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

78. National Intelligence Estimate¹

NIE 31–64

Washington, December 10, 1964.

THE PROSPECTS FOR INDIA

The Problem

To estimate probable developments in India during the next three to four years.

Conclusions

A. India has survived the experience of the loss of Nehru with considerable initial success. We cannot yet be certain about the quality of Prime Minister Shastri’s leadership. Clearly he lacks Nehru’s prestige and authority, and thus far he has governed primarily by compromise and consensus. But in past posts he proved himself a generally effective leader, and we believe that he will gradually exert a firmer control. In domestic policy, he is unlikely to depart substantially from Nehru’s line, though in practice his socialism may prove more flexible and pragmatic. (Paras. 1–2, 5, 13–15)

B. The Congress Party, now led by a coalition of state leaders, will probably provide India with stable and orderly government for the next several years. However, continued jockeying for power between the center and the states, as well as strains within the central government itself, are likely at times to generate indecision and inefficiency. Prospects for Congress unity would be clouded were Shastri to depart from the scene in the near future, but the Congress leadership could probably agree on a successor. There are no effective nationwide opposition parties, and in the 1967 elections Congress will probably continue in its dominant position at the national level and in all but one or two states. (Paras. 4, 6, 8–12, 18)

C. The pace of economic growth has slowed considerably during the past three years. In particular, agriculture has shown no increase in output. Industrial growth has been better, and industrial production is likely to grow by 40 to 50 percent during the Third Five-Year Plan (1961–1966). Over the five year period, GNP, instead of rising by the planned 30 percent, will probably increase by no more than 18 to 20 percent, or about the same amount it increased during each of the first two plans. The still tentative Fourth Five-Year Plan (1966–1971) sets forth even more ambitious goals, including much larger investments in the agricultural sector. India is unlikely to achieve these goals, though food grain production will probably increase significantly by the late 1960s. In any case, increased foreign aid will be needed, as import requirements and debt servicing charges will rise faster than exports. (Paras. 19–31)

D. The Shastri government’s foreign policies will probably be less concerned with broad international questions and more devoted to specific issues involving India’s self interest. India will continue its policy of nonalignment, which in recent years has come to be focused on the need for support from both the US and USSR in the confrontation with Communist China. Between India and China, we foresee neither a general settlement nor an outbreak of major fighting. A prerequisite of any substantial easing of Indo-Pakistani tensions is a settlement of the Kashmir dispute, and of this there is no early prospect. However, major hostilities between the two countries are not likely, and some specific problems may be resolved. India will devote more attention than in the past to its other neighbors, seeking to reduce possible Communist Chinese influence. In the nonaligned world as a whole, India will probably play a generally moderating, but on the whole less influential, role than it did in earlier years. (Paras. 32–42)

E. India’s leaders want armed forces capable of containing both Pakistan and Communist China and to this end have sharply increased defense spending under a $10–12 billion Five-Year Defense Plan (1964–1969). This, combined with military aid from the US, the USSR, and the UK, is enabling India to further expand and modernize its forces, but the plan is likely to take seven years to complete. Though the army still suffers from deficiencies of leadership and training, its combat effectiveness is improving and it could probably overwhelm its smaller Pakistani foe. While the Chinese would initially have the advantage of terrain in any conflict, the Indian army could probably stop a Chinese invasion before it reached the plains. (Paras. 43–49)

F. India has the capability for developing nuclear weapons, and the government is under considerable domestic pressure to do so. We believe that at a minimum India will continue to build up its nuclear capability, and this will enable it to start a weapons program promptly after a decision to do so. Whether the Indians decide to do so will depend on such questions as the cost of a nuclear weapons program and of a delivery system, the pace and scope of the Chinese program, and the importance the Indians attach to assurances from the US and other nuclear powers. (Paras. 50–51)

[Here follows the 16-page Discussion section.]

1. Source: Central Intelligence Agency, Job 79–R01012A, ODDI Registry of NIE and SNIE Files. Secret; Controlled Dissem. Prepared by the Central Intelligence Agency and the intelligence organizations of the Departments of State and Defense and the National Security Agency. All members of the U.S. Intelligence Board concurred in the estimate on December 10 except the Assistant to the Director of the Federal Bureau of Investigation, who abstained because the subject was outside his jurisdiction.