891.03/5–2551: Telegram
The Chargé in India (Steere) to the Secretary of State
priority
3362. ReDeptel 1971, May 22 and Embtel 3345, May 24.
1. PriMin informed me today fol 75 min conference that India needed US econ aid, that he was most anxious to have it and that he wld be willing accept such aid on existing ECA terms and conditions as summarized in Deptel 1971, May 22. We went over these terms point by point and I explained them as best I cld on basis experience and info available here. Nehru raised objection to no single point although he made slightly wry face on Point 7 (full publicity).
2. PriMin was interested in special ECA mission re activities personnel, etc. I assured him staff wld consist primarily of technicians and experts whose major functions cld be consultation, observation [Page 2165] and review execution of assistance. He wondered whether any experts wld be expected supervise or take charge industrial plants which might result from aid program and seemed relieved when answer was in negative. I gave him list showing number offices presently assigned ECA missions in SEA and smaller and medium missions Western Europe explaining that countries which had reed large volume aid such as UK, France, Greece etc. naturally had larger staff. His concluding remark was that he assumed there might be minor irritations in relations with such staffs but nothing that little patience and good will cld not iron out. Calibre and understanding of chief of missions wld be most important.
3. Main preoccupation PriMin was that Ind acceptance of US aid within framework of SOA or wider econ aid program wld not be taken to imply, either by US Govt or by Ind people, that he and GOI had thereby committed themselves directly or indirectly to some modification of domestic and fon policies which govt has heretofore pursued, and wld now be identified more closely with fon policies of US. This was important to India which desired maintain its complete independence in that respect. He very much hoped that India and US wld develop closer and friendlier relations but if any change in Ind policies shld develop it shld come about thru evolution in views of Ind people.
4. I replied that Amer Govt as I thought he was aware had repeatedly indicated that econ aid was not being accorded foreign countries with any idea exerting pressure upon these countries to change their policies internal or fon. We naturally hoped such aid wld lead to improved econ conditions in recipient countries and to better US relations with those countries and that these better relations wld in course time lead to closer identity of views and policies. Nehru accepted remarks as in line his own views.
5. He then inquired as to whether aid promised to any country might be withdrawn in event that country shld adopt or pursued domestic or fon policies which US Govt did not like. I gave my opinion that aid wld not be withdrawn in such a case unless govt of recipient country shld adopt or pursue policies diametrically in conflict with bilateral agreement. It was of course possible that a recipient country’s fon policies might incur Congressional displeasure with result that no further appropriation might be voted. Nehru replied that that was obviously entirely prerogative of Cong and recipient country cld have no valid objection.
6. Nehru also inquired as to whether ECA mission, as hypothetical case, might object to Ind execution from own or non-US resources of industrial project which wld not be approved for financing from ECA funds. Nehru seemed entirely satisfied by my reply to effect that such problems wld normally be ironed out by consultation but that [Page 2166] in last analysis ECA cld hardly object to GOI execution such project unless it wld conflict with other agreed projects.
7. Relation of SOA program to Colombo plan1 was raised by PriMin. I replied that close coordination was contemplated re any projects developed under Colombo plan although identical countries were not involved.
8. PriMin was in friendly and talkative mood and I left after detailed discussion (including other matters) with definite impression that he was prepared have GOI cooperate actively in proposed econ aid program.
- The Colombo Plan, a report published on November 28, 1950, by the British Commonwealth Consultative Committee on South and Southeast Asia calling for the economic development of the area.↩