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06NEWDELHI657 2006-01-30 13:01 2011-03-15 00:12 CONFIDENTIAL Embassy New Delhi

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¶1. (C) Summary: The UPA's January 28 cabinet shuffle signifies a determination
A B C D F G H I to ensure that US/India relations continue to move ahead rapidly, and strengthens
J K L M N O P Q the cadre of modernizing reformers at the top of the GOI. Removing contentious
R S T U V W Y Z and outspoken Iran pipeline advocate Mani Shankar Aiyar from the Petroleum
portfolio, the UPA replaced him with the pro-US Murli Deora, who was one of
several figures inducted with long-standing ties to the Indo/US Parliamentary
Browse by tag Forum (IUPF) and the Embassy. The UPA also inducted a large number of serving
A B C D E F G H MPs, including seven from the IUPF who have publicly associated themselves with
our strategic partnership. To ensure that there are no foreign policy ripples
I J K L M N O P before the President's visit, PM Singh retained the critical MEA portfolio and is
Q R S T U V W X likely to hold on to it until after the next session of Parliament concludes and
Y Z Congress has weathered crucial Assembly elections in Kerala and West Bengal in
May. Viewing the shuffle as a shift towards the US, the left has become more
Browse by classification alienated from Congress and more determined to obstruct UPA economic
liberalization and foreign policy initiatives, all but ensuring political
CONFIDENTIAL fireworks in the months ahead. The net effect of the reshuffle, however, is a
Cabinet that is likely to be excellent for US goals in India (and Iran). End
CONFIDENTIAL//NOFORN Summary.
SECRET
SECRET//NOFORN ¶2. (U) After our analytical paragraphs, this cable includes a full Cabinet list
UNCLASSIFIED plus bios of new entrants. See paras number 17 and 18.
UNCLASSIFIED//FOR An Eventful Weekend
OFFICIAL USE ONLY -------------------

Community resources ¶3. (U) Prime Minister Manmohan Singh announced a major cabinet shuffle and
President Kalam swore in the new members on January 29. Eighteen new
Follow us on Twitter personalities were inducted, including 10 Ministers, one Minister of State with
Independent Charge, and 11 new Ministers of State. All the new faces were from
Check our Reddit Congress, including three senior Congress leaders from Maharashtra - Sushil Kumar
Twitter this Shinde (Power), AR Antulay (Minority Affairs) and Murli Deora (Petroleum).
Digg this page Although PM Singh retained the Foreign Affairs portfolio, he announced that he
Contact us on IRC would try to shuffle the Cabinet again after the Budget Session of Parliament
(the third week in May.) Most expect him to name a new Foreign Minister at that
courage is contagious time. The two top names making the rounds are Finance Minister P Chidambaram and
Rajya Sabha MP and former Maharaja of Kashmir Karan Singh. Longtime Embassy

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contact Anand Sharma was named Minister of State for Foreign Affairs. In the
most significant development, the GOI replaced Petroleum Minister Mani Shankar
Aiyar with Murli Deora (Aiyar was retained and was given Panchayati Raj, Youth
Affairs & Sports as a consolation prize.) The PM maintained on January 29 that
regional considerations took priority, as Congress wanted to provide
opportunities to deserving individuals from Maharashtra, Tamil Nadu and Andhra
Pradesh. He also noted

NEW DELHI 00000657 002.2 OF 009

that there was a need to ""accommodate MPs with a lot of talent.
The Aiyar Controversy
---------------------

