Foreign Relations of the United States, 1955–1957, South Asia, Volume VIII

155. Instruction From the Department of State to the Diplomatic and Consular Offices in India ¹

CA–5444

Washington , January 20, 1956.

SUBJECT

• Semi-Annual Review of United States–Indian Relations, May 15–November 15, 1955

This report is intended to identify recent trends in United States-Indian relations and to judge their significance in the light of our objectives with regard to India. The Department would welcome any comments designed to correct or improve the analysis and evaluation. Any comments should be airmailed as soon as possible, marked “For Distribution in the Department Only”.

Summary:

The atmosphere of U.S.-Indian relations improved during the period under review. Nehru’s criticisms of U.S. collective security policies were less emotional than in other recent periods, and the Indian press moderated itself accordingly. Main reasons for this trend were probably the easing of cold war tensions and a wider recognition within India of President Eisenhower’s earnest desire for world peace. On the whole, purely bilateral U.S.-Indian relations also improved during the period, owing to efforts on both sides to emphasize the common ground in our objectives. These trends did not however indicate any marked rapprochement on the major points at issue—international Communism and colonialism—and were accompanied by trends towards closer relations between India and the Soviet Union in many fields. Whether United States objectives with respect to India moved any closer to being fulfilled remained an open, but perhaps more realistic, question.

Within India, the States Reorganization Commission report was an important development. The Congress Party apparently strengthened itself, particularly in relation to the non-Communist left. The Communist party may also have gained, on the whole, from the Soviet Union’s expressions of admiration for the Government of India. The Indian economy continued to expand steadily and Indian officials weighed ambitious new targets for India’s future economic progress. These developments did not radically alter the context of United States objectives with regard to India, but they did underline the strength and appeal of the Nehru government and our continued need to support it as the only strong, stable and responsible government in sight in India today.

International Relations:

A more favorable Indian attitude towards the United States was evidenced, during the half year under review, by the absence of any outburst of criticism of American foreign policy by Nehru comparable to his caustic attacks of last March 31 or of September 30 previously. A similar change in Krishna Menon’s behavior was notable, though attributable in part to ulterior motives. Indian press and public opinion seemed to register a similar shift, to a position of less distrust of American policy, and sometimes open praise.

It appeared possible that these changes in the Indian attitude were the results of a deliberate decision on Nehru’s part. He may have wished to counterbalance some of the several top-level exchanges of visits and joint declarations with Communist countries over the last year. However, the basic reasons for the change probably were the thawing of the cold war and a greater appreciation of United States efforts for world peace.

The general easing of cold war tensions, which began near the close of the last period under review, culminated in the Geneva “Summit Meeting” in July. Nehru, and the Indian press and public generally, gave the major credit to President Eisenhower for the “success” of the conference and the emerging “spirit of Geneva”. This was a notable shift of Indian attitude toward United States policy in the cold war, but it remained to a large extent an accolade to the President personally. Subsequently, when the President suffered his heart attack,² the spontaneous and apparently genuine concern expressed by Indians of all levels, from Nehru on down through the editors of “Blitz”, was also a tribute to American leadership in easing international tensions. The unfruitfulness of the second Geneva meeting, between the Big Four Foreign Ministers, did not greatly alter the Indian estimate of the cold war situation. By and large the Indian press found it not as difficult to approach objectivity in discussing European as distinct from Asian security problems, and the “Times of India” was outstanding in this department.

. . . . . . .

Bilateral political developments in U.S.-Indian relations were predominantly favorable during the period. Nehru invited the President to visit India, and though the President indicated he probably could not accept he asked Nehru to visit the United States next May or June. (Nehru has not yet formally replied.) In each instance the tone of the correspondence was most cordial. Ambassador Cooper established himself in the confidence and respect of Nehru and the Indian press, and toured through each of the major regions of India giving talks which were well received and very widely publicized. General Maxwell Taylor was courteously greeted in New Delhi; General Shrinagesh,³ Chief of the Army Staff, paid a successful visit to the United States; and the Indian Army asked to send two officers to the U.S. for staff training. The United States pavilion at the Delhi Industries Fair was highly impressive and attractive, and an American trade promotion team met with great interest throughout India. Our regular information and exchange of persons programs continued to operate with success, and with assurance of a number of new personnel positions for cultural and exhibits work. The PL 48 (Wheat Loan) program settled into established channels of activity; by and large it has come to supplement Indian resources in the field of higher education, and so receives relatively little publicity on its American financing.

The primary adverse factor in bilateral U.S.-Indian political relations was the outstanding request of the Government of India for the closing of our USIS outposts. Though the request was repeated again during the period, the fact that it was not pressed raised some hope that it would eventually be dropped.⁴ Other adverse factors were the decision of the GOI to refuse requests from Embassy New Delhi to lease a teletype circuit to Karachi and from the New York Times to publish a special edition in India; the incident at the Houston airport when Ambassador Mehta was apparently subjected to racial discrimination;⁵ and probably the MRA tour, with subsidized U.S. Air Force transportation, showing the play entitled “The Vanishing Island”.

Prospective U.S.-Indian economic ties showed some tendency to weaken during the period under review. The Administration requested $19.5 million for technical assistance to India, Congress appropriated $15 million and that total was cut by Executive action to $10 million (a one-third decrease from last year’s total). The Administration requested $70 million for developmental aid to India, the House cut it to $60 million, the Senate to $50 million and the Executive Branch tentatively to $40 million (well below the level of aid for fiscal years 1954 and 1955). These reductions were not criticized by the GOI but undoubtedly caused disappointment, particularly because of India’s accelerating development program and the widened gap envisioned in India’s Second Five Year Plan. Moreover, the Budget Bureau took the tentative position that it was the intent of Congress to substitute PL 480 (agricultural surplus) assistance for regular development aid during FY 1956. This action suggested the possibility that India might receive no development assistance from the United States this fiscal year at all. It was certain that the GOI itself could hardly acknowledge a PL 480 arrangement as an adequate substitute for developmental aid, and would consider the elimination of regular developmental aid as a major reversal of United States attitude towards India.

