In the Hon’ble High Court of Delhi at New
Delhi
Civil Writ Jurisdiction
Writ Petition No. 1280 of 2012
IN THE
MATTER OF:
Seema
Sapra …Petitioner
versus
General
Electric Company and Others ….Respondents
Affidavit of petitioner pLACING ON RECORD SOME CABLES
(FROM THE WIKILEAKS LEAKED CABLES ) SENT BY THE US EMBASSY IN NEW DELHI WHICH
ESTABLISH THAT BOTH GENERAL ELECTRIC COMPANY AND THE US GOVERNMENT WERE
LOBBYING PRIME MINISTER MANMOHAN SINGH, RAILWAY MINISTER LALU PRASAD
YADAV, FOREIGN SECRETARY MENON AND OTHER
INDIAN GOVERNMENT OFFICIALS FOR CREATING THE MARHOWRA DIESEL LOCOMOTiVE FACTORY
PROJECT AND FOR AWARDING THIS PROJECT TO GENERAL ELECTRIC
I, Seema
Sapra, daughter of Late Shri A. R. Sapra, aged 41 years, previously resident of
G 4, first floor, Jangpura Extension, New Delhi 110014 and rendered homeless on
30 May 2012 (because of and as a result of the whistleblower complaints of
corruption, forgery, bribery, fraud and illegal activities made against General
Electric, Montek Singh Ahluwalia, Planning Commission, Railway Ministry and
Ministry of Finance and as a result of the whistleblower corruption petition
(W.P. (C ) 1280/ 2012) and because of my complaints of sexual harassment
against Mr Soli J Sorabjee and Mr Raian Karanjawala) in contempt of this
Hon’ble Court’s order dated May 25, 2012 and presently homeless and sleeping in
my car since 27 February 2013 (except for a period of approximately 15 days in
June 2013) do hereby solemnly affirm and state as under:
1.
I am the Petitioner in
the present Petition and am well aware of the facts of the case and am
competent to file the present affidavit.
2.
This affidavit is being filed by the
petitioner placing on record some cables (from the Wikileaks leaked cables)
sent by the US Embassy in New Delhi which establish that both General Electric
Company and the United States Government were lobbying Prime Minister Manmohan
Singh, Railway Minister Lalu Prasad Yadav, Foreign Secretary Menon, and other
Indian Government officials for creation of the Marhowra diesel locomotive
factory Project and for award of this project to General Electric.
3.
True copies of six
relevant cables sent by the United
States embassy establishing this lobbying
are annexed hereto collectively as Annexure P-1. Relevant extracts from these
cables are produced in the tabulated list of date below. This list of dates can
be added to the list of dates and events placed on record by the petitioner in
CM 7197/ 2013. These cables show that General Electric and Pratyush Kumar had
even lied to the US
embassy and had hidden the fact from US Embassy officials that their 2009
financial bid had been rejected by the Railway Ministry as non-responsive.
|
26
December 2006
|
US
Embassy
Senator
Specter Meeting With P.m. Singh
“Senator
Specter mentioned how impressed he was with the development he had witnessed
in early legs of his visits to the southern cities of
|
|
22 Feb
2007
|
Issue of justification for the ELF
(Electric Locomotive Factory) and DLF (Diesel Locomotive Factory) Projects
Cabinet
Committee on Economic Affairs (CCEA) approved Railway proposal to set up ELF
and DLF.
This
approval and the basis for this approval have not been placed on the court
record by the Railway Ministry.
According
to Railway Ministry affidavit dated 14 January 2013 in reply to CM 19501/
2012, there is a CCEA note justifying the need for DLF and ELF and the need
for new manufacturing capacity for diesel and electric locomotives. This note
has not been produced on record.
Mr
Montek Singh Ahluwalia is a member of the CCEA.
The
genesis of these Projects is a recommendation by Mr Montek Singh Ahluwalia at
the behest of General Electric.
|
|
28 Sep
2007
|
US
Embassy
“The
Japan Bank for International Cooperation (JBIC) has proposed to offer loans
at attractive rates to build Dedicated Freight Corridors (DFC) in
|
|
11 Dec
2007
|
US
Embassy
Railway
Minister Lalu Reaffirms Support For Nuclear Deal But Wants Political
Consensus
“Yadav
updated the Ambassador about his efforts to continue upgrading
…
The
Ambassador commended Yadav on his success in turning around Indian Railways.
Yadav said that he operated the Railways according to three words:
"faster, heavier and longer." "Each word is worth two billion
dollars," he asserted. Yadav said that he hoped to capture more of the
freight market, 60 percent of which still travels by truck, by constructing a
dedicated freight corridor from
…
Lalu
was attended by four key RJD Members of Parliament (MPs) and senior Rail
Ministry bureaucrat, who greatly amplified the Minister's thoughts as
expressed in workable, heavily accented English.”
|
|
26
April 2008
|
RFQ
issued for Marhowra diesel locomotive factory Project
|
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1 Aug
2008
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Issue of General Electric having access to
unreleased Bid Documents in 2008
Reproduced
below is an email that the petitioner received from Ms Ruby Anand on March 9,
2010 forwarding five pdf files that were sent to her by Ms Praveena
Yagnambhat (from General Electric) on
August 1, 2008. Ms Ruby Anand has in the past served as General Counsel
for General Electric in
i.
11th July 2008 D
ii.
11th July 2008 D
Loco Maintenance Contract
iii.
11th July 2008 D
Loco Procurement Contract
iv.
11th July 2008 D
Loco RFP Document
v.
11th July 2008 D
Loco Shareholders Agreement
The
email from Ms Ruby Anand read:
“From: Ruby
Anand <rubysdesk@gmail.com>
Date: Tue, Mar 9, 2010 at 8:35 PM Subject: See the 5th doc for now - the Loco RFP -issued earlier To: Seema Sapra <seema.sapra@googlemail.com> ---------- Forwarded message ---------- From: Yagnambhat, Praveena (GE Infra, Transportation) <praveena.yagnambhat@ge.com> Date: Fri, Aug 1, 2008 at 4:10 PM Subject: Loco RFP To: Ruby Anand <rubysdesk@gmail.com>
Dear Ruby
Attached please find a soft copy of the Loco RFP. Please
let me know if you are unable to open any of the files.
Regards
Praveena Yagnambhat
GE Infrastructure -
Phone : +91 11 4155 5317
Fax : +91 11 2335
5969
--
Ruby Ruby Anand C-4/7 Safdarjung Development Area
A
printout of the pdf file - 11th July 2008 D Loco RFP Document – which the
petitioner received from Ms Ruby Anand on March 9, 2010 has been attached as
Annexure P-2 to the rejoinder affidavit filed by the petitioner on July 23,
2012. This document is the Railway Ministry draft RFP for the 2008-2009
tender for the diesel locomotive factory Project at Marhowra. Similarly, the other four documents
attached to Ms Ruby Anand’s email dated March 9, 2010 are all Indian Railways
draft documents for the 2008-9 tender for the Marhowra locomotive factory
Project.
The RFP
for the Marhowra Project tender in 2008 was not issued by the Railways
Ministry until the 22 September 2008. So how did General Electric have
in its possession on August 1, 2008, the draft documents for the 2008-2009
Marhowra Project tender? How did General Electric get access to these
documents on or before August 1, 2008?
These
internal Railway Ministry documents (still in draft form) were obviously
obtained by General Electric illegally before they were officially finalised
and released publicly. This evidence confirms the complaints of corruption
against General Electric. General Electric needs to disclose how it came
into possession of these confidential documents. How were these documents
leaked to General Electric?
The
affidavit filed by the Railway Ministry in response to CM 19501/ 2012 does
not offer any explanation about how General Electric came to possess a copy
of the draft RFP on 1 August 2008, when this RFP was formally released to
Bidders only on 22 September 2008.
All
that this affidavit dated 14 January 2013 filed by the Railway Ministry in
response to CM 19501/ 2012 (in volume 13 of the court record) states on this
issue is the following:
“It is
pertinent to note that any RFP document is one which is discussed,
deliberated and finalized after discussion with several stakeholders and
consultants.”
No
explanation has been provided by the Railway Ministry as to how General
Electric had in its possession the draft Bid Documents for the ELF tender on
1 August 2008, before these were released to the two Bidders, EMD and General
Electric.
The
statement in the Railway affidavit that “It is pertinent to note that any RFP
document is one which is discussed, deliberated and finalized after
discussion with several stakeholders and consultants” is an attempt to cover
up the fact that General Electric had in its possession, the draft Bid
Documents before they were officially/ formally released/ shared with either
General Electric or EMD.
This
provides evidence that the DLF Project have been created/ tailor-made at the
behest of and for General Electric. General Electric has since 2008
influenced the bid documents to ensure that a commercially lucrative contract
and opportunity is created for itself using their contacts/ agents within the
Indian government (like Mr Montek Singh Ahluwalia).
The
role of Prime Minister Manmohan Singh, the role of his close aide Mr Montek
Singh Ahluwalia and the role of other officials from the PMO and the Planning
Commission in creating these suspect Projects for General Electric and in
interfering in the bid process and the bid documents with intent to help
General Electric secure the DLF Project requires to be investigated.
|
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3 Oct
2008
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US
Embassy
“TWO
LARGE RAILWAY PROJECTS WITH
…
MAJOR
RAILWAY TENDER TO BE AWARDED TO ONE OF TWO US FIRMS CHUGGING FORWARD
--------------------------------------- ¶7. (U) The GOI decided last week to release
the Request for Proposal for a $5 billion diesel locomotive project, which
will be awarded to one of two American firms. Globally only GE and EMD
produce diesel locomotives; they are, therefore, the only bidders on the
project to supply 1000 diesel locomotives and build a locomotive factory in
|
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31 Oct
2008
|
US
Embassy
“JBIC
TO FUND THE WESTERN DEDICATED FREIGHT CORRIDOR
…
|
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10 Feb
2009
|
Issue of tailor-made DLF Project and
tenders and issue of illegal lobbying by General Electric
The petitioner
draws the attention of this court to a public statement made by Mr. John
Rice, Vice Chairman of General Electric Company in connection with the
Madhepura and Marhowra Projects during an investor meeting on February 10,
2009. Mr John Rice stated:
“We are also competing for the
In this
statement, Mr John Rice has disclosed that the Marhowra Projects which is the
subject matter of one of the impugned tenders in this writ petition “has been 10 years in the making, and will
be all of the diesel electric locomotive requirements for
|
|
16
February 2009
|
Financial
bid for DLF tender received from GE Global Sourcing India Private Limited.
EMD, also shortlisted did not bid.
General
Electric’s bid was found to be non-responsive and the tender was discharged.
|
|
11 Jun
2009
|
US
Embassy
Fs
Menon And U/s Burns Discuss New Strategic Dialogue Architecture And Bilateral
Issues
“At
Burns' request, Menon promised to follow up on the tender won by General
Electric to build a railroad locomotive plant in
|
4.
Also annexed hereto as
Annexure P-2 are true copies of two cables sent by the US embassy that
establish Mr Montek Singh Ahluwalia’s corrupt inteference in issues that do not
concern him and do not fall within his job description as Vice Chairman of the
Planning Commission of India and which establish his persistent lobbying on
behalf of Amercian interests.
DEPONENT
VERIFICATION
Verified
at New Delhi on
this 26th day of August 2013,
that the contents of the above affidavit are true and correct to my
knowledge and that nothing material has been concealed therefrom.
DEPONENT
In the Hon’ble High Court of Delhi
at New Delhi
Civil Writ Jurisdiction
Writ Petition No. 1280 of 2012
IN THE
MATTER OF:
Seema
Sapra …Petitioner
versus
General
Electric Company and Others ….Respondents
INDEX
|
No.
|
Particulars
|
Pages
|
|
1
|
Affidavit
of petitioner placing on record some cables (from the Wikileaks leaked
cables) sent by the US Embassy in New Delhi which establish that both General
Electric Company and the United States Government were lobbying Prime
Minister Manmohan Singh, Railway Minister Lalu Prasad Yadav, Foreign
Secretary Menon, and other Indian Government officials for creation of the
Marhowra diesel locomotive factory Project and for award of this project to
General Electric.
|
1-10
|
|
2
|
Annexute
P-1 – True copes of six relevant cables sent by the
|
11-29
|
|
3
|
Annexure
P-2 – True copies of two cables sent by the US Embassy in New Delhi that
establish Mr Montek Singh Ahluwalia’s corruption and lobbying activities on
behalf of American interests
|
30-37
|
Place: New Delhi Petitioner
in Person
August 26
2013 Seema
Sapra
Rendered homeless since May 30, 2012 as a result of
corruption complaints against General Electric and as a result of this
whistleblower corruption petition (W.P. (C ) 1280/ 2012) and presently homeless
and sleeping in her car since 27 February 2013
All 17
respondents have been served with an advance copy of this affidavit by email
dated 26 August 2013.
