711.452/2–2745
The Secretary in Charge at New Delhi (Merrell) to the Secretary of State
[Received March 6.]
Sir: I have the honor to refer to the penultimate paragraph of the Department’s airgram A–313, December 19, 1944, 2:15 p.m.,51 stating [Page 271] that the Department would be prepared to resume discussions leading to the negotiation of a treaty of commerce and navigation between India and the United States (suspended on December 15, 1942)52 and requesting the Mission’s comments on the general contents, acceptability and timing of such a treaty.
It will be recalled that on December 30, 1942, the Supply Member of the Government of India, Sir Ramaswami Mudaliar, then in Washington, assured officials of the Department that the Government of India had in no way lost its desire for a treaty, but that the status of the Government of India undoubtedly would undergo a change after the war, and that instruments negotiated now might need to be done again later. The future framework of the Government of India is no clearer now than it was in December 1942. If this reason for postponing negotiations was valid at that time, it is still valid.
On February 21, 1945, the officer of the Mission in charge of economic affairs53 accompanied Mr. Beecroft, the Special Representative of the Foreign Economic Administration in New Delhi, in calling on Mr. Ram Chandra, Chief Controller of Imports and Acting Secretary of Commerce Department of the Government of India. The object of the visit was to permit Mr. Beecroft to obtain the latest views of the Government of India on economic relations between the United States and India before he returns to the United States for consultation early in March. The Mission’s economic officer took the opportunity to sound out Mr. Ram Chandra regarding the possibility of resuming negotiations leading to a treaty of commerce and navigation. The latter made it clear that the Government of India at present has not reached any definite views on this subject. He suggested the possibility that when the Secretary of the Commerce Department, Mr. N. R. Pillai, returns to India early in March from his protracted visits to the United Kingdom and the United States, the Government of India might possibly consider the question of India’s commercial relations with foreign countries after the war. Mr. Ram Chandra stressed the point that such a decision was only a possibility, and he had no way of knowing whether the question would even come up for serious discussion. The Mission will seek an opportunity to learn the views of the Secretary of the Commerce Department, Mr. N. R. Pillai, when the latter returns to India.
It has been learned from officials of the Federation of Indian Chambers of Commerce and Industry that a resolution will be introduced at the annual meeting of the Federation, which will convene in New Delhi on March 3, 1945, calling for the resumption of negotiations of a commercial treaty between India and the United States. The principal interest of the members of the Federation, it is believed, [Page 272] is in alleviating the position of Indian business men by a treaty which would make applicable to them the provisions of Section 3(6) of the Immigration Act of 1924.54 Indian interests, it appears would view with unconcern the provisions of paragraph 3 of article XVI of the draft treaty55 providing most favored nation treatment and including the United Kingdom and Northern Ireland among the third countries. When it comes to national treatment with respect to navigation, contained in articles II and [to?] VI of the draft, it is anticipated that there would be opposition since Indian shipping interests are bitter over the equal opportunity accorded the British in this field. Similarly national treatment with respect to the exploration for and exploitation of a specified list of mineral resources probably would encounter great opposition in view of the current belligerently nationalistic mood of many Indians. Finally any national treatment with respect to industrial property, covered by Article IX of the draft treaty, would be opposed. In a conversation with Sir Ardeshir Dalai56 on February 24, 1945, Dr. Charles F. Remer57 of the Department and Mr. Mills of the Mission were told baldly that India intended to see that foreign interests did not in the future acquire majority ownership or control of any of India’s industries, and it was implied that India would be able to get along without foreign capital if the latter was unwilling to come to India on a minority basis.
With both Indian business interests and the Indian elements in the Government in such a hyper-nationalistic frame of mind, it is doubtful whether the United States would be able at this time to negotiate with India a treaty of commerce and navigation which would give the United States any of the advantages it might look for in such a treaty. On the contrary recent announcements of officials in Britain do not indicate that the United Kingdom Government is in any mood to scrap the Ottawa Agreements58 now. In this connection a Reuter despatch from London, dated February 23, 1945, reports that the British position at the Commonwealth Relations Conference now in session is that there might be some room for an “improved Ottawa Pact” in the form of a relaxation of inter-Commonwealth trade barriers which, it is assumed, would not apply to non-Empire countries such as the United States.
Respectfully yours,
- Not printed.↩
- See bracketed note, Foreign Relations, 1941, vol. iii, p. 201.↩
- Sheldon T. Mills, Secretary at New Delhi.↩
- Approved May 26, 1924; 43 Stat. 153.↩
- For text, see Foreign Relations, 1939, vol. ii, p. 354.↩
- Member of the Executive Council of the Governor-General for Planning and Development.↩
- Adviser on Far Eastern investment and finance, Division of Financial and Monetary Affairs.↩
- Agreements and announcements made at the Imperial Economic Conference, Ottawa, August 20, 1932, British and Foreign State Papers, vol. 135, p. 161.↩