891.03/4–1851
Memorandum of Conversation, by Mr. J. Robert Fluker of the Office of South Asian Affairs1
Subject: Food Grains for India
| Participants: | Madame V. L. Pandit, Indian Ambassador |
| Mr. B. K. Nehru, Financial Counselor, Embassy of India | |
| S—Mr. Pawley2 | |
| NEA—Mr. McGhee | |
| SOA—Mr. Mathews | |
| SOA—Mr. Fluker |
At her request, the Ambassador met with Mr. McGhee to present her Government’s reaction to points made by Mr. McGhee on April 14 in his discussion with the Ambassador on certain of her Government’s objections to provisions in the House bill and the proposed agreement relating to food aid for India. The Ambassador read her Government’s cable of instructions which referred to Mr. McGhee’s and the Ambassador’s previous comments, and set forth the Government of India’s reconsideration of its stand in the light of those comments and its [Page 2148] decision not to press at this late date for revision of the language in question. The cable stated further that:
- 1.
- While the detailed language of the law might not be read widely abroad, the people of India would peruse with care the language underlying United States assistance and might misconstrue the intent of that assistance. In order that the bill’s reference to United States food aid in furtherance of United States foreign policy should not be construed in India as an attempt to influence India’s foreign and domestic policy, the intent of this reference should be clarified in the agreement or, at a time deemed appropriate, in an exchange of notes or in a public statement.
- 2.
- It did not appear necessary for the language of the agreement to go beyond that of the legislation in order to conform with the pattern of previous bilateral agreements. The proposed agreement, therefore, need not specify observation of distribution of all grains when the bill provides for observation of distribution of the grain supplied by United States aid.
- 3.
- A separate mission in India to carry out United States participation in the program would result in unfavorable public opinion in India. A group connected with the United States Embassy in New Delhi might serve the same function.
- 4.
- The Government of India realized that the provisions of the bill and the agreement relating to administration of the expenditure of counterpart funds, applied only to the counterpart generated by United States aid and did not extend to supervision of India’s total development plans. The counterpart derived from United States aid should be used in consultation with the United States representatives, but projects upon which it would be expended would be decided by the Government of India.
Mr. McGhee remarked that he was pleased to have the Government of India’s views on these matters.
Mr. McGhee said that the language of the agreement need not go beyond the provisions of the legislation. He observed that certain provisions in the bill could be clarified in the agreement which could also indicate that, while consistent with United States foreign policy, United States assistance did not constitute an attempt to dictate India’s foreign and domestic policy. Mr. McGhee added that the Senate bill did not specifically relate United States foreign policy to cessation of food assistance.
With reference to United States observance of distribution in India, Mr. McGhee said that he agreed with Mr. Nehru who had pointed out previously, on April 14, that grain supplied through United States aid could not be distinguished from other grain flowing in the ration system. Observation, therefore, could not be limited to United States aid grain. Mr. Nehru concurred.
Mr. McGhee said that a United States mission in India would be necessary so that a report might be made to the people and the Congress [Page 2149] of the United States; under the present proposal, a report would be required for Congressional action on the last half of the program. Mr. McGhee stated that the United States group in India must be an Economic Cooperation Administration mission because the ECA would administer the program in the United States and was organized to implement economic aid programs abroad. He observed that the ECA mission would be attached to our Embassy and, in that respect, could be considered a part of our staff in New Delhi. As for the United States voice in the use of counterpart funds, Mr. McGhee commented that the development plans involving the expenditure of these funds would be advanced by the Government of India; the United States representatives would, of course, have the right to point out the inadvisability of any particular expenditure, whereupon the Government of India could advance another project. Mr. Nehru observed that while the United States mission would be concerned only with counterpart derived from United States aid, the mission must have a good knowledge of India’s total development plans in order to operate effectively.
Mr. Pawley emphasized the need for a clear understanding of the provisions which must be contained in the legislation and the agreement. He stated that the mission in India would be an ECA mission and would be under the direction of our Ambassador in New Delhi. That mission, he said, would represent the United States in approving or disapproving plans suggested by the Government of India for the use of counterpart generated by the proposed United States aid. He added that the matter of strategic minerals was becoming of increasing importance in the eyes of the Congress and that the legislation might well contain language relating to the use of counterpart funds for the development of strategic minerals; this development would stimulate the Indian economy and supply materials needed for the United States stockpile. Mr. Pawley said that this type of development would be in the mutual interests of India and the United States. Mr. Pawley noted that the Department might be able to make some suggestions on the language to be used in the Senate bill. Mr. Nehru said that there was no question as to the intent of the United States Government but in the light of the Indian people’s sensitivity in their newfound independence, the wording of the legislation and the agreement connected with the proposed food aid program was most important.
Mr. McGhee said that he was well aware of the sensitivity of public opinion in India but that the Government of India must recognize the difficulties facing the United States Government in proposing food aid for India. He commented that the legislation was drafted by Congress and that the Department would certainly suggest language [Page 2150] which would take cognizance of the situation in India. On the other hand, Mr. McGhee remarked, the saleability of the proposal in the United States is also a consideration. In the case of the agreement, Mr. McGhee said that the Department would certainly choose the most appropriate language consistent with the wording and intent of the law.