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

272. Letter From the Deputy Secretary of Defense (Douglas) to the Under Secretary of State (Dillon)¹

Washington, December 19, 1960.

Dear Douglas: As I indicated in my letter of December 3, 1960 to Livie Merchant,² the Department of Defense believes it both desirable and feasible to assist the Government of India to meet its requirements for helicopters. We are accordingly prepared to absorb through MAP the costs involved in providing approximately eight helicopters to India on terms which will compare favorably with the Soviet offer to furnish their MI–4 helicopter.

The total cost of eight helicopters of a type likely to suit Indian requirements including spare parts for one year, ground support equipment, transportation to India and training support is estimated to be approximately $3.35 million. We feel that under the circumstances the cost to India should be about $1.6 million or $200,000 per helicopter. In order to arrange the sale of these helicopters under an appropriate agreement, a Presidential Determination under Section 451 of the Mutual Security Act of 1954, as amended, in the amount of $3.35 million would be required to authorize this assistance. Further I believe that the Government of India should be offered a ten year credit, repayable in rupees, to finance the purchase.

If you concur in the foregoing, a message should be dispatched to Ambassador Bunker instructing him to determine if the Government of India is interested in obtaining eight U.S. helicopters suitable to its needs in its Northern Border Development Program and authorizing him, if the Government of India is interested, to offer eight helicopters with one year’s spare parts and ground support equipment, delivered in India, and necessary training support at a unit cost of $200,000 to be financed on a ten year credit basis repayable in rupees.

If the Government of India responds affirmatively to the proposal outlined above, the Department of State would then have to obtain the required Presidential Determination, and we would then proceed to conclude the contract with the Indians.

Would you please let me know as soon as possible your reaction to the foregoing.³

Sincerely,

Jim Douglas

1. Source: Department of State, Central Files, 791.5622/12–1960. Secret.
2. In this letter, James Douglas stated that he agreed with the Joint Chiefs of Staff on the subject of India’s possible procurement of Soviet aircraft, and transmitted the views of the Joint Chiefs on the subject (see JCSM–509–60, supra). “I find that the Department of Defense can,” he wrote, “out of Air Force procurement, meet India’s urgent need for high-performance helicopters, and I urge, therefore, that immediate attention be given to the problem of financing their early delivery.” (Washington National Records Center, OASD/ISA Records, Country Files, India)
3. The Department of State did not respond to this letter until March 23, 1961, when the new Under Secretary of State, Chester Bowles, sent a letter to Deputy Secretary of Defense Roswell L. Gilpatric in which he explained that the Department of State believed it would be appropriate, in the absence of any demonstrable urgency to provide helicopters to India, to defer action until the broader problems of military aid had been reviewed. A copy of Bowies’ letter was attached to the source text.