09ASTANA281, KAZAKHSTAN SECURES LUCRATIVE DEALS WITH INDIA, BUT

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Reference ID Created Released Classification Origin
09ASTANA281 2009-02-17 10:37 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO4169
RR RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR
DE RUEHTA #0281/01 0481037
ZNY CCCCC ZZH
R 171037Z FEB 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 4642
INFO RUCNCIS/CIS COLLECTIVE 1209
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0592
RUEHLM/AMEMBASSY COLOMBO 0040
RUEHKA/AMEMBASSY DHAKA 0048
RUEHIL/AMEMBASSY ISLAMABAD 2148
RUEHBUL/AMEMBASSY KABUL 0432
RUEHKT/AMEMBASSY KATHMANDU 0005
RUEHNE/AMEMBASSY NEW DELHI 0530
RUEHKO/AMEMBASSY TOKYO 1298
RHMFISS/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC
RHEHNSC/NSC WASHDC 0771
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEKJCS/SECDEF WASHDC 0687

C O N F I D E N T I A L SECTION 01 OF 02 ASTANA 000281 
 
SIPDIS 
 
STATE FOR SCA/CEN 
 
E.O. 12958: DECL: 02/17/2019 
TAGS: PGOV PREL ECON EINV EPET ETRD MARR IN KZ
SUBJECT: KAZAKHSTAN SECURES LUCRATIVE DEALS WITH INDIA, BUT 
OBSTACLES TO "STRATEGIC PARTNERSHIP" REMAIN 
 
REF: ASTANA 00200 
 
Classified By: AMBASSADOR RICHARD E. HOAGLAND, 1.4(B/D) 
 
1.  (C) SUMMARY:  President Nursultan Nazarbayev's January 
23-26 trip to New Delhi as the guest of honor at India's 2009 
National Day celebration underscored the close political 
relations between Kazakhstan and India which have existed 
since Kazakhstan's independence.  However, despite 
professions of interest from both sides in strengthening 
economic ties, India and Kazakhstan are not yet key trading 
partners, in part because of geographical barriers.  An 
Indian Embassy official in Astana also cautioned against 
overly high expectations from the uranium and oil deals 
signed in New Delhi.  India's Defense Attache reported 
difficulties in developing Kazakhstan-India mil-mil ties. 
END SUMMARY. 
 
INDIA SEEKS MORE TRADE, AS WELL AS EXCHANGES AND VISITS 
 
2.  (SBU) In several meetings with PolOff from October 2008 
to January 2009, Indian Embassy Second Secretary D.C. 
Manjunath said that his Mission's three priority goals were 
to increase Kazakhstan-India trade, promote people-to-people 
exchanges, and encourage more frequent meetings between 
senior officials.  Manjunath noted that Kazakhstan's main 
exports to India are mineral products and raw materials, 
while India's main exports to Kazakhstan include tea, 
pharmaceuticals, chemicals, plastics and machinery.  He said 
the Indian Tea Agency and India's pharmaceutical industry 
expect their exports to Kazakhstan to increase, in part due 
to lack of alternative suppliers.  Overall Kazakhstan-India 
bilateral trade turnover grew significantly in 2008, reaching 
$367 million, in comparison to $195 million in 2007. 
However, to put this figure into context, $367 million 
represented just 0.3 percent of Kazakhstan's total trade 
turnover for the year.  Manjunath explained to PolOff that 
the biggest barrier to bilateral trade is the lack of a 
viable land-transit route, resulting in very high costs for 
goods transport. 
 
