468. Memorandum From Edward Hamilton of the National Security Council Staff to the President’s Special Assistant (Rostow)1
SUBJECT
- The Arms Problem in India
We talked briefly on Tuesday about the fighter-bomber dispute in India. The following is a summary of where we stand now and what directions I would like to see us take in the future:
Facts:
- 1.
- In June, we gave the British permission to sell the Indians 24
Hawker-Hunter fighters. We insisted upon two conditions:
- —that they be replacements, not additions to Indian air power, and
- —that India assure us she would not follow through on the purchase of 200 Russian SU–7 fighter-bombers which was rumored to be under negotiation.
- 2.
- Over the last month it has become increasingly clear that:
- —the Indians are in the process of buying 150–200 SU–7’s from the Soviets at $1–1.7 million apiece;
- —they knew of this purchase at the time they assured us they wouldn’t (most of the planes were apparently contracted for by October 1966); and
- —they are going ahead with the deal regardless of our views.
- 3.
- We have already used some of our big diplomatic guns to nail down
the facts and to urge the Indians against going through with the
deal:
- —Bowles has called on Morarji Desai, pursuant to a very strong cable from Rusk pointing out that this Indian action would be the worst combination of bad faith, bad resource allocation, bad strategy vis-à-vis Pakistan, and bad U.S. politics upon which continued massive U.S. aid to India depends;
- —Rusk has called in B.K. Nehru and made the same points;
- —Jerry Greene, our DCM in Delhi, has had several conversations with the No. 2 man in the Indian Defense Ministry, who gave us the original assurance and who is now the source of most of our information about what they are actually doing;
- —Bowles was instructed to make it clear that the atmosphere created by the handling of the SU–7 problem would affect the full range of our aid relations with India, including the wheat deal. (We did not threaten to revoke the wheat deal if we didn’t get satisfaction on the SU–7’s.)
- 5.
- Bowles, obviously upset, is urging that we not allow the SU–7 problem to poison our overall relations with India. He argues that India is now at a crossroads (“watershed” is his term), and that a tough démarche from us on the SU–7’s could well turn her away from the West and away from concentration on economic progress. He agrees the incident is regrettable and that it will probably cause some trouble in the Congress. But he argues strongly against doing much, if anything, about it.
- 6.
- Senator Symington—along with an unknown number of other members of Congress—knows the history of the problem up to but not including the details we have picked up in the past month. Luke Battle has mentioned to him a couple of times that we have a problem and that he wants to give him a full briefing soon. Symington has always been very strongly anti-India (and pro-Pak); he is sure to point to this as yet another shameful example of Indian untrustworthiness (and the facts will lend considerable support to his case).
- 7.
-
The Indians argue that:
- —the assurance applied only to new procurement, not to old orders;
- —British footdragging on the Hawker-Hunters made it clear that India could not depend on this aircraft as its workhorse for the period [Page 912] between the phasing out of their older planes and the phasing in during the 70’s of Indian-manufactured MIG 21’s;
- —the five-year defense plan worked out in 1964 and agreed to in principle by the U.S. provided for an air requirement which the SU–7’s will help to meet. There is no desire to exceed the 1964 plan, but India can’t afford any shortfalls, particularly since the Paks are not getting Mirage fighter-bombers.
The first proposition is transparently false. The assurance was clear. The second and third are now the objects of a study being carried out by DIA and INR. (Of course, even if the study shows that the Indians are not doing anything more than the 1964 plan prescribed, we will have to decide whether the 1964 plan—which was followed by the Indo-Pak war—still represents our concept of what Indian security demands.)
- 8.
- We are now engaged or about to be engaged in five separate
negotiations with the Indians, most of which are for their benefit:
- —a PL 480 wheat package totalling 3.5 million tons ($250 million);
- —a mid-November meeting of the Indian Consortium at which under normal circumstances we would pledge upwards of $380 million;
- —a $17 million Star Sapphire project providing for an early warning radar system against the Chinese;
- —a $25 million private deal under which the Bendix Corporation would join with an Indian corporation to build an airplane factory;
- —Negotiation of parallel U.S.-Soviet security assurances for non-nuclear signers of the NPT, particularly India.
