CONFIDENTIAL                   "VZCZCXRO3079

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RUEKJCS/JOINT STAFF WASHDC"           "C O N F I D E N T I A L SECTION 01 OF 04 NEW DELHI 000355

SIPDIS

E.O. 12958: DECL: 02/17/2020

TAGS: PGOV, PREL, PTER, PARM, KNNP, ENRG, IR, PK, IN

SUBJECT: NSA MENON DISCUSSES REGIONAL SECURITY AND TRADE

ISSUES WITH CODEL MCCASKILL

Classified By: Ambassador Tim Roemer for Reasons 1.4 (B) and (D).

1. (C) SUMMARY.  In a meeting with CODEL McCaskill February 17, National Security Advisor Shivshankar Menon touched on regional security issues including Pakistan, Afghanistan, and Iran, as well as several trade-related issues including defense acquisitions, India's Medium Multiple Role Fighter Aircraft (MMRCA) tender, export controls, civil nuclear cooperation, and genetically modified foods.  Menon credited intelligence shared by the United States with helping to protect targets in the vicinity of the February 13 Pune bombing, leaving the terrorists no alternative but to go after a soft target instead.  Terrorism would be ""the primary issue"" in the planned February 25 Foreign Secretary-level talks with Pakistan, but Menon allowed that the agenda could expand after the first round of talks depending on Pakistan's response.  Menon cautioned that if the Pakistani establishment felt U.S. commitment was flagging in Afghanistan it would not do what was needed in the West. Menon was skeptical about the effect of new sanctions on the divided Iranian elite, but India would continue to implement any sanctions approved by the UN Security Council; Menon hoped they would be carefully targeted.  He emphasized the importance for the U.S.-India relationship of ""being seen to be sharing technology,"" and would encourage the Indian Embassy in Washington to explain India's proposed reforms on export controls directly to Senate staff.  Menon confirmed the government would introduce civil nuclear liability legislation in the next Parliament.  END SUMMARY.

Menon Touts ""Full-spectrum"" Relationship, Discusses Pune Bombing

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2. (C) In a wide-ranging meeting with CODEL McCaskill February 17, National Security Advisor Shivshankar Menon touched on several regional security and trade-related issues.  Whereas the U.S.-India relationship used to be too narrow, Menon said we now had the opposite problem, a ""full-spectrum"" relationship touching on virtually every area of life, with correspondingly high expectations for what we can accomplish together.

3. (C) Menon welcomed the condolences offered by Senator Claire McCaskill (D-MO) for the February 13 bombing in Pune that killed 10 and injured dozens.  The bombing was ""a shock, yet not shocking,"" considering India's familiar experience as a terrorist target.  Menon credited intelligence shared by the United States with helping prompt the Indian government to protect targets in the vicinity of the attack, such as the Chabad House and Osho Ashram, perhaps leaving the terrorists no alternative but to go after a soft target instead.  Three groups had claimed responsibility, but the government had not come to any conclusions about the perpetrators.  In India's long history of dealing with terrorism, Menon said, ""Most attacks lead back to Pakistan.""

""Many Pakistans""

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4. (C) Menon recounted that India had entered into the Composite Dialogue with Pakistan on the basis of former Pakistani President Pervez Musharraf's assurance that India would not be targeted by terrorists as long as the talks continued.  This dialogue process entered into a pause in 2007 at Musharraf's request when he was faced with difficult domestic challenges, which ultimately led to his ouster. Since then, India endured serial bombing attacks throughout 2008, two attacks on its embassy in Kabul (one he attributed to the Haqqani Network and the other to Lashkar-e-Tayiba), and then the November 26, 2008 attacks in Mumbai, known as ""26/11.""  Menon lamented that Pakistan had shown itself to be ""unable or unwilling to wean itself off from terror as an instrument of state policy.""  He alluded to evidence that serving Pakistani officials were involved in the 26/11 attacks.

5. (C) Menon shared his perspective that ""We are dealing with many Pakistans, so we need to run many Pakistan policies at the same time.""  He stressed that even after the Mumbai attacks India did not sever trade or travel ties with Pakistan because these elements of the relationship were important to achieving an eventual peace with Pakistan.  As a ""true democracy,"" public opinion defined the limits of India's forebearance, but Menon stressed that India did not wish to play into the hands of the terrorists by shunning dialogue.

6. (C) Terrorism would be ""the primary issue"" in the planned February 25 Foreign Secretary-level talks, but Menon allowed that after the first talks ""it will be up to the Pakistanis how they respond." "A peaceful, stable Pakistan was in India's national interest, which was ""why we keep trying."" Menon confessed that the Indian government's expectations for talks today were lower than when India had entered into talks with Pakistan in the past because ""We don't think Pakistan is capable of delivering much, but what's the alternative?""  He concluded, ""A peaceful, stable Pakistan is in our interest; we will work at it even if they make it hard for us.""