Ironically, while these developments tended to cast doubt upon the future of our established economic aid programs, there were many indications of greater Indian acceptance of the value of economic cooperation with the United States. High Indian officials expressed more than usual appreciation of American economic aid (notably at the Colombo Plan Council meeting at Singapore), took the initiative in securing the cooperation of Colombo Plan countries for the U.S. Fund for Asian Economic Development, asked for a large number of additional American technicians to work in India, and suggested joint U.S.-Indian economic assistance to Nepal to minimize Communist China’s potential economic and political influence in that country. Other favorable developments were Tata’s increasingly favorable attitude toward U.S. equipment for its steel-mill expansion plan; the arrival of two top American economists to work with the Planning Commission on the Second Five Year Plan; a U.S.-Indian accord on a special flood relief grant from the U.S. of 20,000 tons of food grains; the conclusion of a satisfactory arrangement for the export of rhesus monkeys to the U.S.; progress towards the conclusion of an investment guarantee agreement and of a thorium nitrate sales contract; and earnest negotiations looking to a new civil air agreement.⁶ On the other hand conditions for American private investment in India did not improve during the period. The Indian Companies Law imposed new restrictions on the operations of foreign private capital in India, and the GOI arbitrarily ordered a price reduction on rubber tires, largely produced by American subsidiaries in India. Moreover there continued to be slow-downs by dock workers at Bombay and Calcutta, Indian labor unions instituted a boycott of ships touching at Goa, and the GOI challenged the action of an American-owned oil company incorporated in India in refusing to bunker a ship bound for Communist China.

The appreciable improvement in the climate of U.S.-Indian relations over the past half year was equalled if not surpassed by developing closer relations between India and the Soviet Union and its satellites. Nehru received a uniquely warm reception in Moscow and signed a joint communiqué with Bulganin calling for strengthened relations between their two countries in the economic and cultural fields as well as in scientific and technical research. Arrangements for the Indo-Soviet steel mill project proceeded apace and Soviet assistance was also proffered in the fields of atomic energy, non-ferrous metals industries, coal mining and oil exploration. Some similar offers were reportedly forthcoming from Czechoslovakia, Rumania, Poland and East Germany. In addition, India and the U.S.S.R. agreed to a civil airline connection at Prague, and reportedly negotiated for a more direct through route via Tashkent. These moves were in harmony with the Indian concept of “peaceful coexistence” and cooperation, but of course did not portend a departure from the GOI’s basic cold war policy of non-alignment, or its domestic policy of anti-Communism. Perhaps to emphasize this, Nehru stated publicly on the eve of his departure for Moscow: “The functioning of the Cominform⁷ is an interference in other countries affairs and is not compatible with the policy of non-interference” (one of the Five Principles of Peaceful Coexistence).⁸ It was also significant that many Indian newspapers expressed disappointment that Nehru’s trip had not resulted in a disbandment of the Comin-form by the Soviets, that a number of recent Indian visitors reported unfavorable impressions of the Soviet Union, and that Nehru himself was relatively uncommunicative about his tour on his return to India.

. . . . . . .

Feeling in India on the Goa question rose to a new high following the August 15 satyagraha marches which raised the total of Indian “martyrs” to 18. Riots and demonstrations occurred in all of the major cities in India. Nehru however refused to sanction GOI or Congress support for further mass action and on September 6 declared that both individual and mass satyagrahas were “undesirable”. Subsequently the Government of Bombay by and large prevented Indian satyagrahas from crossing the border. In the first official U.S. statement on the Goa dispute, the Secretary on August 2 expressed the hope that both sides would avoid violence. The statement was so couched as to be relatively well received in India and somewhat disappointing to the Portuguese, at whose suggestion it had been made.⁹

Dulles

1. Source: Department of State, Central Files, 611.91/1–2056. Secret. Extracts. Sent to Bombay, Calcutta, Madras, and New Delhi; repeated to Colombo, Dacca, Karachi, and Lahore. The sections not printed concern India’s relations with nations other than the United States and the Soviet Union, India’s interest in U.S. relationships with other Asian countries, and a discussion of domestic developments.
2. September 23, 1955.
3. Satyavant Mallannah Shrinagesh.
4. Cooper met with Nehru on December 30, 1955, when the latter gave the impression he intended to close USIS subposts. He maintained it was Indian policy to limit foreign information centers to Embassy and Consulate cities. Until the matter was finally settled, he requested that the subposts function only as libraries. (Telegram 1417 from New Delhi, January 10, 1956; Department of State, Central Files, 611.91/1–1056)
5. Documentation on this subject is ibid., 601.9111.
6. The United States and India signed an air transport agreement on February 3, 1955. For text, see TIAS 3504; 7 UST 275.
7. The Cominform or Communist Information Bureau existed between September 1947 and April 1956 and involved the Soviet Union, its satellites, and the Communist Parties of Italy and France. It functioned as a kind of coordinating agency for international Communism.
8. The other four principles, which China and India propounded on April 29, 1954, were as follows: “Mutual respect for each other’s territorial integrity and sovereignty; Mutual non-aggression; Equality and mutual benefit; and Peaceful Co-existence.” The Panch Shila was incorporated in the preamble to an agreement on Tibet. See Foreign Policy of India: Texts of Documents 1947–64 (New Delhi, Lok Sabha Secretariat, 1966), p. 199.
9. For text, see Department of State Bulletin, August 15, 1955, p. 263.