197. Telegram From the Embassy in India to the Department of State1
531. Embtel 330.2 We are now reviewing our ongoing programs in light of effect of current hostilities. Over course of next week we shall be sending Dept series of separate messages covering economic aid, military aid, Peace Corps and USIS programs.
It is our belief that most new loan action as well as fourth plan dialogue should be suspended at least for duration of fighting although monitoring of past loans and existing and developing technical assistance projects should continue normally as possible. Cable reviewing this subject is now in preparation.
Most urgent decision we require is on PL 480.
GOI estimates that supplies wheat available under current PL 480 agreement (including July 26 60 day amendment) would be completely shipped by about Oct 25. If break in supply line is to be avoided, we would have to conclude new agreement within next two weeks to allow sufficient time for Indian supply mission Washington to begin purchases and arrange shipping for additional supplies after shipments under current agreement are completed.
Even if fighting should peter out, food shortage in India is likely to be serious to desperate in next 12 months, though too early to make firm estimates, prospects are that delay in monsoon will result in harvests significantly below level of last year. Pressure on foodstocks, already great, will be accentuated by current hostilities which bound to stimulate increased speculation and hoarding.
If in addition there should be a gap in arrivals of wheat and other commodities from US, it would be impossible to make it up by accelerating subsequent shipments since current GOI import requirements are already very near capacity of ports and internal transport system when scheduled on regular basis. Continued flow imports is necessary to enable GOI prevent breakdown existing distribution arrangements and to plan efficient utilization wheat and rice on yearly basis, and to avoid disastrous consequence for Indian people.
[Page 379]I wish to emphasize that if we should fail maintain shipments, effects on India and our position here would be drastic. Though Indians could get by for little while on indigenous supplies, existing stocks and some new cash purchases, they would quickly run into major catastrophe affecting tens of millions of people. Present stocks are meager and Indians lack foreign exchange for substantial cash purchases abroad. Indians would thus soon be running out of food and inability meet rationing commitments would result severe repercussions in major metropolitan area.
Moreover our unique ability assist in easing food shortages will do much improve our political position here which has been severely damaged by use of US planes and tanks by Paks. Equally important, when hostilities terminated hopefully in near future, adequate food will be primary requisite for economic stability and continuance development.
I assume there may be objectives under present circumstances to negotiating new agreement along lines recommended Embtel 330. If this is case I urge, for reasons indicated above, immediate authorization to conclude further amendment of Sept 30, 1964, agreement for additional million tons of wheat plus available rice and non-fat dry milk with assurances to GOI that we intend continue to help feed people.
- Source: National Archives and Records Administration, RG 59, Central Files 1964–66, AID (US) 15 INDIA. Confidential; Immediate; Limdis. Received at 4:13 a.m., and passed to the White House, DOD, CIA, and USIA at 4:40 a.m. Repeated to Bombay, Calcutta, London, USUN, Karachi, and Madras.↩
- In telegram 330 from New Delhi, August 19, the Embassy questioned the wisdom of using food assistance as a lever to promote agricultural policy decisions promoted by the United States. The telegram discussed the issues still in question with respect to negotiating a new P.L. 480 agreement. (Ibid.)↩