¶4. (C) Our Foreign Ministry contacts welcomed Aiyar's departure, commenting
that his energy diplomacy had encroached on MEA turf too many times, leading to
MEA appeals to the Prime Minister's Office to intercede. Despite the PMO warning
to back off, Aiyar's Ministry of Petroleum and Natural Gas (MPNG) continued to
interfere with MEA attempts to craft policy, our contacts said, citing Pakistan,
China, Burma, Bangladesh, Iran and Sudan as areas of intergovernmental conflict.
Aiyar's unwillingness to step back reportedly led to the PM's decision to remove
him from this high-profile portfolio, and cements MEA's position as the lead
bureaucracy on strategic policy making.
¶5. (C) Aiyar's dismissal as Petroleum Minister will leave MEA officials
breathing easier, and put MEA back in charge of policy toward these energy
suppliers, including the ""problem children"" of Sudan, Burma and Iran. Unlike
Aiyar, who cultivated a reputation for anti-Americanism, Murli Deora has been
associated with the US/India relationship for years. Lacking Aiyar's ambitions
(or entrepreneurial zeal), he will be a more cautious Minister. Clearing these
lines of authority should make the PM's job of coordinating India's often-
conflicting interests in energy security, trade, investment, anti-terrorism and
stronger ties with the West a bit less muddled. His departure also weakens the
holdouts fighting a rear-guard action against stronger engagement with the US,
who would prefer that India hold true to its non-aligned traditions. Local
journalists speculate that Aiyar's parting shot was the leak on January 28 of the
USG demarche (ref A) protesting Indian investment in Syrian oil projects, spun by
opponents of US-India engagement as another attempt by the US to dictate policy
to India.

¶6. (C) Our contacts (protect) in the Government-owned Gas Authority of India
Ltd. (GAIL) confirmed that Aiyar had vexed the PMO and MEA by positioning the
MPNG to usurp the lead on India,s strategic posture for energy security issues,
inducting Additional Secretary Talmiz Ahmad, a senior career diplomat, to lead on
oil and gas diplomacy, and taking a pro-active stance on the proposed
Iran-Pakistan-India (IPI) natural gas pipeline (Reftels B and C). Before Aiyar,s
ouster, a Planning Commission energy expert (protect) told us that Aiyar,s
international forays in search of oil and gas equity had been taken as ""fishing
expeditions"" at Aiyar,s initiative, and that any significant deals would be
subject to Cabinet scrutiny before approval. The GAIL contact said the MPNG,s
civil bureaucracy had run a whispering campaign against Aiyar calling him
autocratic and disrespectful of IAS officers, including a public criticism of
MPNG Joint Secretary (for International Cooperation) Prabh Dass in front SIPDIS
of government-run entities.

¶7. (C) Aiyar's replacement as Petroleum Minister, Murli Deora, is a stalwart

supporter of stronger US-India ties, and one of the few high-profile Congress
leaders who embraces the PM's vision of the bilateral relationship. He is
currently the Chairman of the India-US Forum of Parliamentarians, a
NEW DELHI 00000657 003.2 OF 009
non-partisan, industry-sponsored counterpart to the US Congress's India Caucus
that advocates closer political and economic ties to the United States. Deora is
a Gandhi family loyalist and a wealthy Mumbai-based industrialist, and is
currently serving his fourth term as a member of the Lok Sabha. Deora's only
vulnerability, as a Mumbai politician, is his long-standing connection to the
Reliance industrial group, which includes significant energy equities.
¶8. (C) One analyst at Petrowatch, an industry publication in Mumbai, noted that
Aiyar,s dismissal removes a powerful supporter of the Iran Pipeline project and
speculated that it could signal a shift in the GOI's energy-related foreign
policy. Our GAIL contact said the private conglomerate Reliance probably lobbied
heavily for Deora, particularly in view of Aiyar,s clashes with Reliance during
the five year rule of the National Democratic Alliance. Deora said his priority
is to strengthen the chronically loss-making public sector oil firms and tackle
the fuel subsidy issue, drawing on his experience as chairman of the standing
committee on finance. While we expect Deora to more faithfully uphold the PM's
foreign policy vision, the MPNG Petroleum Ministry is likely to be less
pro-active and energetic in its drive to acquire foreign oil and gas assets than
it was under Aiyar's globe-trotting leadership. New Delhi energy analysts have
questioned the wisdom of removing Aiyar, predicting that his departure puts
several nascent energy partnerships and deals in doubt (including a
much-trumpeted pact to cooperate with China on energy purchasing signed during
Aiyar's January visit to Beijing). In the end, however, the high-profile deals
have all been of highly tentative nature, and Aiyar's self-promoting maverick
diplomacy was too much for PM Singh to accommodate.
The New Minister of Power
-------------------------
¶9. (C) The new Minister of Power, Sushil Kumar Shinde, a close political ally
of Sonia Gandhi, fills the ministerial slot vacated by the death last December of
Minister PM Sayeed, who was viewed more as a figurehead political appointee. The
power ministry is pivotal, in that the power sector must attract huge investment,
while being politically-sensitive to needed price increases; and rapid long-term
growth in power generation capacity and production is crucial to achieving the
GOI goal of sustained 8% annual GDP growth. The power sector,s reliance for