Cable reference id:
#06NEWDELHI8511
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Reference id
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 aka Wikileaks id #90865 ? |
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Subject
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Senator Specter Meeting With
P.m. Singh
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Origin
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Cable time
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Tue, 26 Dec 2006 11:50 UTC
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Classification
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CONFIDENTIAL
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Source
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History
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VZCZCXRO3725 RR RUEHBC RUEHCN
RUEHDE RUEHDIR RUEHGH RUEHKUK RUEHVC DE RUEHNE #8511/01 3601150 ZNY CCCCC ZZH R
261150Z DEC 06 FM AMEMBASSY NEW DELHI TO RUEHC/SECSTATE WASHDC 1741 INFO
RUEHOO/CHINA POSTS COLLECTIVE RUCNIRA/IRAN COLLECTIVE RUCNNSG/NUCLEAR SUPPLIERS
GROUP COLLECTIVE RUEHBJ/AMEMBASSY BEIJING 4852 RUEHRL/AMEMBASSY BERLIN 0612
RUEHLM/AMEMBASSY COLOMBO 8329 RUEHKA/AMEMBASSY DHAKA 8391 RUEHIL/AMEMBASSY
ISLAMABAD 1514 RUEHLO/AMEMBASSY LONDON 2388 RUEHMO/AMEMBASSY MOSCOW 0953
RUEHKO/AMEMBASSY TOKYO 4276 RUEHCI/AMCONSUL CALCUTTA 7963 RUEHCG/AMCONSUL
CHENNAI 8124 RUEHBI/AMCONSUL MUMBAI 7323 RUEAIIA/CIA WASHDC RUCPDOC/DEPT OF
COMMERCE WASHDC RHEGGTN/DEPT OF ENERGY GERMANTOWN MD RHEHNSC/NSC WASHDC
RUEHUNV/USMISSION UNVIE VIENNA 0896 RUEHGV/USMISSION GENEVA 5657
RUCNDT/USMISSION USUN NEW YORK 3336
Hide header C O N F I D E N T I A
L SECTION 01 OF 03 NEW DELHI 008511 SIPDIS SIPDIS E.O. 12958: DECL: 12/26/2016
TAGS: PREL [External Political Relations], ENRG [Energy and Power], ETRD [Foreign Trade], ETTC [Trade and Technology Controls], EAGR [Agriculture and Forestry], IR [Iran], IS [Israel], IZ [Iraq], JO [Jordan], KN [Korea (North)], KNNP [Nuclear Non-Proliferation], LE [Lebanon], PARM [Arms Controls and Disarmament], PGOV [Internal Governmental Affairs], PK [Pakistan], CH [China (Mainland)], IN [India; Andaman Islands; Lakshadweep Islands; Nicobar
Islands] SUBJECT: SENATOR SPECTER MEETING WITH P.M. SINGH NEW DELHI
00008511 001.2 OF 003 Classified By: A/DCM John Davison for Reasons 1.4 (B, D) ¶1. (C) Summary. Visiting Senator Arlen Specter
(R - PA) called on Indian P.M. Manmohan Singh December 24. Both agreed on the
historic impact of the U.S./India civil-nuclear agreement on bilateral
relations. P.M. Singh offered the caveat that the significance will be historic
once the 123 Agreement is finalized, and Senator Specter urged Singh to
expedite 123 negotiations. Other topics of this very cordial discussion
included bilateral economic ties, China ,
Iran , Syria , Iraq ,
the Middle East and outsourcing of Pennsylvania
jobs to India .
End Summary. ------------------------------------- Gratitude for Civil-Nuclear
Agreement ------------------------------------- ¶2. (C) During a December 24 meeting with
Senator Arlen Specter, P.M. Singh expressed his strong appreciation to
President Bush and especially to the Republican leadership of Congress for their
efforts to garner strong bipartisan support for passage of the civil-nuclear
legislation. Singh said that the impact of the agreement will be historic once
the follow-on 123 Agreement is finalized, which Senator Specter urged be done
as quickly as possible. Senator Specter agreed the accord demonstrated the
great promise of the agreement for stimulating economic ties and the Indian
development. He noted that the US
"liked what it saw" in India ,
especially in contrast to authoritarian China , and he stressed the
importance of Indian democracy "in this troubled world." For his
part, Singh described the improved relationship between our two democracies as
a "far-reaching signal to humankind in the 21st century." Singh also
pointed out other examples of growing ties, citing the good works of the CEO
Forum and cooperation on clean coal technology. Singh was particularly keen to
emphasize the importance of the Agricultural Knowledge Initiative, which he
said offered India
the opportunity of a "second wave" of its Green Revolution.
-------------------------------------------- "What if?" on Regional
Nuclear Proliferation -------------------------------------------- ¶3. (C) Senator Specter alluded to an earlier
visit he made to India
in 1995, when he had transmitted an offer by then-P.M. Rao to then-Pakistani
P.M. Bhutto to make the sub-continent a nuclear-free zone (an offer which
Bhutto subsequently rebuffed). Specter sought Singh's views on how the region
might be different had Bhutto taken the offer seriously. Singh chose to respond
by pointing out that Pakistan
was not India 's
only neighbor which possessed nuclear weapons. Regretfully, other neighbors
such as China and further
away, North Korea ,
were nuclear weapons states, and thus, a purely sub-regional solution to
eliminate nuclear weapons would not be salable to Indian voters. ¶4. (C) That noted, Singh stressed that there
was no dearth of opportunities for dialogue with Pakistan ,
and to that end he had met four times with President Musharraf since becoming
P.M. Normalization of ties with Pakistan
remained a top priority for his government. Likewise, Singh wanted to improve
ties with China ,
despite a long-standing border dispute. Later in the meeting, however, he
criticized Chinese influence in Africa and the Middle East, and said he doubted
that China would ever support
a solution in Darfur .
-------------------------------- Musings on Iran ,
Syria and Hamas
-------------------------------- NEW DELHI
00008511 002.2 OF 003 ¶5. (C) Senator Specter then noted his
appreciation for Indian votes at the IAEA on Iran ,
and he sought Singh's views on Syria
and the Middle East . Singh recalled his public
statements that India does
not want Iran
to become a nuclear state. As a signatory to the NPT, Iran had
legitimate rights but also obligations. Singh worried, however, that events in Iraq and Lebanon
have increased Iran 's
self-confidence. Between the leadership of Iran
and Syria ,
Singh thought that President Assad would be easier to influence. He said that
the assessment of his special envoy to Syria
was that Assad seeks a modus vivendi with the U.S, but that such an arrangement
is complicated by the investigation into Syria 's role in assassination of
former Lebanese P.M. Hariri. On the Israeli-Palestinian issues, Singh noted India 's historic close ties to Israel , but he added that since the death of Arafat , India Cochin and Bangalore . Still, he wanted to pass on
concerns from some of his Pennsylvania
constituents about outsourcing of jobs from the U.S.
to India .
Singh noted that one of the many positive aspects of the civil-nuclear deal
would be increased opportunities for U.S. firms such as
Pennsylvania-based Westinghouse to compete for major nuclear energy deals.
Specter, smiling, reminded Singh that General Electric also had operations in Erie , Pennsylvania India still could strengthen its
market economy by focusing more on removing bureaucratic obstacles. Specter
asked if India could develop
at the same pace as China ,
whose leaders he acknowledged could at times be quite ruthless in their push to
develop. Singh answered that while reforms might be slower in a democracy, but
that when change occurs, it was more durable.
---------------------------------------- Parting Thoughts on Iraq and Afghanistan ----------------------------------------
¶7. (C) Singh's observations on democracy led
Senator Specter to muse as to why democracy seemed to face such challenges in Russia , Iraq
and Afghanistan .
Singh recalled what he said he had earlier told President Bush: that developing
democracy also depended heavily on such factors as culture and civilization. He
stressed India 's support for
President Karzai, and noted that India
already contributed 700 million dollars in development assistance to Afghanistan .
The world has to stay the course in Afghanistan , which faces continued
challenges by the Taliban who are using Pakistani territory against Karzai. In Iraq , it had
been a mistake to dissolve state institutions such as the army, and rebuilding
them would be a long-term process. A precipitous U.S.
departure would have undesirable consequences, as would dividing Iraq
into three parts. Jordanian King Abdullah had recently visited India and was
"worried" about the regional situation. ----------------- Meeting
Attendees NEW DELHI
00008511 003.2 OF 003 ----------------- ¶8. (U) USG: Senator Arlen Specter, Ambassador
David Mulford, Scott Boos, Legislative Assistant for Specter, and John Davison,
Economic Minister Counselor. GOI: Prime Minister Manmohan Singh, and Joint
Secretary Americas, Ministry of External Affairs, S.
Jaishankar . ¶9. (U) This message was not cleared by Senator
Specter. MULFORD
Cable reference id:
#07NEWDELHI4419
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Reference id
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 aka Wikileaks id #123892 ? |
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Subject
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Origin
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Cable time
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Fri, 28 Sep 2007 09:49 UTC
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Classification
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UNCLASSIFIED//FOR OFFICIAL USE
ONLY
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Source
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History
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VZCZCXRO0726 RR RUEHAST RUEHBI
RUEHCI RUEHDBU RUEHLH RUEHPW DE RUEHNE #4419/01 2710949 ZNR UUUUU ZZH R 280949Z
SEP 07 FM AMEMBASSY NEW DELHI TO RUEHC/SECSTATE WASHDC 8542 INFO
RUEHCG/AMCONSUL CHENNAI 1574 RUEHCI/AMCONSUL KOLKATA 0909 RUEHLH/AMCONSUL
LAHORE 4139 RUEHBI/AMCONSUL MUMBAI 0657 RUEHPW/AMCONSUL PESHAWAR 4653 RUEHIL/AMEMBASSY
ISLAMABAD 3961 RHEBAAA/DEPT OF ENERGY WASHDC RUEATRS/DEPT OF TREASURY WASHDC
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RUEHRC/DEPT OF AGRICULTURE WASHDC RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
Hide header UNCLAS SECTION 01 OF
04 NEW DELHI 004419 SIPDIS SENSITIVE SIPDIS USDOC FOR
ITA/MAC/OSA/LDROKER/ASTERN/KRUDD DEPT OF ENERGY FOR A/S KHARBERT, TCUTLER,
CZAMUDA, RLUHAR DEPT PASS TO USTR DHARTWICK/CLILIENFELD/AADLER DEPT PASS TO
TREASURY FOR OFFICE OF SOUTH ASIA ABAUKOL TREASURY PASS TO FRB SAN
FRANCISCO/TERESA CURRAN STATE FOR SCA/INS AND EB/TRA JEFFREY HORWITZ AND TOM
ENGLE E.O. 12958: N/A TAGS: EFIN [Financial and Monetary Affairs], EINV [Foreign Investments], EPET [Petroleum and Natural Gas], ETRD [Foreign Trade], SENV [Environmental Affairs], IN [India; Andaman Islands; Lakshadweep Islands; Nicobar
Islands] SUBJECT: NEW DELHI WEEKLY ECON OFFICE HIGHLIGHTS FOR
SEPTEMBER 24-28, 2007 NEW DELHI 00004419 001.2 OF 004 ¶1. (U) Below is a compilation of Economic
highlights from Embassy New Delhi for the week of September 24-28, 2007. MIXED
SIGNALS ON RETAIL --- ¶2. (U) Two key GOI figures in the U.S. this week gave conflicting messages on the
future of organized retail in India .
Minister of Commerce and Industry Kamal Nath, speaking at an "India AT
60" event in New York on Monday, said that the governing issue in retail
policy is not FDI versus indigenous companies, but large versus small,
referring to many small retailers' fears that their livelihoods are threatened
by organized players. He explained that the GOI is interested only in
incremental growth in the sector but did not clarify what that might mean,
leaving the press to infer that Nath was pessimistic about greater FDI in
retail. Then on Thursday, Finance Minister Chidambaram, addressing an audience
at the Wharton Business
School , said that it was only a matter
of time before India
permitted greater FDI in retail, adding that the GOI would gradually convince
small retailers that they can coexist with organized retailers, clearing the
way for greater liberalization. Currently, the GOI permits 51 percent FDI in
single-brand retail and 100 percent FDI in wholesale and cash-and-carry formats
but does not allow FDI in multi-brand retail. ¶3. (U) Reliance Fresh had another busy week on
the ground. Monday saw violent trader protests interrupt the opening of a pair
of outlets in the state of Orissa. The press also reported that Reliance Fresh
will pull out of Uttar Pradesh (UP), India 's most populous state,
because the government there has proved intractable. UP Chief Minister Mayawati
has not rescinded her closure order on Reliance outlets in the state, nor has
the committee she assigned to study the affects of organized retail produced
its report, though the one-month deadline Mayawati set at the time of the
closures has passed. (Note: Although Mayawati declared on August 23 that all
free-standing produce retailers in the state had to cease operation, only
Reliance Fresh actually closed most of its doors. The press tends to ignore the
fact that Spencer's and others have remained open. End note.) Reliance
reportedly has begun lay-offs of 1,000 of its 2,800 total employees in the
state and will relocate many others. ¶4. (U) Despite these setbacks, Reliance Retail
marches ahead. The company quietly opened nine Reliance Fresh outlets in Mumbai
midweek and pushed ahead with its effort to become a franchisee for Gap
clothing brands. Gap, which has demonstrated some reluctance to work on the
franchise model, has had discussions with many Indian companies, but The
Economic Times reports that Reliance is the frontrunner to close the deal.
