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

242. Telegram From the Department of State to the Embassy in India¹

Washington, October 19, 1959—10:05 p.m.

1412. Embtel 395.² During visit US, Finance Minister Desai saw and spoke to numerous private persons and government officials. Among latter were Secretaries Commerce, Treasury, Agriculture as well as Directors DLF and EXIM Bank. In Department Desai called on Secretary, Under Secretary, and Assistant Secretary Jones.³

Among subjects covered in various conversations were following:

1) Third Five Year Plan which Desai said must emphasize industrialization in order to reach self-sustaining point. It, therefore, must be considerably larger than Second Plan and will require more foreign exchange. Desai indicated no decision reached as to period Plan would cover, as end Second Plan coincided with general election campaign. Government would find it necessary impose new tax measures before these elections scheduled for January and February 1962.

2) Economic Assistance. Desai hoped DLF would continue increase in resources and importance. Secretary agreed but remarked on difficulty experienced by Executive this year in obtaining even reduced DLF appropriations. He noted, however, increasing number of international agencies in aid field, citing Inter-American Development Fund and proposed IDA. Western European countries, he added, should now be in position contribute their share of development capital.

3) Investment guaranty program which Desai desired extend to cover expropriation.

4) PL 480. Desai reiterated GOI’s opinion 400,000 ton usual marketing requirement for wheat in new PL 480 program too high.

5) Indus Waters settlement. Desai said chances of settlement good.

6) Stockpiling. Desai asked Secretary Commerce reconsider stockpile objectives to permit continuation previous level purchases mica and manganese. Also mentioned high price US machinery in comparison world market.

Itinerary included visit with farm family, Omaha, and tour Grand Canyon both of which, according accompanying Indian Embassy officer, were of interest to Finance Minister.

Herter

1. Source: Department of State, Central Files, 033.9111/8–559. Confidential. Drafted by Anthony Cuomo and J. Wesley Adams of SOA and approved by Adams.
2. In telegram 395, August 5, marked “For Ambassador Bunker,” Brown reported that during a conversation that day, Finance Minister Desai informed him that he expected to be in Washington, September 28–October 4, and in New York, October 5–7, after which he would embark on a brief tour of the country. (Ibid., 033.9111/8–559)
3. Desai met with Secretary Herter and Under Secretary Dillon on September 29. Memoranda of those conversations, drafted by Bartlett, are ibid., 700.5–MSP/9–2959, 891.00–Five Year/9–2959, and 790.5–MSP/9–2959, respectively. A memorandum of Desai’s conversation with Dillon regarding the Indus Waters dispute, also on September 29, is printed as Document 82. Briefing material for the Desai visit is in Department of State, Central File 033.9111.