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

500. Memorandum From Edward Hamilton of the National Security Council Staff to the President’s Special Assistant (Rostow)¹

Washington, June 26, 1968.

SUBJECT

• Military Supply Policy for South Asia (To be discussed at SIG Meeting scheduled for Thursday, June 27)

The Problem

You should try to read through the attached State papers—both the issues paper and the NEA position paper.² They are better than most.

You know our present military supply policy in South Asia, announced in April 1967. We do not sell lethal end-items to either India or Pakistan; we do sell spare parts (which is meaningful only to Pakistan) and we concur in third-country sales on U.S.-controlled equipment, on a case-by-case basis, when we think the sale will not contribute to an Indo-Pak arms race or seriously disrupt the power balance on the subcontinent. We have used this policy to sell modest amounts of spare parts, including ammunition, to Pakistan and to approve two third-country sales—British jet aircraft to India, and Italian or Belgian-owned tanks to Pakistan.

Nobody argues that this is a tidy policy. Both countries resent the arms embargo; it neither suppresses arms appetites nor effectively cuts off arms supplies in either country; it has encouraged both countries to turn very largely to Communist arms suppliers, with some undeniable political complications for us; it is especially hard on the Paks because they are American-armed and because the Indians have the political clout to close off all other suppliers except the Chinese and perhaps the French. When combined with the stresses induced by the Conte Amendment, this adds up to a constant and powerful irritant which is clearly poisoning our political and economic relations with both countries.

The main question at issue now is whether this situation would improve if we change our policy to permit direct U.S. sales of end-items on a case-by-case basis. Ben Oehlert very strongly favors such a change, largely on the ground—formidable, in view of our experience—that third-country sales simply don’t work as a means of keeping Ayub supplied with the arms he has to have to keep his throne and maintain some leverage with India. Chet Bowles argues precisely the reverse: that we should extend the embargo to spare parts and third-country sales and put our chips on helping the two countries toward self-sufficiency in arms production. NEA proposes a compromise solution weighted toward the Oehlert end of the spectrum: that we should permit direct sales where we can get substantial arms-limiting conditions—such as a ceiling on defense spending—and that we should make a positive technical assistance effort to encourage self-sufficiency in arms and introduce cost effectiveness analysis into both military programs.

Merits

I think everybody agrees that, all other things being equal, it would be very pleasant if the President had unfettered authority to make arms sales to India and Pakistan when and if they made sense. Most of us also agree that this authority would help, not hurt, our efforts to get both countries to be sensible about their military spending.

Unfortunately, other things are far from equal. As matters now stand:

1. Even if we wanted to, we could not sell any jet aircraft or other sophisticated weapon to either country without making an equal cut in economic aid unless the President determined it to be vital to our security. This would be difficult in the case of India. It would be next to impossible for Pakistan.

2. Even if we wanted to, we would not be able to make credit sales—which are necessary if we are to be competitive on most items—after June 30 unless the military credit sales bill or equivalent authority is enacted. Even if it were enacted, the money we have requested is fully earmarked for other countries (Korea, Iran, etc.) where we have outstanding commitments.

3. There is no sign that the Congressional tide which last year produced a rash of amendments limiting arms sales to poor countries has run its course. Indo-Pak tension was an explicit and oft-cited example of the kind of thing the Congress is concerned about. However wrong-headed they may be about how to go about dampening arms races, we must face the fact that we have not persuaded them that arms sales are a good instrument to this end. As a practical matter, therefore, we could expect real trouble on the Hill if we proposed to make sales on the subcontinent.

The question is whether we eliminate one of several major barriers to arms sales to India and Pakistan—and, whether the removal of one will strengthen or weaken the others. The scenario might well run as follows:

1. We would presumably make our policy public in connection with the sale of the second 100 M–47 tanks which we are now committed to try to get for Ayub. The reaction in India would be immediate and very strong. Our main argument to justify the Italian/Belgian deal for the first 100 tanks has been that we don’t want to fuel Pakistani paranoia directly, but that we are prepared passively to concur when Ayub can be persuaded to buy old, cheap, U.S.-controlled equipment from others rather than new stuff from the French or the Chinese. This has consistently been labeled a smokescreen by many Indians; this change would expose it as just that. Bowles (overstating the case) now argues that the third-country tank deal may well “kill us” in India. Certainly, it is fair to say that a subsequent direct sale would cut our political influence—though perhaps not our economic policy influence—to the vanishing point.

2. The Paks would see this as a door thrown wide and would rush in with any number of requests for credit sales of high-powered weapons, particularly aircraft. (They have already given us a list of items they feel they must buy somewhere in the near future.) When confronted with the constraints presented by the Conte Amendment, the military credit sales problem, and the general attitude on the Congress, they and we would rapidly discover that all we can really do in the way of major sales are M–47 tanks. We could not, for example, supply the F–5’s and F–104’s Ayub wants. The resulting frustration could very well nullify whatever advantages flow from our policy change.