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growth on most forms of generation - nuclear, hydroelectric, coal-thermal,

gas-thermal, wind, and solar - underscores the political sensitivity of related
issues outside the Power Ministry's purview, such as seeking natural gas from
Iran or alternative foreign sources, civil nuclear energy cooperation with the
US, or social and environmental aspects of increasing coal production.
¶10. (C) The UPA Government appointed Shinde as Governor of Andhra Pradesh State
after he led the Congress party to victory in the 2004 State Assembly elections
in neighboring Maharashtra, where he had been elected Chief Minister in 2003.
Shinde was Sonia Gandhi's election campaign manager when she first contested for
the Amethi Parliamentary constituency in Lok Sabha. Shinde, age 65, was born
into a poor cobbler's family of the disadvantaged (scheduled) Dalit
NEW DELHI 00000657 004.2 OF 009

Caste in Solapur district. In 1971, he quit his job as a sub-inspector in the

state police intelligence wing to run for and win a seat in Maharashtra,s
legislative council. By 1981, he became Finance Minister in Maharashtra,s
Government, serving for nine years.

The New Minister of Coal and Mines

----------------------------------
¶11. (C) A vindicated Shibu Soren, was re-inducted into the Union Council of
Ministers as Minister of Coal. The thickly-bearded tribal leader had been forced
to resign in July 2005, both as Minister of Coal and as Chief Minister of
Jharkand State, after getting embroiled in a number of criminal cases, including
being arrested for inciting arson and violence during a deadly rally in 1975.
Earlier he was acquitted of accepting bribes to support the minority government
of the late Prime Minister Rao. Soren was elected to parliament in 1980 and to
the Bihar State Assembly in 1981. He founded in 1972 the Jharkhand Liberation
Front, which successfully achieved Statehood for the coal-rich tribal region of
Jharkhand. He has been President of the JLF since 1990.
¶12. (C) Coal now accounts for over 50% of India,s power generation and is
projected to remain at 52-55% for at least 20 years thereby requiring sustained
production growth to underpin rapid growth in India,s power sector, potentially
with close US. cooperation in clean coal technology. Greater exploitation of
India,s huge coal reserves faces issues of environmental protection and social
disruption in areas with coal seams below tribal areas.

And Good News on Kashmir

------------------------

¶13. (C) Another welcome addition to the cabinet is Kashmiri Congress Party
Rajya Sabha member Saifuddin Soz, a long-standing contact of the Embassy's
Political section. Soz, a Sonia Gandhi confidant, worked discreetly and
diligently behind-the-scenes to help launch the PM's dialogue with Kashmiri
separatists such as the Mirwaiz, Yasin Malik, and Sajjad Lone. For his loyal
service and his successes on Kashmir diplomacy, Sonia has elevated him to the
Cabinet. In doing so, she also ensured that a prominent and well-respected
Kashmiri Muslim would occupy the important Water Resources portfolio. Kashmir
has tremendous water resources, including massive untapped hydroelectric
potential. Given the on-going dispute between India and Pakistan over the
construction of the Baglihar dam on the Chenab river near Jammu, and Soz's new
job's supervision of the India-Pakistan Indus Waters Treaty, it is clear that Soz
will play a key role in Delhi's efforts in Kashmir and its dialogue with
Pakistan. Soz -- a professor -- is a moderate, earnest gentleman who has been a
good friend of the US. He could potentially be Chief Minister of Kashmir one day,
or rise even higher in the Cabinet, if he does a good job as minister.
Comment - A Boost to US Energy Interests
----------------------------------------
¶14. (C) Our initial assessment is that appointment of the