COOPERATION ON URBAN TRANSPORT --------------- ¶5. (U) On September 24, the Department of
Transportation signed a Memorandum of Cooperation (MOC) with Minister Jaipal
Reddy of the Ministry of Urban Development. The MOC signing was overseen in New Delhi by Deputy
Administrator Sherry Little of the Federal Transit Administration (FTA), under
the Department of Transportation. The FTA visit is a follow on to a trip by
Minister Reddy and colleagues to view urban infrastructure and mass transit
systems in the US
earlier this year in May. Under the MOC, both governments will look for
opportunities to collaborate on public transport, inter-modal transportation,
safety in transport, transport for persons with disabilities, Intelligent
Transportation Systems, Traffic Information Centre, capacity building and
training in public transportation, and other fields of mutual interest. ¶5. (U) This is an important development at a
time when the central government is focusing on India 's infrastructure gaps and
ways to attract much needed investment as well as the Ministry of Urban
Development's focus on emphasizing urban transport policy as a key element in
building urban infrastructure. Following the signing, NEW DELHI 00004419 002.2
OF 004 Urban Development(Minister Jaipal Reddy said: "Large-scale
urbanization in India has put severe strain on urban infrastructure which
includes water supply, road and transport, sewerage and sanitation, drainage,
and solid waste management. If momentum of economic growth is to be maintained,
challenges thrown up by large-scale urbanization will have to be addressed
without delay." DEDICATED FREIGHT CORRIDORS OF THE INDIAN RAILWAYS - A
MATTER OF DEBATE ------------------ ¶6. (SBU) The Japan Bank for International
Cooperation (JBIC) has proposed to offer loans at attractive rates to build
Dedicated Freight Corridors (DFC) in India
subject to two preconditions: (1) both east (Delhi-Kolkata) and west
(Delhi-Mumbai) corridors are electrified and (2) electric locomotive
manufacturing in India
is established under public private partnerships (PPPs) with Japanese
manufacturers. While India
certainly welcomes Japanese assistance in developing railway corridors (as GOI
has done with other infrastructure development projects - most notably the Delhi metro), USG is
advocating that the above two preconditions are simply not sound economics. ¶7. (U) The Indian Railways has asked the GOI to
not electrify the Western DFC since it is likely to handle a lot of container
traffic from Indian ports and northern Indian cities to Delhi which necessitates double stack and triple
stack container operations. Such operations require significantly higher
investment (approximately five more times) when run on electrified lines versus
non-electrified lines. INDIAN RAILWAYS SEEK PPPS FOR MANUFACTURING DIESEL
LOCOMOTIVES ------------------------- ¶8. (SBU) GE Rail estimates that Indian Railways
faces an annual deficit of 500 to 700 diesel locomotives - above and beyond the
country's current diesel locomotive manufacturing capacity. GE also notes that
the Indian Railways, through its production arm of Diesel Loco Works (DLW), has
the capacity to manufacture about 150 to 200 diesel locomotives per year or
1,000 trains in the next five years. Given the apparent shortfall and expected
future demand, Indian Railways is seeking to enter into a PPP joint venture for
the establishment of a new greenfield locomotive
manufacturing facility in India
(rumored to be in Bihar , Railways Minister
Lalu Prasad's home state). GE anticipates taking a 74 percent stake in this
joint venture and thereby, maintaining operational control. This order is
valued at approximately USD 4 billion. ¶9. (SBU) In order to meet Indian Railways'
short-term locomotive needs, GE envisions several phases, whereby a first phase
launch order of 50 fully assembled locomotives would be shipped from its
manufacturing hub in Erie , PA. Erie
and assembled in-country. After which, any remaining orders would be processed
at the new locomotive manufacturing facility in India . Even after this plant is
fully operational, GE still anticipates that certain core equipment, like the
rail traction and braking systems, would still be sourced from Erie along with other maintenance and service
work. GE estimates this commercial opportunity at USD 1.3 billion with
approximately USD 520 million in U.S.
content (goods and parts imported from the United States ). ¶10. (SBU) GE foresees competition from
Transmash (Russia ), Dalian (China ),
QSY (China ), and EMD (LaGrange , Illinois NEW DELHI 00004419 003.2 OF 004 MOVING FROM
SERVICES TO MANUFACTURING LED GROWTH -------------------- ¶11. (U) On September 27, during a major
economic summit, Secretary Ajay Shankar from the Department of Industrial
Promotion and Policy (DIPP) at the Ministry of Commerce and Industry commented
on the bright performance of the manufacturing sector during the last two to
three years. He was confident that India will emerge as the world's
favorite manufacturing base within a decade when infrastructure constraints
will cease to exist given other comparative advantages - such as low cost
labor, good product quality, stable political and legal environment, strong
knowledge base, and a big consumer market. ¶12. (U) While giving the keynote address at the
summit, Secretary Shankar pointed to the flashy double digit growth rate of the
Indian manufacturing sector since 2005-06, despite facing infrastructure
bottlenecks and regulatory obstacles. He was emphatic that the 1990s'
perception of India having a
competitive advantage in only services and not manufacturing is changing with
many MNCs opting for India
as one of their production bases with future expansion plans. Shankar also
discussed how the GOI is prioritizing infrastructure development and hopes to
attract huge investments for the sector through public private partnerships,
special economic zones (SEZs), and themed manufacturing clusters which attract
FDI. Other efforts include rationalization of regulatory procedures at the
micro level to save cost and time, skill enhancing training programs, education
management based on industry needs, and promotion of an intellectual property
culture. ¶13. (U) Also featured on the panel were private
sector representatives from Motorola, Microsoft India, Infotech Enterprises,
Sri City SEZ, AT Kearney India, Yes Bank, and Quatrro BPO Solutions. They all
agreed with Secretary Shankar's assessment that India has the ability to emerge as
a major global manufacturing hub in the middle to long-term as evidenced by the
remarkable transformation of the sector. Panelists commented that India is no
longer just an IT service provider, but that its strength leans towards vibrant
knowledge based manufacturing units (in engineering, design, and R&D).
While the company representatives expect the strong performance in
manufacturing to continue for sometime, they were also quick to point out that
problems relating to infrastructure and taxation need to be addressed for
overall economic growth and sector expansion. ¶14. (U) According to the panel, India 's
manufacturing sector is playing a pivotal role in the economy with a 21 percent
share of GDP, 7 percent of total FDI inflows, and 51 percent of total exports. India is
rapidly emerging as a sourcing base for global operations. Key manufacturing
sectors propelling growth over the last two years are engineering, automobiles,
chemicals, textiles, electronics, and hardware. The next wave of growth is
expected in food processing, pharmaceutical and biotech, and wind energy. ¶15. (U) The telecom industry representative
stated that the telecom revolution in recent years has led to 7-8 million
additional mobile phones each month in India . Multinational companies like
Motorola and Nokia are finding it profitable and easier to manufacture mobile
equipment in India
rather than exporting big consignments. Now that R&D is driven mainly by
the private sector, India
has great potential to become a world leader in R&D activities. India also scores better than China in this
field as the Indian R&D industry is both traditional and knowledge based. ¶16. (U) With the development of SEZs across the
country, panelists predicted that manufacturing activities are slated to pick
up drastically. They also concluded that the SEZ concept may also prove
beneficial for India 's
infrastructure integration efforts, thereby making India an attractive destination for
manufacturing giants. NEW DELHI
00004419 004.2 OF 004 ¶17. (U) Visit New Delhi 's Classified Website:
http://www.state.sgov/p/sa/newdelhi WHITE
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Railway Minister Lalu Reaffirms
Support For Nuclear Deal But Wants Political Consensus
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Tue, 11 Dec 2007 14:32 UTC
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VZCZCXRO8878 OO RUEHBI RUEHCI
RUEHLH RUEHPW DE RUEHNE #5280/01 3451432 ZNY CCCCC ZZH O 111432Z DEC 07 FM
AMEMBASSY NEW DELHI TO RUEHC/SECSTATE WASHDC IMMEDIATE 9660 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
1356 RUCNDT/USMISSION USUN NEW YORK 5788
Hide header C O N F I D E N T I A
L SECTION 01 OF 02 NEW DELHI 005280 SIPDIS SIPDIS E.O. 12958: DECL: 12/10/2017
TAGS: PREL [External Political Relations], PARM [Arms Controls and Disarmament], TSPL [Science and Technology Policy], KNNP [Nuclear Non-Proliferation], ETTC [Trade and Technology Controls], ENRG [Energy and Power], TRGY [Energy Technology], IN [India; Andaman Islands; Lakshadweep Islands; Nicobar
Islands] SUBJECT: RAILWAY MINISTER LALU REAFFIRMS SUPPORT FOR NUCLEAR
DEAL BUT WANTS POLITICAL CONSENSUS Classified By: Ambassador David Mulford for
Reasons 1.4 (B and D) ¶1. (C) Summary: Minister of Railways and key
government ally Lalu Prasad Yadav told the Ambassador December 7 that he sought
to convince the Left of the benefits of implementing the U.S.-India civil
nuclear cooperation initiative. Yadav said that he saw the need for energy as a
major challenge facing India ,
but no one wanted early elections. Yadav updated the Ambassador about his
efforts to continue upgrading India 's
railroads. The Ambassador mentioned that two U.S. firms were interested in
constructing a diesel locomotive factory. Yadav's continued support of the
nuclear deal is essential to move the initiative forward, but his party's
precarious position in the state of Bihar and
his desire to remain in power through a full term at the center will make him
discourage the government from provoking the Left to withdraw support and the
government to call early elections. End Summary. Yadav Supports Nuke Deal - - -
¶2. (C) In a December 7 meeting with Minister of
Railways and key government ally Lalu Prasad Yadav, the Ambassador thanked him
for his positive approach to the U.S.-India civil nuclear cooperation
initiative. Partially speaking through an interpreter, Yadav explained that he
considered India 's
power needs "the most urgent problem." As a member of the UPA-Left
committee formed to discuss the deal, Yadav conveyed that he sought to
"sort out confusion and misunderstanding with the coalition
partners." "In a democracy, we have to obtain the opinion of everyone,"
he explained. Asked if he had any questions, Yadav responded that he
understands the Hyde Act and 123 Agreement, and "my party members and I
are trying to convince everyone that there is nothing to fear." He noted
that he himself has good relations with the Left. ¶3. (C) The Ambassador recounted that he had
attempted to sway the opposition BJP, but the party leaders repeated the same
arguments in Parliament that the Ambassador had refuted. Yadav derided the
BJP's assertion that it will renegotiate the deal if it comes back to power.
"Double-speak won't get them power," he said. He recognized that the
Ambassador had a duty to promote the initiative, but warned that his meetings
with the BJP prompted some to question, "why are the Americans so
eager?" Yadav clarified that his own political party, the RJD, disagreed
with the U.S. over Iraq , but he saw that the nuclear deal provides
substantial energy and environmental benefits for India . The Cabinet committee
approved the 123 Agreement, scientists and former President Kalam supported it,
Yadav observed, but the Left still had questions. "We are in favor of
convincing everyone," he underlined. "Let us wait. We are in favor,
but no party wants elections." Faster, Heavier, Longer - - - ¶4. (SBU) The Ambassador commended Yadav on his
success in turning around Indian Railways. Yadav said that he operated the
Railways according to three words: "faster, heavier and longer."
"Each word is worth two billion dollars," he asserted. Yadav said
that he hoped to capture more of the freight market, 60 percent of which still
travels by truck, by constructing a dedicated freight corridor from Delhi to Mumbai and Ludhiana
to Calcutta .
The Ambassador conveyed that two U.S.
firms have expressed interest in building a new diesel locomotive factory in Bihar , and encouraged Yadav to ensure that the corridor
would be diesel. Yadav replied that Japan 's assistance will mean that
the eastern corridor will likely be electric. That still leaves the western
corridor, however, on which he planned to operate double-stacked containers on
flat wagons using diesel. He related that his staff had traveled to China to see
their double-stacked cars operating on electric rail, but they had a 30 percent
lower capacity because they were not flat. Yadav also boasted that Indian Rail
has recently increased the train length to 58 cars carrying a total of 4000
tons, nearly double the 2300 tons they carried before. Indian Rail had even
experimented with 116 cars, he revealed. Yadav Believes Left will Stay in West
Bengal - - - NEW DELHI
00005280 002 OF 002 ¶5. (C) The Ambassador asked for Yadav's
political observations in Gujarat and West Bengal .
Yadav believed that Chief Minister Narendra Modi had communalized the Hindus in
Gujarat , but he saw unrest in the state BJP.
