62. Telegram From the Department of State to the Embassy in India 1

17. Embtel 3851.2 During call on Assistant Secretary Talbot June 30 Cabinet Secretary Khera said he had pretty clear impression India not likely obtain combat aircraft from US as long as it committed to MIG deal. Wanted to know if this actually the case. Talbot asked about MIG developments during Mikoyan’s visit, was told commitment for production facilities (not assembly) made some two years ago and had been “reinforced” during Mikoyan’s visit. He added many technical details remained to be worked out but basic deal firm and it hard to imagine could be changed now. In response question whether this meant India would be embarking on two supersonic production lines he replied this apparently the case. Talbot said we considered this too [Page 132] much of foreign exchange burden. We had wanted be responsive to India’s request for help on HF–24 in hope this would ultimately meet need for supersonics, but question of two supersonic production lines would cause us serious trouble. Grant, who also present, remarked we recognized GOI would have political problems with Soviets depending on how far MIG deal had gone but that we thought it might be possible for US to help in combat aircraft field if GOI could phase out MIG program with a squadron of planes. Khera said he understood our position on problems MIG production caused us and would convey it to GOI. He wondered if this ruled out US help on jigs and tools for HF–24 production line. Talbot replied we would have to look at this very carefully.

Khera asked for reduction military credit sales interest from 3 per cent to 3/4 of 1 per cent on grounds India’s debt servicing load increasing greatly. He was told possibility putting military credit sales on same basis economic aid would be examined.

Reporting on London talks, Khera said he talked about HF–24 engine to Rolls Royce who now studying drawings and might possibly be in India in fortnight for on-the-ground look at plane.

Rusk
  1. Source: National Archives and Records Administration, RG 59, Central Files 1964–66, DEF 19–3 US–INDIA. Secret. Drafted by Crawford in NEA/SOA, cleared by Laise, and approved by Talbot. Repeated to London, Karachi, and CINCMEAFSA for POLAD.
  2. See footnote 2, Document 59.