NEW DELHI 00000657 005.2 OF 009

three new energy ministers will boost USG interests by enhancing bilateral
cooperation under the US/India Energy Dialogue (Reftel F) prior to US. Department
of Energy Under Secretary David Garman,s visit to New Delhi (expected Feb SIPDIS
8-9). Aiyar,s dismissal, following on USG demarches against oil and gas
cooperation with Iran and Syria, will probably disrupt the recent momentum built
by Aiyar and MPNG Additional Secretary Talmiz Ahmad in favor of the
Iran-Pakistan-India natural gas pipeline, as well as cooperation with Syria, as
Deora conducts a thorough review of these transactions.
And a pro-US Shift
------------------
¶15. (C) The Cabinet shuffle contained lots of good news for the USG, confirming
the UPA government's determination to maintain rapid progress in the India/US
relationship. The demotion of Aiyar was the most significant indicator. The new
entrants with strong pro-US credentials include Saifuddin Soz, Anand Sharma,
Ashwani Kumar, Kapil Sibal and Aiyar's replacement Murli Deora. Seven of the new
faces are also members of the pro-American Indo/US Parliamentary Forum, while the
induction of so many entrants from the Rajya Sabha reflects the declining
importance of a mass political base. The timing of the shuffle and the PM's
retention of the MEA portfolio were dictated by the impending POTUS visit, and
reflects the PM's commitment to ensure that there is no foreign policy surprises
before the visit.
That Angers the Left
--------------------
¶16. (C) The undeniable pro-American tilt of the Cabinet shuffle has infuriated
the Left, which will view it as a throwing down of the gauntlet and an invitation
to open warfare. The editorial comment of the pro-Left ""Hindu"" was typical
""Mr. Aiyar paid with his job for...going against the Government's strategic

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pro-US policy and its increasing acceptance of unilateralism and unipolarity.""