As for West Bengal , Yadav contended that the
Left's reduced standing is only temporary and they will retain control over the
state government. Comment: Yadav's Support Is Essential But Need for Consensus
Remains - - - ¶6. (C) Yadav, popularly known as Lalu, is known
as one of the most savvy, colorful, grassroots politicians in India , and one
of the three vital allies of the UPA government. The Parliament debate put the
support of those allies on display. Tamil Nadu Chief Minister Karunanidhi, who
leads the DMK party, had his daughter give her first speech in Parliament in
support of the nuclear deal. Sharad Pawar's Maharashtra-based NCP also spoke in
favor. For his part, Lalu sat through both Parliamentary debates, and though he
did not speak formally, he actively retorted to the opposition during the
frequent shouting matches that punctuated the debates. ¶7. (C) But as Lalu made clear in his meeting,
and as the other allies alluded in their speeches, support for the nuclear deal
is contingent on earning consensus. Although we cannot gauge whether Lalu
seriously believes he can sway the Left, his stated aim for consensus reveals
the pressure that the allies may have exerted on the UPA government to mitigate
the chances of the Left from withdrawing from power. While it should be
heartening that Lalu sees some political gain in supporting the nuclear deal,
his support stops if the downfall of the government comes into play. The
conventional wisdom here suggests Lalu's first priority is to see the UPA
secure a full term -- with all the opportunities for patronage that represents.
¶8. (C) Bio Note: Lalu was attended by four key
RJD Members of Parliament (MPs) and senior Rail Ministry bureaucrat, who
greatly amplified the Minister's thoughts as expressed in workable, heavily
accented English. Lalu seemed on his best behavior. He certainly was not the
spontaneous, funny, earthy, rustic Lalu Indians know and love, prompting our
senior FSN to comment that the MEA must have scared him silly prior to his
meeting the Ambassador. Lalu was a gracious and perfect host, ensuring that a
sizable fraction of Rail Bhavan's 1.4 million workers catered to our
hospitality needs during the 30 minutes we were there. It was an unforgettable
experience. MULFORD
Cable reference id:
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Origin
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Cable time
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Fri, 3 Oct 2008 12:25 UTC
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Classification
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UNCLASSIFIED//FOR OFFICIAL USE
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History
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VZCZCXRO7892 RR RUEHAST RUEHBI
RUEHCI RUEHLH RUEHPW DE RUEHNE #2645/01 2771225 ZNR UUUUU ZZH R 031225Z OCT 08
FM AMEMBASSY NEW DELHI TO RUEHC/SECSTATE WASHDC 3674 INFO RUCNCLS/ALL SOUTH AND
CENTRAL ASIA COLECTIVE RUCPDOC/DEPT OF COMMERCE WASHDC RHEBAAA/DEPT OF ENERGY
WASHDC RUEATRS/DEPT OF TREASURY WASHDC RULSDMK/DEPT OF TRANSPORTATION WASHDC
RHMFIUU/FAA NATIONAL HQ WASHINGTON DC RUEHRC/DEPT OF AGRICULTURE WASHDC
Hide header UNCLAS SECTION 01 OF
04 NEW DELHI 002645 SIPDIS SENSITIVE STATE FOR SCA/INS AND EEB USDOC FOR
ITA/MAC/OSA/LDROKER/ASTERN/KRUDD DEPT OF ENERGY FOR A/S KHARBERT, TCUTLER,
CZAMUDA, RLUHAR DEPT PASS TO USTR CLILIENFELD/AADLER/CHINCKLEY DEPT PASS TO
TREASURY FOR OFFICE OF SOUTH ASIA MNUGENT TREASURY PASS TO FRB SAN
FRANCISCO/TERESA CURRAN USDA PASS FAS/OCRA/RADLER/BEAN/CARVER/RIKER EEB/CIP DAS
GROSS, FSAEED, MSELINGER DEPT PASS TO USTDA HSTEINGASS/JNAGY E.O. 12958: N/A
TAGS: EAGR [Agriculture and Forestry], EAIR [Civil Aviation], ECON [Economic Conditions], ECPS [Communications and Postal Systems], EFIN [Financial and Monetary Affairs], EINV [Foreign Investments], ENRG [Energy and Power], EPET [Petroleum and Natural Gas], ETRD [Foreign Trade], BEXP [Trade Expansion and Promotion], KIPR [Intellectual Property Rights], KWMN [Women Issues], PHUM [Human Rights], SENV [Environmental Affairs], ASEC [Security], IN [India; Andaman Islands; Lakshadweep Islands; Nicobar
Islands] SUBJECT: NEW DELHI WEEKLY ECON OFFICE HIGHLIGHTS FOR THE
WEEK OF SEPTEMBER 29 TO OCTOBER 3, 2008 ¶1. (U) Below is a compilation of economic
highlights from Embassy New Delhi for the week of September 29 to October 3,
2008, including the following: -- MOCI PROPOSES EXPANSION OF FDI IN RETAIL --
NEW MANUFACTURING POLICY IDEAS - MOVE IN RIGHT DIRECTION? -- TWO LARGE RAILWAY
PROJECTS WITH US INVOLVEMENT CHUGGING FORWARD --ECONCOUNS VISIT TO KOLKATA --
POLITICS AS USUAL IN WEST BENGAL -- USTDA GRANTS CONTINUE TO SUPPORT U.S.-INDIA
ENERGY DIALOGUE MOCI PROPOSES EXPANSION OF FDI IN RETAIL
----------------------------- ¶2. (U) Following Commerce Minister Nath's
comments in France on October 1 that India will look at removing the 51% cap on
FDI in single-brand retail, local press reported in Delhi that the Ministry had
forwarded a proposal for 100% FDI in single brand retail to the Cabinet for
approval. The proposal supposedly also includes allowing FDI in multi-brand
retail for the first time, up to 51%, although limited to single-industry
retailers of electronics, computers, sporting goods, and watches. Grocery and
consumer goods retail would remain off-limits to FDI for the time being. The
proposal is also reported to include a requirement that foreign retailers with
more than 51% equity would have to source at least 50% of their goods from
within India .
The Ministry had pushed a proposal in 2007 for specialty multi-brand FDI, but
it was opposed by the Left parties. With the Left's withdrawal of support to
the government in July, the Ministry perceives a chance to enhance FDI in
retail. Increasing FDI in retail does not require legislation, only Cabinet
approval. NEW MANUFACTURING POLICY IDEAS - MOVE IN RIGHT DIRECTION?
-------------------------------- ¶3. (U) A senior group of advisors headed by the
National Manufacturing Competitiveness Council (NMCC) Chairman V. Krishnamurthy
recently released its report recommending a manufacturing policy to reverse
deceleration in growth in the sector. It includes proposals to link FDI
approvals to commitments on technology transfer. The report makes several
recommendations for specific issues relating to technology transfer, trade,
tax, public sector enterprises, infrastructure development, and labor reforms
while emphasizing the state's intervention for domestic value addition and
small and medium enterprises protection in view of increased competition by
Chinese goods. ¶4. (U) According to the report, India 's FDI
policy for the manufacturing sector is "very liberal" and it
recommends re-examination of the present policy of permitting 100 percent
subsidiaries of foreign companies in this sector. Another recommendation points
to the need to counter the damage to the domestic industry due to increased
duty-free imports of power generating equipment. The report also highlights the
original purpose of promoting SEZs for attracting investment into the
manufacturing sector and recommends the GOI consider SEZs to be economic zones
with no fiscal concessions but with world class infrastructure. ¶5. (U) In January 2008, Prime Minister Singh
established a core group of secretaries representing finance, revenue,
commerce, textiles, and industry to carefully examine decelerated growth of the
manufacturing sector and make recommendations to improve productivity of this
sector. The Confederation of Indian Industry (CII) has welcomed the core
group's recommendations. In a press release, CII stated that the NMCC-supported
manufacturing policy will help give the required thrust to manufacturing growth
over the short- and long-term. According to industry estimates, India 's manufacturing sector has been
contributing about 17 percent to the NEW
DELHI 00002645 002 OF 004 GDP and has witnessed growth
of 7.8 percent in 2007-08. ¶6. (SBU) COMMENT: While the report advances
some recommendations that would focus directly on manufacturing development
issues, it also contains worrisome protectionist recommendations such as the
FDI limitations. These provisions not only fall short of addressing the real
problems plaguing slower growth rates in manufacturing, but could harm the
sector by discouraging competition. Post will monitor reaction by the
government and industry to the NMCC's manufacturing policy in the coming weeks.
END COMMENT. MAJOR RAILWAY TENDER TO BE AWARDED TO ONE OF TWO US FIRMS CHUGGING
FORWARD --------------------------------------- ¶7. (U) The GOI decided last week to release the
Request for Proposal for a $5 billion diesel locomotive project, which will be
awarded to one of two American firms. Globally only GE and EMD produce diesel
locomotives; they are, therefore, the only bidders on the project to supply
1000 diesel locomotives and build a locomotive factory in Bihar .
The RFP includes $3 billion for equipment to be procured over 10 years, with
production gradually shifting to the new Indian plant. The remaining $2 billion
will go towards maintenance and service of the locomotive fleet. Awarding the
project is expected to take place in the first quarter of 2009. ECONCOUNS VISIT
TO KOLKATA -------------------------- ¶8. (U) During his Kolkata visit September
29-October 1, U.S. Embassy, New Delhi , Econ
Minister Counselor John Davison met prominent Kolkata contacts, including
senior officials of the West Bengal
government, business journalists, industry associations AMCHAM, Indian Chamber
of Commerce and NASSCOM, and independent consultants PricewaterhouseCoopers.
Davison also addressed MBA students at the Indian Institute of Social Welfare
and Business Management which is India 's first business school. ¶9. (SBU) Two subjects dominated conversations
Congen interlocutors had with Davison. The status of the U.S. financial
markets was the top concern. NASSCOM sources expressed concern that Indian IT
companies would soon get requests from their U.S. clients to delay or reschedule
payments for services rendered, or cancellation/postponement of planned IT
infrastructure investments in the mid-term. A business journalist predicted
that the U.S. financial
crisis would lead to a severe long term financing crunch for energy
infrastructure projects in India ,
slowing down investment and expansion in other sectors of the economy. However,
there was a general consensus that the Indian financial system was more immune
to the U.S.
crisis than most because it is more tightly regulated relative to others. ¶10. (SBU) The situation in Singur also featured
prominently in the conversations. There was a consensus that the Singur
incident will have an adverse impact on West Bengal 's
image as an investment destination. But many also argued that the state has
strong economic fundamentals and there is a consensus on the need for
industrialization. Trinamul Congress leader and former Member of Parliament
(Rajya Sabha) Mr. Dinesh Trivedi (please protect) provided a different - his
party's -- perspective on the controversy. He said Trinamul Congress was not
averse to either the project or investor (Tata Motors). His party's opposition
was to the unfair manner in which the entire project was conceived and managed.
¶11. (SBU) Trivedi said that, since the state
government was extending fiscal incentives to Tata, including a sales tax
holiday, the public had the right to know how their money was being used. He
alleged that Tata Motors collected hefty amounts by sub-leasing the land to
component suppliers who set up their facilities adjacent to the Nano plant.
Large profits from land speculation enable Tata to sell the Nano cheaply at USD
2,500. Trivedi compared it to the U.S. NEW DELHI 00002645 003 OF 004 bailout of
financial institutions, i.e., the West Bengal
government was diverting public money to enrich a private investor. POLITICS AS
USUAL IN WEST BENGAL
-------------------------------- ¶12. (SBU) Political wrangling also threatened
to derail the German Metro cash and carry project in Kolkata. Blocking the
project was the Forward Bloc party which is the Communist Party's (CPM's)
coalition ally in West Bengal . A minister
loyal to the Forward Bloc runs the Department of Agricultural Marketing which
grants licenses to vendors of farm products. The Forward Bloc is opposed to any
move toward allowing Foreign Direct Investment (FDI) in multi-brand retail (which
is currently banned nationally), and although Metro will run only wholesale -
and not retail - operations in Kolkata, the Agricultural Marketing Department
refused to renew the license it granted to the company in 2006. With Metro
ready to start its operations, the entire project was threatened and the German
consul general in Kolkata intervened, stating publicly that investment from his
country will bypass West Bengal if Metro's
license was not renewed. ¶13. (SBU) In an unprecedented move, Chief
Minister Buddhadeb Bhattacharjee exercised his executive power and directed the
Agricultural Marketing department to renew Metro's license. This created a
political crisis, with Forward Bloc threatening to withdraw from the state
government. Later, the Left Front political leaders met and resolved the
crisis. It was decided that Metro's license will be renewed by October 10 with
"certain conditions." These "conditions" will likely
include a provision that each billing for an identified product must not be
less than Rs. 50,000. USTDA GRANTS CONTINUE TO SUPPORT U.S.-INDIA ENERGY
DIALOGUE ----------------------------- ¶14. (U) This week USTDA ended FY 2008 by
awarding two grants over the last two days, totaling almost $900,000 that
further the agency's commitment to the objectives of the U.S.-India Energy
Dialogue. Since 2005, USTDA has provided over $3.5 million, and leveraged more
than an additional $1 million, in funding for project studies, not only in
refinery process modernization, but also in coal bed methane development and
alternate coal mining technology, as well as technical assistance in the
development of new regulatory structures for India 's expanding oil and gas
industries. ¶15. (U) The first grant, to India 's Petroleum and Natural Gas Regulatory
Board (PNGRB), will be used to promote competition in India 's oil and
gas sector through the development of a more transparent regulatory
environment. The second grant, to Hindustan Petroleum Corporation Limited (HPCL),
will fund investment analysis on a refinery bottoms upgrades project for its
refinery in Mumbai. ¶16. (U) The PNGRB was established by the
Government of India in 2006 to develop and consolidate regulation of many
critical areas of the growing Indian oil and gas business. Currently, the
agency is seeking expert assistance from partner countries in order to develop
and improve its competencies in regulatory processes and rulemaking. The
$348,339 USTDA grant awarded today will support this effort by funding a series
of technical workshops in India
and the United States , site
visits to U.S. federal and
state regulatory authorities and private industry, and internships for PNGRB
personne at a U.S.