Afghanistan:  Menon a ""Minority of One""

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7. (C) Turning to Pakistan's role in Afghanistan, Menon cautioned that if the Pakistani establishment felt U.S. commitment was flagging in Afghanistan it would ""sit it out and use the Indian threat as an excuse for not doing what was needed"" in the West.  Menon said he may be a ""minority of one,"" but he thought there was more potential for success in Afghanistan than most observers in India.  The British were convinced the Coalition would lose because they lost three wars there, but others had been able to tame the country. Menon trumpeted India's assistance program of small, community-based projects, saying it took Indian officials one-and-a-half years to navigate around the ministries in Kabul to get direct access to local people, but it had paid off enormously.  He cited one instance in which 13,000 Afghans had applied for exams to qualify for Indian scholarships; not all of them were qualified, but it showed how strong the desire was for such opportunities.  He concluded that success will require ""more than just a military effort.""

8. (C) McCaskill agreed we had a chance to succeed because we had adjusted our strategy.  McCaskill was confident the United States would continue to sustain the 300,000 strong Afghan National Security Forces even if we began to draw down troops in 2011.  Menon observed that ""the wonder of the U.S. system is how quickly you learn; that cannot be said of any other country in the world.""

Iran:  A Choice Among ""Unsatisfactory Strategies""

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9. (C) Menon agreed with Senator Jeff Merkley's (D-OR) assertion that a nuclear Iran would be bad for everyone. Merkley had supported the Obama Administration's efforts to seek dialogue with Iran, but it was now clear the Islamic Republic was not open to dialogue.  Menon replied that ""the last thing we want is another nuclear power in our neighborhood.""  That was why India voted against Iran three times at the IAEA and implemented UN sanctions.  Iran was ""hopping mad"" over India's IAEA votes and Iranian Foreign Minister Moutakki ""blew up"" at former National Security Advisor M.K. Narayanan during his last visit to Delhi.  ""It goes without saying,"" according to Menon, that India would continue to implement any sanctions against Iran approved by the Security Council.

10. (C) India had a more complex relationship with Iran and was convinced that it could work with Iran on some issues. For instance, Menon asserted that Iran was more worried about the Taliban today than ISAF, which was not the case a year ago.  The trouble was that the Iranian elite was divided, so the normal rules of Iranian politics no longer seemed to apply.  Under these circumstances, Menon asked, ""What effect will sanctions have?""  ""If you must impose sanctions, we will go along with it,"" according to Menon, ""but we should be aware that it could end up benefiting the regime.""  He said any sanctions should be carefully targeted so they do not end up hurting the people rather than the elite.  He concluded that the Iran situation was ""very unsatisfactory from our point of view as well,"" and that the United States had ""a choice among unsatisfactory strategies.""

Trade Issues:  Fighters, Export Controls, Civ Nuke, GM Foods

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11. (C) Menon said he appreciated all that the India and the United States had been able to accomplish together, and said we needed to do more on defense cooperation.  McCaskill remarked about the Boeing presence in St. Louis and inquired about the MMRCA fighter tender.  Menon said the technical evaluations would wrap up in April and the tender would be awarded following a fair process.  He added that the C-17 deal was almost done and only a few ""loose ends"" needed to be tied up.

12. (C) ""In order to kick the relationship into a different gear,"" according to Menon, we needed ""to be seen to be sharing technology.""  We both have complex legal and regulatory structures, some left over from the Cold War, ""ancient stuff.""  It could take years to change this, but we have to try.  McCaskill agreed, suggesting the possibility of using the annual Defense Authorization Legislation, which moves through Congress annually ""like clockwork,"" to eliminate ""legislative handcuffs.""  Menon said he would ask the Indian Embassy in Washington to be in touch with McCaskill's staff to walk them through India's proposed changes.

13. (C) Merkley praised Menon's role in helping to conclude the Civil Nuclear Cooperation Agreement, and inquired about progress on implementation.  Menon mentioned planned Reprocessing Consultations March 2-4 in Delhi, adding, ""If we could accomplish the 123 Agreement, I don't see how this can stop us.""  Menon said unequivocally, ""We're introducing liability legislation to the next Parliament.""

14. (C) McCaskill noted that if there is one issue with regard to India that makes Americans ""cranky"" it is that India was stealing our manufacturing base.  Pointing out that Monsanto was also located in Missouri, she conceded that genetically modified foods were controversial, but noted that the United States purchased Indian GM cotton.  Menon said we were just catching ""the peak of the wave"" on this issue in India, noting that the papers were full of vigorous arguments on both sides.  He thanked McCaskill for reminding him that in difficult economic times these issues had the potential to take on added proportion in the relationship.

15. (C) Codel McCaskill did not have the opportunity to clear this cable.

NEW DELHI 00000355  004 OF 004

ROEMER

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