Increasingly infuriated by what they view as Congress subservience to the US, the
Left is likely to become even more uncooperative in the aftermath of this move.
Congress hoped to pacify the Left by bringing in Jairam Ramesh, who has been
close to the Communists while in the National Advisory Council and Vayalar Ravi
(Overseas India Affairs), who has been a consistent critic of the UPA's economic
liberalization and pro-US tilt. These moves are unlikely to mend the growing rift
between the Left and Congress, however, making increased confrontation more
likely.
The New Cabinet
---------------
¶17. (U) After the Cabinet shuffle the current shape of the Cabinet is as
follows:
Cabinet Ministers
Manmohan Singh--Prime Minister, External Affairs Pranab Mukherjee--Defense Arjun
Singh--Human Resource Development Sharad Pawar--Agriculture, Food & Civil
Supplies
NEW DELHI 00000657 006.2 OF 009
Lalu Prasad Yadav--Railways Shivraj Patil--Home P Chidambaram--Finance Kamal
Nath--Commerce & Industry Ram Vilas Paswan--Chemicals & Fertilizers, Steel Jaipal
Reddy--Urban Development PR Dasmunshi--Information & Broadcasting, Parliamentary
Affairs Mahavir Prasad--Small Scale, Agro & Rural Industries PR Kyndiah--Tribal
Affairs, Development of North East TR Baalu-- Shipping, Road Transport &
Highways Shankarsinh Vaghela--Textiles HR Bharadwaj--Law & Justice Sushil Kumar
Shinde--Power Mani Shankar Aiyer--Panchayati Raj, Youth Affairs & Sports Sis Ram
Ola--Mines Meira Kumar--Social Justice & Empowerment K Chandra Shekar Rao--Labor
& Employment A Raja--Environment & Forests Dayanidhi Maran--Information
Technology & Communications Anbumani Ramdoss--Health & Family Welfare Shibu
Soren--Coal (new) AR Antulay--Minority Affairs (new) Vyalar Ravi--Overseas Indian
Affairs (new) Murli Deora--Petroleum (new)-IUPF member Ambika Soni--Tourism &
Culture (new) Saifuddin Soz--Water Resources (new) Santosh Mohan Dev--Heavy
Industries & Public Enterprises (new) Prem Chanda Gupta--Company Affairs (new)
Kapil Sibal--Science & Technology (new) Ministers of State with Independent
Charge
Oscar Fernandes--No Portfolio allotted yet (new) GK Vasan-- Statistics &
Program Implementation (new) Renuka Choudhury--Women & Child Development
(previously Tourism & Culture) Subodh Kant Sahai--Food Processing Vilas
Muttemwar--Non-conventional Energy Sources Kumari Selja--Urban Employment &
Poverty Alleviation Praful Patel--Civil Aviation Minister of State
E Ahamed-- External Affairs Suresh Pachauri--Personnel, Parliamentary Affairs BK
Handique--Chemicals & Fertilizers (previously defense) Mrs. P Lakshmi--Health &
Family Welfare D Narayan Rao--Coal & Mines Shaqeel Ahmed--Information Technology
& Communications Rao Inderjit Singh--Defense (previously MEA) Narainbhai Rathwa--
Railways KH Muniyappa--Road Transport & Highways MV Rajashekharan--Planning
Kantilal Bhuria--Agriculture, Food and Civil Supplies Manik Rao Gavit--Home
Affairs Sri Prakash Jaiswal--Home Affairs Prithviraj Chavan--Prime Ministers
Office Taslimuddin--Agriculture, Food and Civil Supplies Mrs. Suryakanta
Patil--Rural Development, Parliamentary Affairs
NEW DELHI 00000657 007.2 OF 009
A Narendra--Rural Development Mohammed Ali Ashraf Fatimi--Human Resources
Development R Velu--Railways SS Palanimanickam--Finance S Regupathy--Home Affairs
K Venkatapathy--Law & Justice Ms. S Jagadeesan--Social Justice & Empowerment EVKS
Elangovan--Commerce & Industry Mrs. Kanti Singh--Heavy Industry Namo Narayan
Meena--Environment & Forests Akhilesh Prasad Singh--Agriculture, Food & Civil
Supplies Pawan Kumar Bansal--Finance (new) T Subbirami Reddy--No portfolio
allotted yet (new)- IUPF member Anand Sharma--External Affairs (new)- IUPF member
Ajay Maken--Urban Development (new) - IUPF member Pallam Raju--Defense (new) -
IUPF member CS Sahu--Labor (new) Akhilesh Das--Steel (new) Jairam Ramesh--No
portfolio allotted yet (new) Ashwani Kumar--Industry (new) - IUPF member Ms. D
Purandareswari--Human Resources Development (new) - IUPF member Dinsha Patel--No
portfolio allotted yet (new)
Bios of New Entrants
--------------------
¶18. (C)(All Bios):
Sushil Kumar Shinde - Minister for Power - A long time Congress party activist
and Gandhi family loyalist, Shinde was the Governor of Andhra Pradesh until he
took this position. Prior to that, he was Chief Minister of Maharashtra. He has
held many positions in the Congress party including General Secretary and
Congress Working Committee Member. He is a dalit and his inclusion in the
cabinet is seen as an attempt to reach out to the community.
Shibu Soren - Minister for Coal - Leader of the regional party Jharkhand Mukti
Morcha (JMM), Soren is considered to be the father of the JMM movement that
ultimately led to the creation of Jharkhand state. He was a minister earlier in
the cabinet, quit after he was charged with arson and rioting for acts he
committed during the hey days of the JMM movement in the 1980s. The charges have
since been quashed and so Soren comes back into the cabinet.
AR Antulay - Minister for Minority Affairs - Another Gandhi family loyalist,
Antulay is from Maharashtra and has been Chief Minister of the state. He was
infamous in the early 1980s for floating fictitious trusts and amassing money in
the name of Indira Gandhi that led to the fall of his government in Maharashtra.
Antulay has been in the political wilderness since then, but as a Muslim was
rehabilitated as a concession to the Muslim community.
Vyalar Ravi - Minister for Overseas Indian Affairs - Another old time party
loyalist, Ravi is the first UPA Minister from Kerala, and his induction was a
concession to that state, where the Congress government faces the voters this
year. Ravi also comes from a backward caste.
NEW DELHI 00000657 008.2 OF 009