public utility commission. In particular, the grant will assist the PNGRB in
developing midstream and downstream regulations in the areas of pricing,
utility accounting and monitoring, safety, and licensing of infrastructure
development for the oil and gas sector. ¶17. (U) The PNGRB has selected the National
Association of Regulatory Utility Commissioners (NARUC), a non-profit
organization based in Washington
D.C. NEW DELHI 00002645 004 OF 004 commissioners (oil and gas,
water, and electricity) from each of the state governments in the United States
for more than 100 years. In addition to the USTDA grant, NARUC will provide
additional resources toward the project's completion. ¶18. (U) HPCL is planning to upgrade its
petroleum refinery in Mumbai ,
India Houston ,
Texas New Delhi 's Classified Website:
http://www.state.sgov/p/sa/newdelhi MULFORD
Cable reference id: #08NEWDELHI2826
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Reference id
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aka Wikileaks id #176160 ? |
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Cable time
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Fri, 31 Oct 2008 11:05 UTC
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Classification
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UNCLASSIFIED//FOR OFFICIAL USE
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VZCZCXRO9995 RR RUEHAST RUEHBI
RUEHCI RUEHLH RUEHPW DE RUEHNE #2826/01 3051105 ZNR UUUUU ZZH R 311105Z OCT 08
FM AMEMBASSY NEW DELHI TO RUEHC/SECSTATE WASHDC 3963 INFO RUCNCLS/ALL SOUTH AND
CENTRAL ASIA COLLECTIVE RUCPDOC/DEPT OF COMMERCE WASHDC RHEBAAA/DEPT OF ENERGY
WASHDC RUEATRS/DEPT OF TREASURY WASHDC RULSDMK/DEPT OF TRANSPORTATION WASHDC
RHMFIUU/FAA NATIONAL HQ WASHINGTON DC RUEHRC/DEPT OF AGRICULTURE WASHDC
Hide header UNCLAS SECTION 01 OF
02 NEW DELHI 002826 SIPDIS SENSITIVE STATE FOR SCA/INS AND EEB USDOC FOR
ITA/MAC/OSA/LDROKER/ASTERN/KRUDD DEPT OF ENERGY FOR A/S KHARBERT, TCUTLER,
CZAMUDA, RLUHAR DEPT PASS TO USTR CLILIENFELD/AADLER/CHINCKLEY DEPT PASS TO
TREASURY FOR OFFICE OF SOUTH ASIA MNUGENT TREASURY PASS TO FRB SAN
FRANCISCO/TERESA CURRAN USDA PASS FAS/OCRA/RADLER/BEAN/CARVER/RIKER EEB/CIP DAS
GROSS, FSAEED, MSELINGER E.O. 12958: N/A TAGS: EAGR [Agriculture and Forestry], EAIR [Civil Aviation], ECON [Economic Conditions], ECPS [Communications and Postal Systems], EFIN [Financial and Monetary Affairs], EINV [Foreign Investments], ENRG [Energy and Power], EPET [Petroleum and Natural Gas], ETRD [Foreign Trade], BEXP [Trade Expansion and Promotion], KIPR [Intellectual Property Rights], KWMN [Women Issues], PHUM [Human Rights], SENV [Environmental Affairs], ASEC [Security], IN [India; Andaman Islands; Lakshadweep Islands; Nicobar
Islands], EMIN [Minerals and Metals] SUBJECT: NEW DELHI WEEKLY
ECON OFFICE HIGHLIGHTS FOR THE WEEK OF OCTOBER 27 TO OCTOBER 31, 2008 ¶1. (U) Below is a compilation of economic
highlights from Embassy New Delhi for the week of October 27 to October 31,
2008, including the following: -- CHINESE SLOWDOWN HITS KARNATAKA -- JBIC TO
FUND THE WESTERN DEDICATED FREIGHT CORRIDOR CHINESE SLOWDOWN HITS KARNATAKA -------------------------------
¶2. (SBU) An economic slowdown in China appears
to be hitting Karnataka's iron-ore mining operations, one of the state's key industries,
which has become used to supplying the bulk of its production to Chinese
companies. The managing director of a northern Karnataka-based mining and
steel-producing concern told Consulate Chennai that the price for a ton of ore
-- driven largely by Chinese demand -- has fallen to USD 70 from USD 145 just
before the Olympic games in August. He also said that small mining operations
-- those that extract fewer than 100 tons per day -- were now closing
operations. He estimated that some 60 mines shuttered their doors since early
October. More prosaically, he noted that mine owners used to living a luxurious
lifestyle during boom times have had to cut their costs, for example by
traveling by car instead of by helicopter. ¶3. (SBU) Parts of the transportation sector
linked to this trade are also feeling the pinch. A Chennai Port Trust official
told us that the number of ore carriers coming into Chennai port has
"dropped drastically" in October with many shipping lines cancelling
voyages. The mining industry relies heavily on trucks (as many as 20,000,
according to some reports) to transport ore to ports for export, and truck
owners are suffering. With demand dropping, many truckers are unable to meet
their monthly loan repayments. A top Syndicate Bank official told us that his
officers are busy rescheduling payments for many truck owners. He noted that
repossessing these vehicles is generally unattractive because current economic
conditions mean that there are few potential buyers for repossessed vehicles.
JBIC TO FUND THE WESTERN DEDICATED FREIGHT CORRIDOR
--------------------------------------------- ------ ¶4. (U) The Delhi-Mumbai Western Freight
Corridor which will cover 1426 km and require an estimated expenditure of $4.7
billion has been guaranteed financial assistance from the Japanese government.
During Prime Minister Singh's visit to Tokyo on
October 22, both governments agreed to jointly initiate the first phase of the
project - the Rewari, Haryana-Vadodara, Gujarat
sector. The Japan Bank of International Cooperation (JBIC) will provide funding
through a low-interest official development assistance (ODA) Loan for
engineering services. The Japanese ODA lending defies an OECD determination
that the freight corridor project should not be eligible for concessional
lending terms. For the first phase, the loan is estimated to be approximately
450 billion yen (USD 4.6 billion), based on the provisional project design. In
a joint statement, both countries pledged their commitment to work together on
the entire Western corridor project, under the Special Economic Partnership
Initiative (SEPI). SEPI is an initiative by India
and Japan
to support early completion of the dedicated freight corridor (DFC) and support
promotion of the Delhi-Mumbai Industrial Corridor. ¶5. (SBU) Worldwide, India is the largest beneficiary of
JBIC funding (6.5% share or $13.2 billion), with an overall loan portfolio of
$184.4 billion. JBIC agreed to financially support the DFC project after the
Indian Railways relented and decided to electrify the western freight corridor.
Electrification of both the Eastern and Western freight corridors limits the
ability of U.S.
business to participate as they are not competitive in the electric
locomotive/rolling stock market. To begin the first phase of this project, the
Ministry of Indian Railways has issued a notification for acquisition of land
from 59 villages in the western state of NEW DELHI
00002826 002 OF 002 Gujarat . Land acquisition
for development remains a volatile issue in India . Farmers in Bhrauch and
Vadodara have opposed the move and are demanding higher compensation for their
land. ¶6. (U) Visit New Delhi 's Classified Website:
http://www.state.sgov/p/sa/newdelhi MULFORD
Cable reference id:
#09NEWDELHI1211
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 aka Wikileaks id #211554 ? |
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Subject
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Fs Menon And U/s Burns Discuss
New Strategic Dialogue Architecture And Bilateral Issues
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Thu, 11 Jun 2009 17:55 UTC
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CONFIDENTIAL
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VZCZCXRO6689 OO RUEHBI RUEHCI
RUEHDBU RUEHLH RUEHNEH RUEHPW DE RUEHNE #1211/01 1621755 ZNY CCCCC ZZH O
111755Z JUN 09 FM AMEMBASSY NEW DELHI TO RUEHC/SECSTATE WASHDC IMMEDIATE 6950
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE RUCPDOC/DEPT OF COMMERCE
WASHDC RUEAIIA/CIA WASHDC RHEBAAA/DEPT OF ENERGY WASHINGTON DC RUEKJCS/JOINT
STAFF WASHDC RHEHNSC/NSC WASHDC RUEKJCS/SECDEF WASHDC RUEHUNV/USMISSION UNVIE
VIENNA 1769 RUCNDT/USMISSION USUN NEW YORK 8154
Hide header C O N F I D E N T I A
L SECTION 01 OF 05 NEW DELHI 001211 SIPDIS DEPARTMENT OF ENERGY FOR TOM CUTLER,
ROBERT BOUDREAU, MARY GILLESPIE E.O. 12958: DECL: 06/10/2019 TAGS: PREL [External Political Relations], PARM [Arms Controls and Disarmament], TSPL [Science and Technology Policy], KNNP [Nuclear Non-Proliferation], ETTC [Trade and Technology Controls], ENRG [Energy and Power], TRGY [Energy Technology], IN [India; Andaman Islands; Lakshadweep Islands; Nicobar
Islands] SUBJECT: FS MENON AND U/S BURNS DISCUSS NEW STRATEGIC DIALOGUE
ARCHITECTURE AND BILATERAL ISSUES Classified By: CDA Peter Burleigh for Reasons
1.4 (B and D) ¶1. (C) SUMMARY. Foreign Secretary Menon and
visiting Under Secretary for Political Affairs Bill Burns discussed a new
architecture for the Strategic Dialogue and a variety of bilateral and regional
issues during several meetings June ¶10. Remarking on the substantial overlap in
thinking on how to restructure the Strategic Dialogue, they agreed on the need
for an over-arching mechanism for a periodic review of progress by the
Secretary of State and External Affairs Minister, as well as a streamlined set
of dialogues to be grouped under the U.S.-proposed six thematic pillars. Menon
proposed a new Health Cooperation Framework and three new dialogues: (1)
Education, (2) Consular Issues, and (3) Sustainable Energy, Development and
Climate Change. Menon also proposed broadening the Energy Dialogue; reviving
the Strategic Stability Talks, including a large component on nonproliferation;
and reconstituting the CEO Forum, with diminished participation from the
finance sector. Menon agreed to consider continuing the Global Issues Forum and
establishing a dialogue on women's empowerment. Menon also suggested the
establishment of a separate bilateral channel to coordinate more closely on
nonproliferation, including conclusion of a Fissile Material Cut-off Treaty
(FMCT). ¶2. (C) SUMMARY CONTINUED. Menon and Burns also
identified opportunities for progress on a range of bilateral issues prior to
the Secretary's visit. On civil nuclear cooperation, Menon welcomed Burns'
proposal to begin reprocessing consultations on July 20 and expressed his
conviction that the government would designate reactor park sites for U.S. firms and
submit liability legislation to Parliament prior to the Secretary's visit. He
requested assistance in educating Indian officials and firms on U.S. export
licensing requirements. Menon shared a new draft agreement on End Use
Monitoring (EUM) and affirmed the goal of concluding an agreement before the
Secretary's visit. The U.S.
will propose dates in August prior to the Secretary's visit to begin
negotiations on a Bilateral Investment Treaty (BIT). Ambassador Shankar
proposed working toward an agreement to avoid double payment of Social Security
by temporary workers in the U.S.
and India ,
and Menon expressed an interest in negotiating a prisoner transfer agreement.
