Foreign Relations of the United States, 1958–1960, South and Southeast Asia, Volume XV

234. Memorandum of a Conversation, Department of State, Washington, June 17, 1959¹

Washington, June 17, 1959

SUBJECT

• Atomic Power Plant for India

PARTICIPANTS

• Ambassador Ellsworth Bunker, American Embassy, New Delhi
• Mr. John Floberg, Atomic Energy Commissioner, AEC
• Mr. Algie Wells, Director, Division of International Activities, AEC
• Mr. John Hall, Assistant General Manager for International Activities, AEC
• Mr. Philip Farley, Special Assistant to the Secretary of State for Disarmament and Atomic Energy
• Mr. Robert Schaetzel, S/AE
• Mr. Chadwick Johnson, S/AE
• Mr. Anthony Cuomo, SOA

Mr. Hall opened the discussion about the atomic power plant for India by saying he had talked to Dr. Bhabha in Vienna. The latter was not clear as to the details of this project. Mr. Hall said, however, that in Dr. Bhabha’s views concerning a one million kilowatt program he was considering a series of points, i.e. (1) that we were more advanced than the Soviet Union, (2) that enriched uranium is an improvement over natural uranium, (3) that it would be a good thing to have a joint program with the United States but that aid would be necessary. Dr. Bhabha had told Mr. Hall he wanted a long-term loan and that he was not interested in a Euratom type program. Mr. Hall said Dr. Bhabha will be in the United States in October which indicated there was no urgency with regard to this program. Mr. Hall commented Dr. Bhabha had so indicated by saying he would talk about it at that time. Ambassador Bunker remarked that Dr. Bhabha was probably waiting for firmer thinking on the Third Five Year Plan. The Ambassador added that Dr. Bhabha probably has a commitment from Prime Minister Nehru for some development of atomic power projects but not to the extent of a million kilowatt program; there was a great deal of competition for India’s limited resources. Mr. Hall said he did not gain the impression from Dr. Bhabha that he was speaking for the Government of India.

Mr. Floberg remarked that apparently Dr. Bhabha was speaking of a power program for which he needed technical help. Dr. Bhabha wants a nuclear kilowatt producer, he said, and perhaps the best way to begin a 1 million kilowatt power project is to start with a 30,000 kilowatt project. A smaller one he added might be even less economical than a big one but might be a preferable beginning. Ambassador Bunker said that because of the long distances involved in bringing coal to where it was needed in India atomic power might be more economical than in other parts of the world. The Ambassador was asked about oil in this connection and replied that India only had modest amounts. He was then asked about the priority of this type of project and replied that while it would not be the highest it would certainly be among the highest, and had very important psychological and political aspects.

To the extent other people would be involved, Mr. Schaetzel asked, what genuine support would the Government of India give this type of project. The Ambassador replied that if it did not have the full support of the Government of India it would not go ahead. He gave as an example the Bengal Reclamation Project which had not gone through because the Minister interested in it had failed to clear it with the Planning Commission. At this point Mr. Schaetzel concluded that the proposal would, therefore, not be put forward until after the Planning Commission had cleared it. Ambassador Bunker, however, said that we should continue to talk to Dr. Bhabha before such a clearance in order to be prepared to move quickly should a favorable decision be reached. The Ambassador pointed out that we are facing a massive Soviet economic offensive and that one of the advantages the Soviet Union has over us is that it can make up its mind quickly. We should, therefore, continue exploratory talks, the Ambassador said, in an effort to offset this disadvantage. The Ambassador was then asked when might firm decisions be reached on the Five Year Plan, and replied that the magnitude and type of plan would be formulated probably by the end of this year.

Mr. Floberg remarked that Mr. Hall got the impression Dr. Bhabha was not familiar with a deferred payment plan. He said that we had India in mind when this plan was formulated. Under the Euratom program, he explained, fuel was being supplied but no payments were required for ten years. Japan, he said, stimulated this feature of this deferred payment plan. In other words there was no down payment for the fuel and no payments for many years. Ambassador Bunker said he thought this was an attractive feature.

Mr. Schaetzel then asked the Ambassador’s opinion regarding the priority of this type project in relation to other demands on resources from our point of view. At this point Ambassador Bunker discussed impact projects. We were too late, he commented, to come into the Second Five Year Plan with this type of aid. The Soviets, he said, went in early with impact projects and went into the public sector. He was asked if Soviet aid was in the form of grants to which he replied they were not. They are loans at 2½%. The Ambassador then remarked that the Indians [less than 1 line of source text not declassified] are extremely sensitive. Because of the prestige involved, in addition to practical reasons, atomic energy means much to them and if we could be identified with them in this field there would be much to gain. The Ambassador concluded by saying there were many other important projects but that this should be high up on the list.

Mr. Schaetzel recalled that when Bulganin visited India an offer was made with regard to atomic energy.² He asked if there had been any follow-up on that score. The Ambassador replied that as far as he knew there had been none and believed the Indians did not wish to follow up. They would prefer to work with us, he added.

The question then arose as to how to proceed and the Ambassador asked if it would not be preferable for him to tell Dr. Bhabha to continue his talks here in the United States since those in New Delhi were uneducated on this highly technical subject. The talks would continue here in the United States in October, it was generally agreed, but Mr. Schaetzel suggested that since Mr. Terry Sanders³ was now in Washington he could also be “educated” for anything that might have to be done in New Delhi. The Ambassador agreed and Mr. Floberg added that the AEC would in addition try to come up with specific suggestions for the field.

1. Source: Department of State, Central Files, 89.1901/6–1759. Confidential. Drafted by Cuomo on June 29.
2. Soviet Premier Nikolai Bulganin visited India in November 1955, accompanied by Nikita Khrushchev, First Secretary of the Soviet Communist Party.
3. Terry B. Sanders, Jr., Counselor for Economic Affairs at the Embassy in New Delhi.