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Murli Deora - Minister for Power - Long considered as a key fund raiser for
Congress, Deora has been a parliamentarian for many years, as well as President
of the Mumbai District Congress Committee. He is well-known as a friend to the
business community and pro-US. His son, Milind, is also a member of the Lok
Sabha.
Ambika Soni - Minister for Tourism & Culture - Having cut her political teeth
under the tutelage of Sanjay Gandhi, Soni is a long term Gandhi family loyalist.
Since Sonia Gandhi's entry into active politics, Soni has been one of her close
confidants and supporters and was for many years the Secretary in charge of the
Congress President,s office.
SIPDIS Always quick to defend the party and Sonia on any issue, Soni,s induction
into the cabinet is seen as a reward for her loyalty.
Saifuddin Soz - Minister for Water Resources - A veteran parliamentarian from the
Kashmir valley, Soz was environment minister in the Gujral government and his was
the crucial vote that brought down the Vajpayee government in March 1998. Soz
was expelled from the National Congress for defying the party whip and voting
against the BJP-led government. Soz,s induction into the cabinet is a reward for
his hard work to promote the ongoing dialogue between the government and the
Kashmir separatist groups and allows Congress to claim credit for appointing a
Muslim and Kashmiri to the Cabinet.
GK Vasan - Minister of State for Statistics and Program Implementation - Son of
the veteran Congress leader GK Moopanar, Vasan is from Tamil Nadu and is the
President of the state's Congress party. His induction is a concession to Tamil
Nadu, where Congress hopes to benefit in elections later this year.
Pawan Kumar Bansal - Minister of State for Finance - A Congress MP from
Chandigarh, Bansal is a long time party loyalist. He recently became the subject
of controversy after providing MP development funds to the Chandigarh Golf Club
in return for a privileged membership.
T Subbirami Reddy - No Portfolio - Another major fund raiser for the Congress
party, Reddy is an industrialist and film producer. Known as the best
party-giver in town, Reddy has been in Parliament since 1989. He is from Andhra
Pradesh.
Anand Sharma - External Affairs - A Congress spokesman, Sharma is a former
President of the Youth Congress and a well-known Gandhi family loyalist. He is
very friendly to the US, where one of his two sons receives treatment for
autism. Sharma is a Rajya Sabha MP from Himachal Pradesh.
Ajay Maken - Urban Development - One of the younger MPs in the Lok Sabha, Maken
is serving his first term. He was widely praised for his performance as Minister
for Power and Transport in the Delhi government and Speaker of the Delhi
Assembly. A tough task master, he is credited with initiating power reforms in
Delhi.
M Pallam Raju - Defense - Educated at Temple University, Philadelphia, Raju is a
Lok Sabha Member from Andhra Pradesh. A member of the house from 1989-91 and an
engineer by profession, Raju worked in the US and Norway before coming
NEW DELHI 00000657 009.2 OF 009

back to India and joining politics.

CS Sahu - Labor - A first time member of the Lok Sabha, Sahu has been in Congress
politics for a long time, serving as Mayor of Behrampur, Orissa. A lackluster
politician, his induction into the council is mainly to give representation to
Orissa.
Akhilesh Das - Steel - A member of the Rajya Sabha since 1996, Das is the
publisher of a leading Hindi daily ""Jansatta, "" and was Mayor of Lucknow. Das
has a Ph.D. in Management Studies from Agra University.
Jairam Ramesh - No portfolio - Along with Manmohan Singh, considered one of the
leading members of the Congress Economics brain trust, Ramesh is a Rajya Sabha
member. Close to Sonia Gandhi, he is one of her key advisors on economic issues.
Ashwani Kumar - Industry - A long standing Rajya Sabha member, Kumar is another
Gandhi family loyalist. He is a very successful Supreme Court lawyer and strong
proponent of closer US/India ties.
D Purandareswari - Human Resources Development - A Daughter of former Andhra
Pradesh Chief Minister NT Rama Rao, Purandareswari is serving her first term in
the Lok Sabha. She has been brought into the Cabinet as a reward for her strong
performance in the house.
Dinsha Patel - No portfolio - A member of the Lok Sabha from Gujarat since 1996,
Patel is a veteran Congressman. He was a member of the state assembly from 1975
to 1996. He has been brought in to give representation to the powerful Patel
community of Gujarat.
¶19. (U) Visit New Delhi's Classified Website: (http://www.state.sgov.gov
/p/sa/newdelhi/)
MULFORD

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