Menon did not yield on a pending request for a building permit for the Mumbai
Consulate, but agreed to explore options to keep the issue off the Secretary's
agenda during her visit. Menon confirmed that the Technology Safeguards
Agreement (TSA) could be signed after final approval by the Prime Minister's
office, and that India
was ready to sign an agreement to establish a Science and Technology
Commission, possibly during the Secretary's visit. Menon welcomed a visit by a U.S. team to discuss the Megaports program and
extended an open invitation to Secretary of Defense Gates to visit India . END
SUMMARY. ¶3. (SBU) Participants: Under Secretary William
Burns Assistant Secretary Robert Blake Charge d'Affaires Ambassador Peter
Burleigh Deputy Director of Policy Planning Derek Chollet Deputy Chief of
Mission Steven White Acting Political Counselor Les Viguerie Acting Economic
Counselor John Fennerty P Staff Tom West Political Officer David Holmes
(note-taker) Foreign Secretary Shivshankar Menon Ambassador to the United
States Meera Shankar Joint Secretary for the Americas Gaitri Kumar Joint
Secretary for Bangladesh, Sri Lanka, Maldives, and Myanmar T.S. Tirumurti Menon
and Burns Discuss Strategic Dialogue and Bilateral Issues - - - ¶4. (C) Foreign Secretary Menon welcomed
visiting Under Secretary for Political Affairs Bill Burns on his first visit to
New Delhi as
Under Secretary June 10. Over the course of NEW DELHI 00001211 002 OF 005 an
initial one-on-one meeting, a bilateral session, and a regional issues lunch
(septel), they discussed a revised Strategic Dialogue architecture, identified
opportunities for progress in the bilateral relationship prior to the Secretary's
visit, and shared perspectives on regional security. Open and upbeat, Menon
remarked "not just on the compatibility, but also the congruence" of
views on how to advance the Strategic Partnership. Menon observed that foreign
policy had not turned out to be a divisive electoral issue in India 's
April-May parliamentary elections, concluding that the election results
provided a "clear and renewed" mandate for further progress in
U.S.-India relations. Menon relayed Prime Minister Singh's message that India was ready
for "a new phase of sustained bilateral engagement to take our strategic
partnership to a new level." Burns shared the President's and Secretary's
message that "this is a moment of enormous promise in our strategic
partnership." Agreement on A New Strategic Dialogue Architecture - - - ¶5. (C) Menon and Burns remarked on the
substantial overlap in thinking on how to restructure the Strategic Dialogue,
including the need for an over-arching mechanism for a periodic review of
progress by the Secretary and External Affairs Minister Krishna. Menon added
that there would also be a need for a series of high-level visits by other
senior ministers. In the one-on-one meeting, Menon welcomed a visit by the
Secretary this summer. He supported the idea of issuing a joint statement
during the visit and agreed to review a preliminary draft when available. ¶6. (C) Menon also affirmed the U.S. idea of
structuring the Strategic Dialogue around six thematic pillars. He suggested
pruning back the 29 bilateral dialogues to a total of 17, including several
new, restructured, or expanded dialogues. In sum, he proposed adding three new
dialogues on Education, Consular Issues, and Sustainable Energy, Development
and Climate Change; establishing a new Health Cooperation Framework; broadening
the Energy Dialogue; reviving the Strategic Stability Talks, including a large
component on disarmament and nonproliferation; and reconstituting the CEO
Forum, perhaps with a diminished emphasis on participants from the finance
sector. Menon agreed as a next step to review a proposal on how to group his
streamlined list of 17 dialogues under the rubric of six pillars. Strategic
Stability and Nonproliferation - - - ¶7. (C) Menon praised the High Technology
Cooperation Group (HTCG) for its achievements, but observed that much work
remained, including a review of the Entities List in light of progress on civil
nuclear cooperation. Menon hoped the proposed Strategic Stability Talks could
address a range of nonproliferation issues. Compliance with the guidelines of
the Nuclear Suppliers Group (NSG) and Missile Technology Control Regime (MTCR)
was in India 's interest,
according to Menon, and India
would like to be a full member of the groups. Burns agreed that while NSG
membership may not be possible presently, continuing discussions would be
useful. India would continue
to support the Proliferation Security Initiative (PSI) in practice, but could
not formally endorse the PSI principles, which are based in the Suppression of
Unlawful Acts at Sea (SUAS) convention that included language that could be
read as targeting India
as a non-signatory of the Nuclear Nonproliferation Treaty (NPT). Menon joked
that he hoped our lawyers could find a fix. ¶8. (C) Menon proposed the establishment of a
bilateral channel to coordinate more closely on nonproliferation, including
efforts to ratify the Comprehensive Test Ban Treaty (CTBT) and conclude a
Fissile Material Cut-off Treaty (FMCT). Menon observed that although the U.S. and India may disagree on timing and
tactics, we share the long-term goal of eliminating nuclear weapons. Burns
suggested that President Obama's proposal of a conference on nuclear safety and
security would add momentum to these efforts. Menon also said India wanted to work together toward the
establishment NEW DELHI
00001211 003 OF 005 of International Nuclear Fuel Banks. Civil Nuclear
Cooperation and Energy - - - ¶9. (C) On civil nuclear cooperation, Menon
thanked Burns for sharing a paper proposing that reprocessing consultations
begin on July 20 and asserted that progress on the reprocessing consultations
would help marginalize the lingering concerns of nay-sayers in India . Burns
stressed the importance of designating a second reactor park site for U.S. firms --
in addition to the site in Andhra Pradesh Menon identified -- before the
Secretary's visit. Menon added that the government was considering two sites on
the West coast to balance the two U.S.
sites geographically (Note: And presumably to rule out sites in West Bengal and Orissa). India was in the process of
preparing its facilities declaration for the IAEA. Menon confirmed that the new
Cabinet would have to approve the Convention on Supplementary Compensation for
Nuclear Damage before submitting the liability legislation to Parliament, but
dismissed it as routine and said he hoped this could be done prior to the
Secretary's visit. Menon said the Additional Protocol was "already in
force, as far as I'm concerned," and that he was not sure what needed to
take place for the ratification to be complete, adding that India was
"waiting to hear from the IAEA." Menon said the Indian government and
Indian firms were confused "as usual" by U.S. licensing requirements. He
requested that we find a way to provide "a practical level of comfort to
those who actually have to seek licenses." ¶10. (C) Menon proposed that the broadened
Energy Dialogue including not just civil nuclear energy, but also energy
efficiency, renewables, and better approaches to oil and coal. He said India was
interested in President Obama's Renewable Energy Partnership. Now that India has a
national energy strategy, Menon said ministries across the government are keen
to engage. Cooperation will also help with dialogue on climate change. Burns
stressed the need to launch cooperation quickly with a view toward a good
outcome at the Major Economies Forum in July. End Use Monitoring, Defense
Policy, and Counter-Terrorism - - - ¶11. (C) Burns and Menon agreed that concluding
an agreement on End Use Monitoring (EUM) before the Secretary's visit should be
a top priority. Menon suggested that an agreement on EUM would
"unlock" progress on the Communications Interoperability and Security
Memorandum of Understanding (CISMOA) and the Logistics Support Agreement (LSA),
adding that these would not be difficult once EUM was resolved. More broadly,
Menon proposed continuing with the existing Defense Policy Group, adding that
technical level groups may need updating. He said he hoped the Group could look
at opportunities in co-production of defense hardware, joint research and
development, and technology transfer, adding, "We've become very ambitious
for our relationship." Menon also issued an open invitation for a visit
from Secretary of Defense Gates. ¶12. (C) Menon supported a continuation of the
Joint Working Group on Counter-terrorism and said he hoped Home Minister
Chidambaram could visit the U.S.
soon. Ambassador Shankar added that India would like to expand
intelligence sharing and increase exchanges with the Department of Homeland
Security. Menon stressed the importance of training and capacity building. He
said the government needed to formalize much of the progress achieved since the
Mumbai attacks. Menon said he would welcome a visit to discuss the Megaports program.
Economic Issues, Social Security, Science and Technology - - - ¶13. (C) Burns said the U.S. was ready to begin negotiations toward a
Bilateral Investment Treaty (BIT) as soon as India was ready. Menon agreed and
welcomed proposed dates from the US
in August following the conclusion of the Budget parliament session, with an
agreement on dates prior to the NEW
DELHI 00001211 004 OF 005 Secretary's visit. Menon
would like to hold a reconstituted CEO forum in September on the margins of
UNGA and said he would solicit a list of topics. Indian business is
increasingly concerned about rising protectionism in the U.S. , according
to Menon, who proposed that the Economic Dialogue think about how to address
this concern. Burns replied that the U.S. Trade Representative had touched on
the issue in his meeting with the Indian Trade Minister in Bali
and agreed that it would be useful to carry forward the conversation.
Ambassador Shankar said that the Indian government understood that a Social
Security Totalization agreement was not in the cards, and proposed as an
alternative an agreement to avoid double payment of Social Security by
temporary workers in the U.S.
and India .
Burns requested a paper providing further details. At Burns' request, Menon
promised to follow up on the tender won by General Electric to build a railroad
locomotive plant in Bihar , which had been
canceled at the last cabinet meeting before the elections. ¶14. (C) The Technology Safeguards Agreement
(TSA) would be ready to sign as soon as it is cleared by Prime Minister Singh;
Menon said if it was not possible during U/S Burn,s visit it would be ready for
signature before the Secretary,s visit. Menon also said India was ready
to sign an agreement to establish a science and technology commission, possibly
during the Secretary's visit. Menon stressed that the proposed Science and
Technology Forum (STF) was not meant to be solely government-to-government, but
should also include private sector representatives as well as possibly
universities. In response to Assistant Secretary Blake's suggestion that a private
sector commission could provide recommendations, Menon agreed, but said he
hoped those suggestions could be fed into each group and then aggregated,
rather than establishing a separate mechanism. Consulates and Consular Issues -
- - ¶15. (C) Menon welcomed Burns' description of
ongoing efforts to address India 's
concerns in the New York Tax Case, but did not yield on a pending request for a
building permit for the Mumbai Consulate. He agreed to explore options -- such
as allowing work to go forward while withholding the final occupancy permit --
to keep the issue off the Secretary's agenda during her visit. Menon flagged India 's interest in opening consulates in Atlanta and Seattle , and
said India would welcome a
new U.S. consulate in Bangalore . Menon was
grateful for progress on speeding up the processing of Visas Mantis cases. He
said he envisioned a Dialogue on Consular Issues being broader than just
passports and visas, and he noted India 's interest in a prisoner
transfer agreement. Agriculture, Education, Global Issues - - - ¶16. (C) Menon said India had not proposed a separate
dialogue on agriculture because the Agriculture Knowledge Initiative had not
worked well due to bureaucratic mismatch, leaving the participants without
direct counterparts feeling of "ships passing in the night." He said
agriculture cooperation remained a GOI priority and, in order to avoid a repeat
of the AKI -- where market access, research and applied agricultural issues
became entangled and unproductive -- the GOI preferred to deal with them in the
existing dialogues, e.g., market access in the Trade Policy Forum and research
in the S&T dialogue. A/S Blake responded that the U.S. was
reviewing a number of creative ideas for agriculture cooperation and would
share them shortly, which Menon welcomed. ¶17. (C) Menon proposed a new Education
Dialogue, folding in the work from the CEO Forum. He said he hoped the new
Education Minister would visit the U.S. very soon. Assistant Secretary
Blake observed that the enormous interest from U.S.
universities to establish campuses in India could serve as a catalyst to
increase cooperation in education and suggested that the Dialogue should be
informed by the views of a wide range of education stakeholders. Menon agreed
to consider continuing the Global Issues Forum and also agreed that a NEW DELHI 00001211 005 OF
005 proposal for a dialogue on women's empowerment made sense. ¶18. (U) Under Secretary Burns cleared this
message. BURLEIGH
Annexure P-2
Cable reference id:
#07NEWDELHI4272
“All of them, those in power, and
those who want the power, would pamper us, if we agreed to overlook their
crookedness by wilfully restricting our activities.” — “Refus
Global“, Paul-Émile Borduas
Main • Full-text search • Private cart • Browse tags • Overview • History • Media • Crowdsource Central • Manning’s alleged chat logs diff • Donate
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Reference id
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aka Wikileaks id #122608 ? |
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Subject
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Ambassador Discusses Ceo Forum
Issues With Planning Commission Deputy Chairman Ahluwalia
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Origin
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Cable time
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Tue, 18 Sep 2007 12:16 UTC
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Classification
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UNCLASSIFIED//FOR OFFICIAL USE
ONLY
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Source
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History
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O 181216Z SEP 07 FM AMEMBASSY NEW
DELHI TO RUEHC/SECSTATE WASHDC IMMEDIATE 8314 INFO RUEHCG/AMCONSUL CHENNAI 1496
RUEHCI/AMCONSUL KOLKATA 0853 RUEHLH/AMCONSUL LAHORE 4124 RUEHBI/AMCONSUL MUMBAI
0588 RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE RHEBAAA/DEPT OF ENERGY
WASHDC RUEATRS/DEPT OF TREASURY WASHDC RHEHNSC/NSC WASHDC RUCPDOC/DEPT OF
COMMERCE WASHDC
Hide header UNCLAS SECTION 01 OF
02 NEW DELHI 004272 SIPDIS SENSITIVE SIPDIS DEPT FOR NEC DIRECTOR HUBBARD USDOC
FOR ITA/MAC/OSA/LDROKER/ASTERN/KRUDD DEPT OF ENERGY FOR A/S KHARBERT, TCUTLER,
CZAMUDA, RLUHAR DEPT PASS TO USTR DHARTWICK/CLILIENFELD/AADLER DEPT PASS TO
TREASURY FOR OFFICE OF SOUTH ASIA ABAUKOL TREASURY PASS TO FRB SAN
FRANCISCO/TERESA CURRAN STATE FOR P, SCA/INS AND EB/TRA JEFFREY HORWITZ AND TOM
ENGLE E.O. 12958: N/A TAGS: EFIN [Financial and Monetary Affairs], EINV [Foreign Investments], EPET [Petroleum and Natural Gas], ETRD [Foreign Trade], SENV [Environmental Affairs], PREL [External Political Relations], PARM [Arms Controls and Disarmament], TSPL [Science and Technology Policy], KNNP [Nuclear Non-Proliferation], TRGY [Energy Technology], IN [India; Andaman Islands; Lakshadweep Islands; Nicobar
Islands] SUBJECT: AMBASSADOR DISCUSSES CEO FORUM ISSUES WITH
PLANNING COMMISSION DEPUTY CHAIRMAN AHLUWALIA NEW DELHI 00004272 001.2 OF 002 ¶1. (SBU) Summary: The Ambassador met September
14 with Planning Commission Deputy Chairman Montek Ahluwalia to discuss the
upcoming CEO Forum, mid-October visit to India by Energy Deputy Secretary
Sell for the APP and Energy Dialogue, and the end of October visit by Treasury
Secretary Paulson and NEC Director Hubbard. Ambassador also urged GOI
resolution of the outstanding legacy issues of McDermott and Dow Chemical. End
Summary. ¶2. (SBU) The Ambassador noted that the CEO
Forum was unique in that it was one of the few private sector forums that
attracted great interest and attendance from senior government officials. It
was therefore important that the September 24 discussion focus on critical
issues including infrastructure financing and the impact of inadequate IPR
protection on foreign investment in India that has lead to the recent decision
by the Swiss pharmaceutical company, Novartis, to pull out of India after its
latest patent application was denied. Ahluwalia agreed and said that he hoped
the U.S.-India civil nuclear agreement would not be on the agenda since the
ball was in India 's
court to move forward in a process well known to everyone. Ambassador noted
that, at some point, prospects for U.S.
