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

451. Special National Intelligence Estimate¹

SNIE 31/32–67

Washington, August 3, 1967.

INDO-PAKISTANI ARMS RACE AND ITS ECONOMIC IMPLICATIONS

The Problem

To estimate the military capabilities of India and Pakistan over the next several years in conflicts: (a) India against Pakistan; (b) India against China, (c) India against Pakistan and China; and to assess the economic implications of present and probable future force levels in India and Pakistan.²

Scope Note

This estimate considers only the relative military capabilities of India, Pakistan, and China in a conventional war. It does not discuss the numerous domestic and international problems which would be engendered in any such conflicts.

Conclusions

A. India’s arms buildup began after the Indo-Chinese war of 1962, and was initially directed to improving India’s military capabilities against China, particularly in mountain warfare and air defense. Since the 1965 Indo-Pakistani war, India has further expanded its forces and has strengthened units facing Pakistan. India is now modernizing its armored units and its air force, and appears assured of a steady supply of modern military equipment over the next several years, mainly from the USSR.

B. Pakistan, with substantial US assistance, started to modernize its armed forces in the mid-1950’s. At the start of the 1965 war, Pakistan’s ground forces were one-fourth the size of India’s. Pakistan is seeking to bring them up to one-third India’s size, and has made some progress. Achievement of this goal is, however, likely to be considerably delayed. Since 1965, China has been Pakistan’s principal supplier, though considerable matériel has been ordered from France and various sources in Western Europe. Over the next few years, Pakistan appears less likely than India to have an assured source of large quantities of modern armaments and will probably fall further behind in this respect.

C. We believe that India would win any war with Pakistan alone. India could also probably repel a Chinese attack before it could reach the Indian plains. We believe that India’s armed forces would be able to prevent a major breakthrough by combined Chinese-Pakistani forces equipped with conventional weapons, though they might have to yield ground in Ladakh and northeastern India.

D. The arms race has aggravated the economic difficulties of both India and Pakistan. In real terms, India’s defense spending is about 100 percent, and Pakistan’s about 70 percent higher than in 1961. But for both countries, the greatest burden has probably been the drain on foreign exchange. This includes the expenditure of hard currency for military items, and in the case of India, the export to the USSR of commodities which would otherwise have earned hard currency. Such outlays by both countries are now about three times what they were in 1961. This has caused cutbacks in development programs and in imports for civilian production.

[Here follow the 11-page Discussion section of the estimate and a 1-page annex entitled “Implications of a Force Reduction.”]

1. Source: Central Intelligence Agency, Job 79–R01012A, ODDI Registry of NIE and SNIE Files. Secret; Controlled Dissem; Limited Distribution. According to a note on the cover sheet, the estimate was submitted by Deputy Director of Central Intelligence Rufus Taylor, and concurred in by the U.S. Intelligence Board on August 3.
2. In the Annex we examine the economic implications of a specific reduction of the armed forces of India and Pakistan as outlined by the Department of Defense. [Footnote in the source text.]