Foreign Relations of the United States, 1964–1968, Volume XXV, South Asia

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

Washington, February 21, 1964, 6:52 p.m.

1690. New Delhi’s 2221 to Department.² We are now in position to make exploratory approaches to GOI looking toward possible five-year MAP program for India. We have transmitted separately text of President’s decision on military assistance for India and Pakistan as well as text Secretary’s memorandum to President of Jan. 16.³ You will understand requirement to observe most carefully caveats on NSAM. These documents, plus General Taylor’s report⁴ and Secretary’s memorandum to President of Dec. 11,⁵ which you already have, provide framework for your approach.

While package has changed during its consideration here, which will complicate your task of negotiating it in Delhi, our willingness in principle to go forward on a long-term MAP program marks a major step forward, significance of which should not be lost on Indians. Moreover, it represents potential program of considerable magnitude. Your extensive talks with Indian leaders have laid excellent groundwork for gaining Indian acceptance concepts upon which our proposals based. As indicated below we are adding one and possibly two elements which may make Indians more receptive to your approach: our willingness to place all aid on grant basis and possibly some dollar military sales on favorable terms under an export promotion program.

It seems to us General Taylor’s approach provides us with best point of departure from which to follow-up, and get Indians make policy decisions which we consider sound as part their own plan. Thus, rather than seeking understandings from Indians re force levels, diversion of foreign exchange, etc., we would look to them to prepare their own austere plan which would satisfactorily deal with these factors.

In this approach to GOI you should take following line:

1. Since ChiCom invasion in fall of 1962 USG has been fully cognizant of India’s determination build its defenses against continuing ChiCom threat and its need for external assistance. To this end we first extended emergency Nassau aid. We are now following this up with roughly similar amounts of assistance for FY ’64. It has now become more evident that India will require assistance over an additional period of years. Our assistance has been based upon our careful examination of the threat to Indian security, India’s military requirements to defend itself over the long-term against this threat, Indian absorptive capacity and availability of US resources. Our latest studies of this question have included extensive consultation in New Delhi and Washington and have encompassed a review of the over-all situation at highest levels of USG.

2. However, central to India’s own defense planning is need for inter-ministerial decisions by which Indian Government establishes sensible long-term military program, and achieves balanced relationship between this and its economic programs. General Taylor made this point clear in December, and we have been waiting for further word as to firming up of Indian plans.

3. To move this process forward, US now ready to discuss possible five-year military assistance program to India provided GOI works out austere minimum five-year plan for defense against Chinese Communist threat, taking into account needs of its military services. For purposes of preparing their plan GOI should assume minimum levels of assistance which it considers it requires and can obtain from foreign sources.

It must be made clear that US assistance will, of course, be subject to availability of funds. No irrevocable commitments can be undertaken because Congressional appropriations will rule. Moreover, we want to make clear that actual level of our aid must depend on continued joint understanding as to purposes for which provided and effective utilization.

4. We realize planning of kind outlined above is time-consuming process. Consequently, if necessary, we are prepared to continue our military assistance during FY ’65 at approximately current levels (FYI. As you know FY ’64 program level is $50 million. End FYI.) until detailed Indian plan can be worked out.

5. A satisfactory Indian military plan should cover following factors:

(A) Allocation of Scarce Resources Between Development and Defense. We are confident that Indians are aware of need to avoid stripping their economic development program to pay for a military build-up. In countering ChiCom threat, continued economic growth is at least as important over long run as military strength. A satisfactory plan would hold to minimum diversion of resources, particularly foreign exchange, from economic development. We feel this point especially keenly because US is largest provider of scarce foreign exchange to Indian 5-Year Plans. US does not want both to provide MAP to meet what we regard as legitimate Indian needs and simultaneously to see additional hard currency which we provide for quite another purpose, diverted from it.

(B) Allocation of Resources Among Indian Military Services. Just as any Indian defense plan would reflect decision on allocation of resources between defense and economic development, it would also set priorities among competing needs of Indian military services. It follows, therefore, that we would look to GOI to make initial decision on priorities for use of US assistance as between ground and air defenses, to meet ChiCom threat.

Should Indians inquire concerning our reaction if they include high performance aircraft from Free World sources in their plan, you should reply it up to them to establish relative priorities and individual items will be considered in our review of the overall plan. FYI. We see these coming later rather than sooner in plan for reasons of pricing, availability, Indian capacity to absorb, and, of course, reaction in Pakistan. End FYI. We obviously see number of MIGs and SAMs which Indians acquire from Soviets as affecting extent to which it necessary for US to fill Indian needs.