private sector investment in India 's
civil nuclear industry would be an appropriate discussion topic at the CEO
Forum, but not until the Agreement had been operationalized. Ahluwalia said
that he would discuss with Foreign Secretary Menon keeping the civil nuclear
agreement off the agenda, and Ambassador said that he would take it up with
Under Secretary Burns. ¶3. (SBU) The Ambassador said that it might be
useful to repeat the formula used in last year's successful CEO Forum by using
the lunch to follow up on important economic issues previously raised in the
morning meeting, and avoid topics like civil nuclear and the Doha Round that
will accomplish little in the short time available. Ahluwalia agreed and said
that CII and the Ministry of External Affairs had been discussing with State
and the NSC the idea of moving from one large rectangular table to several
round tables that would group CEOs and government officials according to their
interest in particular issues/topics. Ahluwalia added that the GOI intended to
present a 14 point non-paper on progress made and remaining/new issues that
could be useful for discussion and follow up after the meeting. Ahluwalia said
that Hubbard in a recent phone conversation said that the U.S. also
intended to raise agricultural/phyto-sanitary concerns. ¶4. (SBU) The Ambassador said that the October
29-30 visit of Treasury Secretary Paulson to India presented a great opportunity
to focus on creating a climate of finance for infrastructure. He added that
Paulson and his team will bring great knowledge and experience on financial
market supervision, regulatory issues, securitization, debt, and other key
areas. Ahluwalia said that he will be joining the Ambassador in the October 29
Infrastructure Conference in Mumbai that Paulson and Indian Finance Minister
Chidambaram will open. Ahluwalia noted that it would be helpful if there was
some movement on U.S.
approval of ICICI's and Bank of India's long-pending U.S. bank branch
applications. He added that there was a lot of irritation in MOF over this
issue, especially since Secretary Paulson had told Chidambaram a year ago that
there would be action. Despite the lack of progress, Ahluwalia noted that MOF
had recently approved three new branches in India for Citibank. Ambassador
responded that the delay was not due to protectionism on the U.S. part, but because of regulatory issues that
required India 's
establishment of an anti-money laundering/terrorist financing regime (AML/CTF)
that meets international standards. The Ambassador noted that India had
joined the Financial Action Task Force (FATF) as an observer with the goal of
full membership, which was a welcome step. Ahluwalia asked for a one page note
on outstanding issues related to AML/CTF that he could discuss with Chidambaram
before the CEO Forum. ¶5. (SBU) The Ambassador said that Deputy
Secretary of Energy Clay Sells will visit India in mid-October for the Asia
Partnership Program (APP) summit and the U.S.-India Energy Dialogue. He added
that Secretary Rice is also considering coming out for the APP. ¶6. (SBU) Aluwalia asked what the key deadlines
are for NEW DELHI
00004272 002.2 OF 002 operationalizing the Civil Nuclear Agreement. The
Ambassador said that there can be no Congressional vote until India has
reached agreement first with the IAEA, then the NSG. Given the 90 day
Congressional review requirement before a vote is possible, India would
have to conclude the first two steps by December in order to get a vote in
Congress by the end of February. After that, getting it on the Congressional
calendar next year would be much more difficult. Ambassador added that the U.S. has been
very quiet publicly on the Agreement since July in order to avoid
"stirring things up" for the GOI as it deals with political debate
here. Ahluwalia said that the issue in India is who will blink first,
Congress or the Left. For the Left, it is clear the issue is not the 123
Agreement, but the deepening U.S.-India relationship which they vehemently
oppose. Ahluwalia said that there are two possibilities if Congress calls the
Left's bluff: it could continue as a minority government until calling for
elections, or the Left could join with the BJP in bringing down the government,
leading to elections. In either case, Ahluwalia said the Government is
presently in a good political position to go into elections, but it would be
better to go to the polls on issues other than the 123 Agreement. ¶7. (SBU) Returning to the CEO Forum, the
Ambassador said that McDermott International CEO Nesbitt will be attending and
there are reports that the GOI may announce at the Forum that it is taking
steps to finally resolve this long outstanding legacy issue. Ambassador
cautioned that any action that fell short of expeditiously settling in full the
Supreme Court Judgment in favor of McDermott, such as a partial payment through
the bankruptcy proceedings, will go down badly and create major ill feelings in
the U.S.
business community. The Ambassador also cited the GOI's continued third party
claims against Dow Chemical in the ongoing Bhopal land reclamation lawsuit as a
further impediment by Dow and others to invest in India, and he asked that the
GOI drop its claims against Dow. Ahluwalia took the Ambassador's points on
McDermott, noting the importance of finally putting the issue to rest. On Dow,
he said that the GOI does not understand Dow's concern about future civil or
criminal liability since the GOI third-party claims do not suggest a GOI
presumption that Dow is responsible for the cleanup. The GOI's problem is that
the NGOs are very active and vocal in this case, and it is very difficult for
the Government to now drop its claims against Dow. The GOI was hoping for a
quick resolution of the case which would have settled the issue, but Dow prevented
this by asking for a stay in the proceedings. Ahluwalia noted that the issue of
whether a company like Dow can be held liable for the actions of another
company solely on the basis of acquiring that company after the culpable
activity occurred is an important and novel legal issue in India that
needs to be resolved. Ahluwalia recommended that the Ambassador discuss the
issue with Finance Minister Chidambaram - a noted jurist. ¶8. (SBU) Ambassador again stressed the
importance of the financial sector in upcoming U.S.-India discussions, noting
that a central economic issue for India is the long-term status of
its financial markets. He added that India 's
financial markets today have the makings for a regional financial center, given
India 's huge hinterland and
large and increasing savings rates that mirror the conditions in the U.S. banking
sector a generation ago. The Ambassador said that virtually all large U.S. banks were
once domestic-centered, before they went global. Ahluwalia agreed, noting that
the GOI (with MOF and Prime Minister approval) had just commissioned a High
Level Committee on Financial Sector Reforms, composed mostly of private sector
individuals, to make recommendations by next March on next steps in financial
sector reform. He added that, until India
ends the dominance of the State in the banking sector, there will never be a
level playing field for private or foreign banks that is necessary if India is to
establish itself as a regional financial center. MULFORD
Cable reference id:
#08NEWDELHI2367
“All of them, those in power, and
those who want the power, would pamper us, if we agreed to overlook their
crookedness by wilfully restricting our activities.” — “Refus
Global“, Paul-Émile Borduas
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Reference id
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aka Wikileaks id #168360 ? |
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Subject
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Ambassador Meets
With Montek Singh Ahluwalia
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Origin
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Thu, 4 Sep 2008 00:59 UTC
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CONFIDENTIAL//NOFORN
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History
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VZCZCXRO4795 OO RUEHBI RUEHCI
RUEHLH RUEHPW DE RUEHNE #2367/01 2480059 ZNY CCCCC ZZH O 040059Z SEP 08 FM
AMEMBASSY NEW DELHI TO RUEHC/SECSTATE WASHDC IMMEDIATE 3233 INFO RUCNCLS/ALL
SOUTH AND CENTRAL ASIA COLLECTIVE IMMEDIATE RUCNNSG/NUCLEAR SUPPLIERS GROUP
COLLECTIVE IMMEDIATE RUEAIIA/CIA WASHDC IMMEDIATE RHEBAAA/DEPT OF ENERGY
WASHINGTON DC IMMEDIATE RUEKJCS/JOINT STAFF WASHDC IMMEDIATE RHEHNSC/NSC WASHDC
IMMEDIATE RUEKJCS/SECDEF WASHDC IMMEDIATE RUEHUNV/USMISSION UNVIE VIENNA
IMMEDIATE 1623 RUCNDT/USMISSION USUN NEW YORK IMMEDIATE 6851
Hide header C O N F I D E N T I A
L SECTION 01 OF 05 NEW DELHI 002367 SENSITIVE SIPDIS E.O. 12958: DECL:
09/03/2028 TAGS: EAGR [Agriculture and Forestry], ECON [Economic Conditions], EDU [European Democratic Union], EINV [Foreign Investments], ENRG [Energy and Power], ETRD [Foreign Trade], ETTC [Trade and Technology Controls], IN [India; Andaman Islands; Lakshadweep Islands; Nicobar
Islands], KNNP [Nuclear Non-Proliferation], PARM [Arms Controls and Disarmament], PREL [External Political Relations], TRGY [Energy Technology], TSPL [Science and Technology Policy] SUBJECT:
AMBASSADOR MEETS WITH MONTEK SINGH AHLUWALIA 1. (C) Summary. Ambassador met
with Planning Commission Deputy Chairman Montek Singh Ahluwalia on September 2
to discuss upcoming high level bilateral meetings, including the President-Prime
Minister meeting on September 25 and the CEO Forum scheduled for October 14. In
addition, the Ambassador provided an update to Ahluwalia on the August 22-23
Nuclear Suppliers Group meeting in Vienna and his outlook for the second
meeting scheduled for September 4-5. End summary. AMBASSADOR REVIEWS NSG
DEVELOPMENTS ----------------------------------- ¶2. (C) First, Ambassador Mulford provided
Ahluwalia an update on events at the August 21-22 Nuclear Suppliers Group (NSG)
Plenary in Vienna .