Implications
- 1.
- If it leaked that India is buying 150–200 Soviet fighter-bombers after we received specific assurance that she would not do so, I think there is an excellent chance that the Congress would pass an amendment to the AID appropriation bill cutting off dollar aid to India unless and until the deal were revoked.
- 2.
- If we let the Indians get away with this reneging without penalty, it would be very hard for us to convince them we mean what we say in future arms policy negotiations. This would be a real credibility gap.
- 3.
- We have clandestine information that the Paks already know about the SU–7 deal. They are so short of foreign exchange that they have not yet done anything about it. But publicity will put them in a very different political situation, and we can expect heavy pressure to help them regain “parity.”
- 4.
- However, it is the combined judgment of our Mission in Delhi and NEA/Washington that no amount of U.S. pressure is likely to get Mrs. Gandhi to call off the SU–7 deal entirely. Any direct threat to cut off aid to India would probably have the reverse result—she would do a Sukarno rather than bend under pressure. (In fact, she probably [Page 913] doesn’t have the political weight to carry the Cabinet in any other direction.) The result would be dissolution of the Consortium, failure to make use of the economic recovery promised by the good harvest, and a heavy blow to any hope of rapid economic growth in India for some time to come.
Action Program
In summary, the Indians have been lousy. It makes sense for us to try to get them to undo the damage, but the chances aren’t really very good. It is very hard on our interests—both short and long-term—to cut off the help we are giving them, particularly grain. Yet it is terribly important that we have very soon a palatable story to tell Symington and other interested parties if we are to head off the problem in the Congress before it guts the Aid Bill. Any direct tying of aid to the SU–7’s alone would probably drive India into going through with the bargain and scuttle their development programs as well.
I have suggested that our policy be built along the following lines:
- 1.
- The SU–7 problem is directly tied to the Hawker-Hunters. We should immediately suspend our approval of the Hawker-Hunter deal until we get satisfaction on the SU–7’s. (It is particularly important to have done this by the time we talk to the Congress.)
- 2.
- We should agree with the Indians that the SU–7 problem cannot be looked at alone—that the real problem is what amount of resources should be allocated to defense, measured against an agreed concept of Indian security needs. We are willing to join India in a hard look at that whole question, starting as soon as they like.
- 3.
- In the meantime, however, the defense budget problem is so important to the overall development outlook in India that we do not feel we can move ahead with our Consortium pledge until there is substantial agreement on the broad question of the proper size of the defense effort.
Tactics
The current plan—which has not gone yet beyond the sixth floor2—is to put this line into a letter from Rusk to Mrs. Gandhi. (This is entirely because Mrs. Gandhi is Foreign Minister as well as Prime Minister at the moment.) We would try to do it diplomatically, and we have some basis for the joint study line in that the Indians themselves proposed general defense talks a few months ago. The cancellation of the Hawker-Hunter approval is not really likely to bother her much, although it probably will force her to make an explicit review and [Page 914] decision on whether to go ahead with the SU–7 proposition. The Consortium pledge threat may also be less powerful leverage than we would normally expect because she knows that we are now in a freeze on all new commitments and that the Congress is thinking seriously about cutting off the water. But it should be serious enough to get her to agree to the talks and perhaps to some modification of the SU–7 arrangement. (Obviously, we would push hard to get the SU–7 deal turned around completely if the discussions give us a substantive case against it.)
Perhaps most important, this letter would be a basic document we could show the Congress as evidence that we take this perfidy seriously and that we are doing something about it. When we have sent it, I would argue that Battle should have quiet talks with Symington and other interested parties on the Hill. I think it is much better to go to them than to let them be surprised by a headline. They may insist that we aren’t being nearly tough enough—that we ought to cut the Indians off entirely until they make good on their promise. But I think early consultation is the tactic best calculated to head this off if it can be headed off.
These are my thoughts. The letter is now in preparation in NEA, but I have no assurance that the Secretary will agree to go along. I will keep you informed.