411.919/9–2653: Telegram
The Ambassador in India (Allen) to the Department of State
554. Re Deptel 332 of September 23. Pillai asked me to call today for further discussion on Battle Act. He said he had found it necessary to have further talks with Indian officials before taking matter to Prime Minister again and had found situation was even more difficult than he had thought. He said GOI had no export controls over some commodities included under category 1B and that such controls as existed were obviously inadequate since some shipments of mica, scrap iron etc. were being made.
In view of existing situation, he said it would be dishonest for GOI to state that it had no present intention of permitting shipments any category 1B items, although actual amount of trade was small. He thought 1A items presented no difficulty, since no shipments were being made or contemplated. As regards our request for prior notification of any change in situation, Pillai did not believe Prime Minister Nehru could agree to this. Pillai pointed out, however, that we could ask him or other GOI officials at any time and as frequently as we wished about the matter and they would answer us readily and frankly.
Pillai emphasized that thorium nitrate case had served to ventilate subject of Battle Act thoroughly among senior GOI officials and consequently had brought Battle Act provisions prominently to the attention of all GOI officials concerned. He hoped very much we could let matter rest with that at least for few months. He urged that we not press GOI too strongly on this issue in order not to weaken his hand and hands of other GOI officials genuinely working for a solution of this matter.
Comment: It seems clear that no general declaration or commitment can be obtained from GOI at present time covering categories A and B of Battle Act. Pillai is correct in stating that no commodities under mandatory list A are being shipped and exports of list B items are not significant. If our purchase of thorium nitrate is consummated we need have no concern about category A items. I believe Pillai is genuinely doing his best to find a mutually acceptable solution.
I hope finding can be made now that thorium nitrate shipment in question was not “knowingly permitted,” and that we can get this case off the books. It is well understood that any further shipments of category A items would result in termination of aid. Any cases which may arise under list B would be handled on ad hoc basis.
I should add that some sentiment is arising in GOI that acceptance of American aid creates more difficulties than it solves and that GOI [Page 1724] would be well advised to declare unilaterally that it does not desire our further assistance. This point of view may find some expression during forthcoming Colombo Plan Conference.