The Ambassador expressed disappointment and shock at the positions that many of
the NSG members took. USG officials had engaged with the NSG members in the
lead-up to the Plenary and the members had signaled that they were
"supportive" but had "concerns." The Ambassador then noted
that NSG members submitted over 60 amendments in the Vienna
meeting to the draft NSG exception that the U.S. had submitted. Ambassador
Mulford observed that the surprising number of substantial amendments nearly
amounted to a question of good faith, with key NSG members' non-proliferation
advocates allowed the upper hand. ¶3. (C) The Ambassador described to Ahluwalia
how the meeting in Vienna
had 400 people ) minus the Indian delegation that had to remain outside ) with
all the chairs facing forward toward the Chairman's desk, in a configuration that
discouraged debate and enabled NSG members to offer tough amendments
semi-anonymously. Ambassador Mulford also explained to Ahluwalia that in the
briefing with the Indian delegation ) primarily Foreign Secretary Meno and
Special Envoy Shyan Saran ) during a scheduled break in the NSG Plenary, the
Indian side solicited questions from the NSG members. None were offered. US
representative John Rood also encouraged the participants to utilize the
opportunity to ask questions of the Indian delegation, but no one did. Looking
Forward --------------- ¶4. (C) The Ambassador then considered the next
steps. He noted that India
and the US have negotiated a
"clean" text, but that he anticipates it will be an extremely hard
sell in the next NSG meeting in Vienna
on September 4-5. Ambassador Mulford assured Ahluwalia that the US goal was to
try to keep the text "sacrosanct," with NSG member concerns limited
to comments in the Chairman's Summary. The Ambassador identified several text
changes that he thought would be unacceptable: the
"multilateralization" of the Hyde Act, and any language that demanded
automatic sanctions in response to further nuclear testing. Whether it would be
possible to avoid such language, Mulford didn't know. ¶5. (C) Secretary Rice had asked the Ambassador
to stay in Delhi
during the September 4-5 Vienna Plenary to engage the GoI if needed. Mulford
noted that National Security Advisor Narayanan had spoken with him that day and
was not happy to learn that the Ambassador would not be in Vienna to help move the deal through. Mulford
observed that one of the problems with the NSG meetings was the
representational mode )- that NSG members had designated their
non-proliferation advocates as participants at the Plenary rather than senior
political representatives who could see the big picture at stake. The big issue
for the NSG was whether the international nonproliferation system would be
stronger with India
on the inside. The US
delegation on September 4-5 would be led by State Department Under Secretary
for Political Affairs Bill Burns, which added weight to the meeting. ¶6. (C) Ambassador Mulford apprised Ahluwalia of
his discussions with the "Group of Six" like-minded country members
of the NSG ) Austria , Ireland , New
Zealand , Netherlands ,
Norway and Switzerland ) as well as with Canada and Japan . The Ambassador explained
that they needed to realize the importance of the NSG exception to India . The
Ambassador had pointed out to them that any country that blocks the NSG waiver
should understand that its relationship with India would not be able to meet
its maximum potential as India was likely to start a blame game, should the NSG
NEW DELHI 00002367 002 OF 005 exception not go through. Ahluwalia agreed that
political pressure was needed to keep the focus on the big picture. To that
end, Ambassador Mulford pointed out, President Bush and Secretary Rice were
making calls to the leadership of these countries; however, the
non-proliferation issues were often emotive for some countries. Some of the NSG
representatives in Vienna had never been to India and had
an outdated view of the country and the world today. ¶7. (C) Mulford pointed to the substantial
reductions in carbon-based emissions that would result from India ,s access to nuclear energy
made possible by the civil nuclear initiative. The Ambassador referenced an
estimate that the amount of coal substituted with nuclear energy in India over
the next twenty years was equivalent to half the amount of emissions from the
state of California and more than all of the EU25 emission cuts combined (Note:
according to a study by David Victor published by the Council on Foreign
Relations, July 18, 2006. End note). Ahluwalia responded that India,s lead
nuclear scientist, Department of Atomic Energy Chairman Dr. Anil Kakodkar, had
projected that by 2050 India's access to uranium through the civil nuclear
cooperation initiative would treble the amount of uranium India could process
and use toward nuclear energy, going from the equivalent of 200,000 MW of power
to 600,000 MW of power. But, Ahluwalia questioned, do the nonproliferation
people care? The Ambassador responded that they apparently did not, since they
went so far as to request that the statements in the NSG waiver text referring
to the energy benefits of the deal be removed. ¶8. (C) Ahluwalia opined that keeping the
language on energy benefits in the text was useful, if not to the NSG members,
then to a larger audience that would consider the text. The Ambassador
concurred, noting that it was important to get the text through the NSG quickly
so that the bilateral deal could move not just to Congress but also to
President Bush for needed presidential determinations. These determinations
were one-time requirements that did not need to be repeated in a new
administration. UPCOMING PRESIDENT-PRIME MINISTER MEETING
----------------------------------------- ¶9. (C) Ambassador Mulford moved to the topic of
the scheduled September 25 meeting between President Bush and Prime Minister
Singh in Washington .
He asked Ahluwalia what issues he thought the two leaders should discuss,
noting that the President was interested to know the latest on the government's
reform impulse that it indicated after winning the confidence vote in
Parliament in July. Ahluwalia started with a longer-term observation: that the
government's decision to part ways with the Left was decided on the issue of
the Indo-US civil nuclear deal, but that the parting of ways was done with the
sense of it being a longer, durable split. In the short-term, Ahluwalia
continued, there is still the question of whether any legislative reforms can
be done before elections. He thought the most that could be done would be to
introduce the insurance amendment legislation that raises the cap on foreign
direct investment (FDI) from 26% to 49% and to pass the pending banking
amendment act that removes the limit on voting rights of shareholders.
Ahluwalia opined that introducing the insurance legislation would be the
government's signal of its commitment to reform. He thought the banking
amendment should go through, but it mostly depends on whether the BJP signals
its support, because otherwise, the government is unlikely to be able to amass
enough of its new supporters to vote for the bill. ¶10. (C) The Deputy Chairman also pointed to
non-legislative reforms as being very possible. He suggested that Commerce
Minister Kamal Nath could do more on investment (Note: The Commerce Ministry
has the lead on the government's FDI policy that designates most FDI caps in
the country not controlled by existing legislation. End note.) Ahluwalia also
looked to the Banking Roadmap which is supposed to be revisited by the
government and the central bank, the RBI, in 2009. He thought a new roadmap
that opened India 's
banking sector to more foreign participation would not be issued until after
national elections next year. He noted that the currently scheduled
October-November parliamentary session was not very NEW DELHI 00002367 003 OF 005 long, and that
after that, there was not likely to be a substantive session until after
elections. He opined that since the deadline for a new Parliament to be in
session was May 2009, that elections would have to be held by March. However,
he noted, the election schedule would have to work around key school exams
during that part of the year. ¶11. (C) Returning to the scope of possible
reforms, Ahluwalia reiterated that the Finance Minister wants to get the
banking bill through and that on non-legislative side, improving the investment
environment through "debugging" the "creaking machinery" of
the bureaucracy would be an important reform. The Ambassador supported the
idea, noting that several American companies , most recently Oshkosh and Sikorsky, had been disqualified
from bids just shortly before the bids were to be opened, raising questions of
transparency. Ahluwalia admitted that he had not heard of these companies'
situation. Ambassador Mulford suggested the issue could be an agenda item for
the October 14 CEO Forum. Addressing the issue of questionable
disqualifications would help improve the business investment image of India .
Ahluwalia agreed, stressing that transparency was very important. However, he
countered, he has seen instances where foreign companies were properly disqualified
on a technicality that they knew of, yet failed to communicate circumstances
properly. Even so, the Ambassador said, it would be a good idea not to have
disqualifications occur just 1-2 days before the opening of bids. EDUCATION
FOCUS AT CEO FORUM ---------------------------- ¶12. (SBU) The Ambassador next suggested that
education collaboration might be a good agenda focus at the CEO Forum, to which
Ahluwalia agreed emphatically. Ambassador Mulford asked about the possibility
of commercial and military offsets being used for investments in India 's
education sector. Ahluwalia expressed the view that commercial offsets --
mostly generated from aviation purchases -- were a more likely source of
revenue for higher education investments, because the Ministry of Defense is
likely to use defense procurement offsets with its captive, protected state
interests. ¶13. (SBU) Ahluwalia indicated that the Indian
side is "keen" to step up its educational dialogue with the United States
and may wish to have it included in the joint statement between the President
and the Prime Minister at their meeting in late September. He went on to
suggest that, at the October 14 CEO Forum, the CEOs could "sanctify"
a plan to move forward on education collaboration. He explained that he has
been reaching out to Indian CEOs and to prominent Indians in the US , asking for
suggestions for cooperation between Indian and American universities. He was
trying to get the Secretary of Higher Education to the CEO Forum to help get
acceptance and commitment to moving forward on some kind of collaboration.
Under Indian law, Ahluwalia asserted, all kinds of foreign investment in
education was possible short of giving a foreign university degree. He wanted
to get the CEO Forum to "sanctify" support for enhanced cooperation
and to establish a formal framework. Ahluwalia also noted that, in addition to
support for the idea, he wanted the private sector to help pick up the costs of
exchanging students or faculty between Indian and American universities. ¶14. (SBU) The Ambassador asked for
clarification that newly established programs could be for-profit, but
Ahluwalia explained that for-profit universities are not currently allowed in India , based on
a Supreme Court decision. But, he observed, several states were taking the lead
in developing new education efforts, such as the Indian
School of Business in Hyderabad
or Haryana Chief Minister Hooda's plan to build an education city north of Delhi . India 's private
universities and schools get around the obligation to be nonprofit institutions
by establishing a trust or society that contained hidden fees or very
profitable hidden lease and other costs passed from the nonprofit educational
subsidiary to a holding company's real estate subsidiary. ¶15. (SBU) Ahluwalia explained that he had
proposed to Bill Harrison, former CEO of JP Morgan and lead US CEO of the CEO NEW
DELHI 00002367 004 OF 005 Forum, that a subgroup be created to identify areas
of educational collaboration. He had proposed that Infosys co-founder Nandan
Nilekani be the Indian side lead, and had asked Dan Price for suggestions on a
lead from the US
side. Ahluwalia claimed that some collaborations are already underway between
US universities and the Indian Institutes of Technology (IITs) and of
Management (IIMs), India 's
premier universities. In fact, Ahluwalia asserted, it would not be a problem
for US universities to identify an Indian university partner, where each side
would send students for a part of the home program to study in the partner
university and recognize the credits of each other towards the home degree. ¶16. (SBU) Embassy Public Affairs Counselor
Schwartz asked whether Ahluwalia had ideas for specific deliverables that could
be announced at the CEO Forum or proposed actions for the Education Working
Group. Ahluwalia opined that there might be a limited deliverable, such as
announcing that Nandan Nilekani and a US counterpart as co-chairs of a
group to provide a report to both governments after the Indian elections.
Schwartz asked whether a previously discussed idea, the creation of a junior
faculty development program, perhaps funded by commercial offsets, could be
kicked off at the CEO Forum working group meeting. Ahluwalia thought that was a
good idea, adding that there was no doubt that a report from the CEO Forum
working group to pinpoint the use of offsets would find a lot of takers and
proposed that the idea of offsets be cast as a note of suggestion, along with
other suggestions, for review by Nilekani's group. (Comment: Ahluwalia's suggestion
sidestepped Schwartz's proposal of obtaining GOI government approval for the
use of offsets by simply incorporating it as an area of study for the newly
formed group. End comment.) ¶17. (SBU) Schwartz suggested that another
deliverable might be the establishment of a US
- India Higher Education Council, which ECA Assistant Secretary Goli Ameri had
agreed to fund during her recent trip to India . The Council would be housed
for simplicity at the Fulbright Commission which has a bilateral Board of
Directors and serve as a regular consultative body for educators, along with
their supporters in government and industry. Ahluwalia thought that made "a
lot of sense," and suggested that in advance of the CEO Forum meeting, it
would be good to discuss the idea with MEA Joint Secretary Gaitri Kumar and CII
leader Tarun Das. DE-CONSTRUCTING DOHA
-------------------- ¶18. (C) Ambassador Mulford lastly noted to
Ahluwalia that President Bush might wish to discuss with Prime Minister Singh
the recent failed mini-Ministerial in Geneva
on the Doha Round. Mulford asked Ahluwalia if he thought it worth raising, to
which Ahluwalia replied that anything that the President felt should be raised
would be fine and in fact the two had often exchanged views on Doha before. Further,
Ahluwulia felt that if the US
judged there was the possibility of movement, then a discussion at the Bush-Singh
level would be especially useful. Ahluwalia noted that he had not yet received
a full briefing from the Indian delegation, but that Joint Secretary Gopal
Krisha was scheduled to come over during the week to discuss with him. However,
Ahluwalia said that he had heard from the US National Security Council's Dan
Price on the August meeting. Ahluwalia understood that the breaking point had
been over the special safeguard mechanism (SSM). The Indian view, Ahluwalia
believed, was that the 40% increase in imports as the threshold trigger for
raising tariff rates was too high. As an economist, Ahluwalia opined, he didn't
understand why the percentage of imports had been used. More relevant, he
asserted, was the size of imports to the economy. The larger the importance of
imports to the economy, the more important a small increase in imports was. ¶19. (C) Ahluwalia further offered that his
limited understanding from the Indian side was that U.S. Trade Representative
(USTR) Susan Schwab had hardened the US position on SSM and would not
consider a compromise proposal that would have phased in an increase in the
import increase trigger. The Ambassador quickly countered that the US perceived
that India had hardened its stance on SSM after Commerce Minister Nath had
returned to Geneva from the July NEW DELHI 00002367 005 OF 005 21 Confidence
Vote in the Indian Parliament, and that the change was unexpected. Ahluwalia replied
indirectly, noting that India 's
view of the SSM was that since the main proposal for the Doha
bound rates was so similar to the rates from the Uruguay Round that the SSM
only applied to Uruguay
products with no margins. The key question was what should be the trigger for
raising tariffs under the SSM? Economic Counselor Davison explained that SSM
was very important to US agricultural interests. Many of them felt that without
the SSM, the US
concessions on agriculture were too much. They felt the overall package would
not have resulted in increased and predictable access to Indian markets. ¶20. (C) As the meeting drew to a close,
Ahluwalia reiterated that he agreed with the Ambassador that the President and
Prime Minister should discuss Doha
at their meeting. Ahluwalia thought there was maybe a communication issue that
could be addressed. The Indian government, he assured the Ambassador, was not
taking the view that there was nothing there at Doha
for India .
If there are small points where re-thinking and clarification could be made,
and USTR Schwab and Minister Nath were to meet again before the President-PM
meeting, then it would be useful to know what the US needs are. If it is just this
"SSM thing" of choosing between either no SSM until 40% or creating a
lower, graduating trigger, Ahluwalia concluded, then it did not seem to be a
major difference. MULFORD MULFORD
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