CAUTIOUS ASSESSMENT OF ENERGY DEALS 
 
3.  (SBU) Manjunath offered a more cautious assessment of the 
oil and uranium agreements signed during the Nazarbayev visit 
than the Kazakhstani press reports.  He explained that the 
Memorandum of Understanding and Cooperation signed by 
Kazatomprom (KAP) and the Nuclear Power Corporation of India 
Limited (NPCIL) was only "a company to company agreement," 
not a comprehensive 123 agreement such as India has with 
France, Russia and the United States.  While Kazakhstan is 
looking for technology transfers, Manjunath told PolOff that 
"frankly speaking," India's primary interests are procuring a 
long-term contract for uranium supplies and conducting joint 
mining activities (see ref A).  According to Manjunath, as 
soon as the U.S. government signed the U.S.-India Civilian 
Nuclear Agreement, India began negotiating to buy uranium 
products from Kazakhstan and Canada.  Manjunath told PolOff 
the amounts of uranium India agreed to purchase from 
Kazakhstan that were discussed in the press after 
Nazarbayev's visit were only "floating figures," with the 
actual amounts to depend on price and demand. 
 
4.  (SBU) Although Manjunath said the deal on the Satpayev 
oil field was the crowning achievement of Nazarbayev's visit 
to India, he cautioned that whether it was to be exploratory 
only or would also encompass production remained to be 
finalized.  Manjunath told PolOff that even if India's Oil 
and Natural Gas Corporation produces oil from Satpayev, the 
output would not likely be delivered to India, given the lack 
 
ASTANA 00000281  002 OF 002 
 
 
of a viable transport option.  He noted that despite the fact 
that a significant number of Indians are working for oil 
service and engineering companies in Kazakhstan, Indian oil 
companies are not running any major operations in Kazakhstan. 
 
KAZATOMPROM OPTIMISTIC ABOUT DEALING WITH INDIA 
 
5.  (SBU) Although Manjunath highlighted the differences in 
Kazakhstani and Indian interests in the uranium sector, 
Ministry of Energy and Mineral Resources (MEMR) and 
Kazatomprom officials told PolOff they were optimistic about 
business with India.  Yevgeniy Ryaskov, Acting Director of 
MEMR's Departme
nt of Nuclear Energy, told PolOff that, "India 
had approached Kazakhstan about selling India uranium long 
before the NSG granted India a waiver, therefore Kazakhstan 
refused.  Now that the NSG had agreed, Kazakhstan is 
definitely interested."  Sergey Poltoratskiy, Kazatomprom's 
Director of the Corporate Management Department, and Alexandr 
Trigubov, Director of Production, told PolOff that 
Kazatomprom sees major growth opportunities in supplying 
nuclear fuel pellets to markets where nuclear power plants 
are being built, expanded, or planned, including India, 
China, Vietnam, Indonesia, and Europe. 
 
MUTUAL INTEREST IN HIGH TECHNOLOGY 
 
6.  (SBU) On January 10, Kazakhstan's Vice Minister of 
Industry and Trade (and chief negotiator for WTO accession), 
Zhanar Aitzhanova, told the press that Kazakhstan is 
interested in cooperating with India in such commercial 
spheres as textiles, high-technology, and financial services. 
 Manjunath told PolOff he also considers technology-related 
fields, particularly pharmaceuticals, metallurgy, and 
production of light machinery, as promising areas for 
cooperation.  Manjunath admitted, however, that Indian 
businesses are not very well organized in Kazakhstan, and 
have no organization that mirrors the American Chamber of 
Commerce, which hinders close cooperation. 
 
MILITARY COOPERATION LIMITED 
 
7.  (C) The Indian Embassy's Defense Attache, Colonel Raja 
N.S. Subramani, reported to us difficulties in developing 
mil-mil relations between Kazakhstan and India.  India is 
very interested in enhancing cooperation with its mountain 
regiment, but has been unable to secure interest from the 
Kazakhstani side.  The British Defense Attache in Astana, Lt. 
Col. Simon Fitzgibbon, reported that the British Embassy 
strongly supported an Indian offer to provide military 
training to Kazakhstani forces through a regional training 
center, and felt the Indian forces had valuable expertise to 
offer, but Kazakhstani military officials expressed low 
opinions of Indian capabilities. 
HOAGLAND

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