891.2546/6–754: Telegram
The Ambassador in India (Allen) to the Department of State
1784. For Gerard Smith. Gonsalves of Bhatnagar’s office has sent Embassy for its advance information copy of note which covering letter states is being sent Embassy by MEA (Embassy telegram 1780 June 6). Substantive part of MEA note as follows:
The Ministry of External Affairs has the honor to inform the Embassy of the United States that the Government of India confirms the memorandum of commitment with the following modifications:
- 1.
- The Government of India accepts the proposal of the United States Government to substitute the phrase “at $2.20 per pound delivered at dock New York” for “$2.20 per pound c.i.f. New York” in the third sentence of paragraph 5 of the memorandum.
- 2.
- As the agreement mentioned in the memorandum will be entered into by the GOI, the words “the Government of India” will replace the words “the Atomic Energy Commission” wherever they occur in clauses 2 to 6 of the memorandum and other consequential modifications will be made.
- 3.
- The consequential agreements shall contain a (“and” shall be used for “and” respectively) “force majeure” clause.
- 4.
- The following minor changes may be made in clause 4 of the
memorandum:
- (a)
- The words “make delivery of” may be replaced by the word “produce” in line 8.
- (b)
- The words “and the United States will purchase” may be added after the words “United States” in line 11.
- (c)
- The words “is required” may be replaced by the words “is the steady commitment” in line 14.
- (d)
- The word “commitments” in line 15 may be omitted.
The Government of India propose, if the Government of the United States agree, to add the following sentence at the end of clause 4:
“And except for such additional quantities not exceeding in the aggregate 100 tons which the Government of India may sell under arrangement to the governments of the countries referred to in clause 3.”
If this amendment is accepted, then the phrase “through no fault of its own” in clause 6 must be deleted.
Subject to the above mentioned changes and observations, the memorandum of commitment under reference is hereby confirmed as accepted by the Government of India. If acceptable to the Embassy, the Ministry proposes that the present note and the Embassy’s reply [Page 1759] constitute a mutually agreed amendment to the memorandum of commitment of April 10, 1954.
Regarding the phrase GOI wishes add at end of clause 4, covering letter of Gonsalves states:
“You will also note that a sentence has been added at the end of clause 4, of which Dr. Bhabha considers to be in keeping with the spirit of the agreement as envisaged by both parties. The memorandum is intended to provide for the purchase to and by the United States on all surplus thorium nitrate produced in India beyond the amounts required for commercial use in the countries mentioned in the memorandum up to the total amount therein mentioned. The purpose of the added sentence is to provide for the sale of a part of the surplus, not exceeding in the aggregate 100 tons, by the GOI to the (governments) of the countries mentioned in the memorandum. Such sales, if it takes place, will be undertaken with due safeguards. Since the intention of the United States was to absorb all the surplus, it will, if this contingency materializes, have to absorb less in the period up to the 30 September 1955, the total amount of 230 tons to the United States being made up by sales in the following period. Consequently, the phrase “through no fault of its own” in clause 6 has been omitted.”
As reported in Embtel 1780, Bhabha stated GOI would not insist on this addition to clause 4 if US has serious objection. He would be happier if no complete rejection and would be content as reported to have government-to-government exports in question limited to UK, France, Italy, Norway, Sweden and Denmark. If US cannot accept either proposal, please send Embassy plausible reason therefor.