3. If and when the specific irritation of the tank sale to Pakistan settles down and the Indians looked seriously at the new policy, they would, in my judgment, probably still conclude that it was heavily weighted toward Pakistan. India is now almost entirely dependent on Soviet weapons systems for modern arms. She is committed to the maintenance procedures and systems involved. However much many Indians would like to balance things a bit, it would not make much economic sense for India to take on new and wholly different major weapons systems—even if we could make them available. Beyond that, U.S. cash sales couldn’t possibly compete with Russian barter arrangements, which spread payment over 10 years. The real effect of the amendment would be to permit us to sell largely to Pakistan, which has no competitive alternatives—and no real threat other than India. In short, we could expect very little if any softening of the Indian position over time. Indeed, we could expect strengthening of forces in Indian politics which argue that we are out to rebuild Pakistan into a military threat and that India must build even greater military superiority over Pakistan. The result: higher Indian defense budgets—followed by higher Pakistani defense budgets.

4. Our determination to help the two countries become self-sufficient in arms—much as I wish it weren’t—would be superfluous with respect to India and infinitesimal with respect to Pakistan. India now has about 30 ordnance factories, including a plant to manufacture MIG-21’s. Pakistan doesn’t even produce her own steel: it would be many years, even with heavy American aid, before she would be in a position to produce the weapons that worry us and worry the Indians. The current proposal talks only of technical aid. It is a nice gesture, but we can’t expect it to be taken very seriously by either country. At best, it would worry the daylights out of the Paks.

I suspect it is clear that I just can’t see what benefits we could get through direct sales which would be worth the costs in the subcontinent and in the Congress. We should not delude ourselves; for the foreseeable future, the question reduces to whether we amend our overall policy in order to get 100 tanks into Pakistan. We cannot go a single step beyond that without knocking down other barriers which are largely beyond our control.

I am a devout supporter of the proposition that a workable policy in South Asia depends on some means of getting a minimal flow of modern weapons into Pakistan without forcing a substantial reduction in U.S. economic aid. I am just as irritated and frustrated as anyone else by the delays of third-country bargaining. But it seems to me far preferable to try to make that approach work better with the second 100 tanks than to buy more trouble in India and on the Hill by offering direct sales. I do not believe it can be shown that U.S. interests have yet been badly hurt by Communist military sales to either country, or that, even if they have been, we are going to be in a position any time soon substantially to reduce those sales. Nor do I think it important to our interests, for example, to “be in on the ground floor” of the build-up of a largely superfluous Indian navy. The only real benefit involved is the expediting of the tank deal with Pakistan. I just don’t think it is worth it.

Timing

We are all agreed that now is not the time to announce a change even if we decide on one. The aid bill would be severely threatened by an announcement; Katzenbach’s upcoming talks in Delhi would be blown out of the water; and we don’t need to provide the second 100 tanks immediately. Any announcement should wait until the Congress adjourns.

One other timing factor occurs to me. I would argue that it would be a considerable disservice to a new President to inherit the situation I think this change may stimulate. If possible, I think we should let a new administration build its own policy in South Asia without this albatross.³

EH

1. Source: Johnson Library, National Security File, Agency File, SIG, Vol. V, 40th Meeting, 6/27/68. Secret; Sensitive. A handwritten note on the memorandum reads: “Mr. Rostow did not attend SIG meeting.”
2. “The Issues” was the subtitle of an undated 3-page paper drafted by Spain on June 21 and entitled “U.S. Military Supply Policy for India and Pakistan.” The NEA position paper was an updated 7-page paper drafted by Spain, Prescott, and Coon on June 21 and entitled “US Military Supply Policy for South Asia: NEA’s View.” (Both ibid.)
3. The Senior Interdepartmental Group met on June 27 to consider, inter alia, the question of a military supply policy toward the subcontinent. Ambassadors Bowles and Oehlert, both in Washington for consultations, participated. Bowles argued for the suspension of both direct and third-country sales of lethal weapons, and Oehlert argued for a more flexible military supply policy that would countenance direct sales where the situation dictated. Battle contended that, in light of the impending change of administrations and problems with Congress, it was a bad time to contemplate a change in policy. After discussion, the SIG agreed to recommend maintenance of the existing policy, and to encourage the tank sale by Belgium to Pakistan to meet Ayub’s immediate problem. (Summary of discussion and decisions at the 40th SIG meeting, prepared by Katzenbach on July 5; ibid.) The SIG discussion and recommendations were summarized by Katzenbach in a July 3 memorandum to the President. (National Archives and Records Administration, RG 59, Central Files 1967–69, DEF 12–5 PAK)