(C) Force Levels. Satisfactory Indian plan would include time phased levels of force goals which were realistic in terms of limited resources available to India for defense purposes.

(D) Soviet Military Assistance. Any Indian defense plan will, of course, take into account military assistance from all sources. In deciding on extent to which we can support such plan US will naturally be interested in extent and types of Soviet assistance GOI contemplates. We are aware that India has already made certain military purchase arrangements with Soviet Union. We recognize that Indians will be accepting some Soviet aid. We do, however, proceed from assumption that West is clearly more reliable source of support to India against ChiComs. Our specific judgment on significance of Soviet military assistance would be determined by number of factors including following: quantities and types of Soviet aid accepted, effect on security US equipment, compatibility of differing types equipment, extent to which Soviet assistance requires introduction Soviet technicians, impact of Soviet aid, degree of Indian dependence on Soviets, and U.S. Congressional attitudes. (See Deptels 1281 December 23, 1963⁶ and 96 July 10, 1963.⁷)

6. In sum, we presume among other elements Indians would wish include following in their five-year plan:

a. Their estimate of threat, to include most probable scale of Chinese Communist attack, if any.

b. Statement of Indian resources available during period for military purposes, expressed in terms of internal expenditures and foreign exchange outlays.

c. Assumption for planning purposes of minimum foreign assistance required and obtainable from all countries.

d. Decision on force levels supportable by application of foregoing resources.

e. Assessment of impact of this military program on economic development (including an assessment of total external assistance required to support this plan together with economic development plans).

f. Decisions on defense production.

7. GOI will understand that US has been assisting India within context of broad agreement on certain aspects of foreign policy. Our assistance is provided to strengthen India against possibility of renewed Chinese Communist aggression. This assistance has greatly complicated our relations with Pakistan, and has become a new factor in Indo-Pak relations. You should drive home point that if we agree to support an Indian five-year plan we would assume India would in its national interest continue to explore ways of improving its relations with Pakistan. Furthermore, we would naturally expect India and US would continue in broad agreement regarding their assessment of ChiCom threat to Asia and strategy required to meet it.

8. As further support to India’s defense effort, US has under consideration new program of military sales so that certain high priority items not covered by MAP could be purchased from US on favorable credit terms. FYI. We wish emphasize still contingent status of this program. Since India will continue to make substantial military purchases abroad from own resources, we see considerable merit to military sales program for our balance of payments purposes. If program approved, terms will be such as to allow us to compete effectively for this foreign exchange. End FYI.

9. In response Indian request we are now willing to provide all our MAP aid on grant basis, provided that satisfactory arrangements are made for meeting USMSMI rupee expenses by GOI. FYI. Suggest you use this as bargaining tool to obtain Indian agreement to Memorandum of Understanding I. We will send further instructions regarding Memorandum of Understanding II. End FYI.

10. We realize defense planning of the kind we believe India should do may tax Indian capabilities. Should GOI desire, we stand ready to provide advice in defense planning techniques. (FYI. This is delicate area. Any assistance rendered would be only in techniques, and US planners would not participate in decision as to content of Indian plan. You are authorized use this opportunity renew our invitation to Defense Minister Chavan visit US, accompanied by appropriate military and civilian officers, to study our techniques for defense planning. You may also wish explore concept of permanent national security planning organization with full time staff, which we believe India needs. End FYI.)

We plan have discussion with Ambassador B.K. Nehru here along above lines. We will also go over our plans with British Embassy. We know you will wish have similar talks with British in Delhi but we believe you should refrain from wide discussion (e.g., in Coordination Committee) for the present. Particularly since we have not yet had discussions with Paks on our MAP plans there it is important that we do utmost to keep info on our plans for India closely held. You should not approach GOI prior departure Chou En-lai from Pakistan.

Ball

1. Source: National Archives and Records Administration, RG 59, Central Files 1964–66, DEF 19–3 US–INDIA. Secret; Priority; Limdis. Drafted by David T. Schneider and Franklin J. Crawford (NEA/SOA); cleared in draft by Walsh, Gaud, Norbury, and Meade and by Warren, Dean, Komer, Solbert, Hirshberg, and Harriman; and approved by Talbot. Repeated to Karachi, London, and CINCSTRIKE/CINCMEAFSA.
2. Not found.
3. See footnote 2, Document 17.
4. See footnote 2, Document 3.
5. Printed in Foreign Relations, 1961–1963, vol. XIX, Document 342.
6. Printed ibid., Document 349.
7. Not found.