216. Memorandum From the Executive Secretary of the Department of
State (Eliot) to the
President’s Assistant for National Security Affairs (Kissinger)1
2
Washington, January 26, 1972
Subject:
- Military Supply Policy for Pakistan and India—Munitions List
Items
The military situation in South Asia is still fluid. The cease-fire is
holding and there is no reason to think it should not continue to do so.
However, there is as yet no agreement on withdrawals in the West and
apparently no progress on POW’s. In the
East the Indians claim to have withdrawn three-quarters of their forces
from Bangladesh but a substantial number remain and can be expected to
do so, at least until the law and order situation inside Bangladesh can
be met by reconstituted Bengali police and paramilitary forces.
Military losses sustained by the two sides were considerable but we do
not have solid statistics. Bhutto
alluded briefly to his country’s need at some point for resumed military
supply from the United States when he was here in December, but has not
raised it since becoming President. His new military chief, General Gul
Hasan, has spoken in general terms of future needs and Ambassador
Raza has given us a list
of previously held up items on which he has asked action, but it is
unclear whether this is part of a considered review of requirements by
the GOP in the context of war losses and
a reassessment of future budgetary allocations. Bhutto will be going to China late this
month and we assume will seek some indication while there of China’s
future military supply policy toward Pakistan.
In this situation we believe our own policy of holding up on Munitions
List items for both India and Pakistan should continue essentially
unchanged for the next several [Page 2] weeks. We should defer any decisions until the situation is further
clarified, both as to withdrawal and as to our political relationships
with each of the countries of South Asia. There is also the factor of
their relationships and ours with China and the Soviet Union.
The recommendations attached rest on this basic premise and are
short-range in nature. As the political outlook becomes more clear, we
will need to review which of the following kinds of longer-range
policies would further our interests in South Asia:
- a.
- Assistance to Pakistan to recover some of its wartime losses
in lethal end items, possibly by a revision and expansion of the
1970 One Time Exception for aircraft and APC’s now held in abeyance.
- b.
- A reversion to our prewar policy of permitting the cash sale
to both India and Pakistan of ammunition, non-lethal end items,
and spares for previously supplied equipment.
- c.
- A cash and carry policy that would permit the sale to both
countries, on a case-by-case basis, of both lethal and
non-lethal military equipment and spares.
- d.
- Indefinite continuation of the present suspension of the sale
or delivery of any Munitions List items to either
country.
- e.
- A combination of one or more of the foregoing
alternatives.
[Page 3]
Attachment
Background Paper
Washington,
undated
MILITARY SUPPLY POLICY FOR PAKISTAN AND INDIA MUNITIONS
LIST ITEMS
PAKISTAN
- 1.
- Decisions Already Taken:
- —Issuance of Munitions List licenses and renewal of
expired licenses were stopped in early April
1971.
- —On November 8, 1971, all remaining outstanding
licenses were cancelled. ($5 million worth of Munitions
List items were exported between March 25 and November
8; licenses cancelled on November 8 were valued at about
$3.6 million.)
- 2.
- Present Status:
- —Pakistan Ambassador Raza on December 22 requested licenses
for those items presently in the possession of Pakistani
agents in the U.S. and which could not be shipped
earlier because of the expiration or cancellation of
Munitions List licenses. Their value is approximately
$.5 million. These are almost entirely Foreign Military
Sales items and [Page 4] include spares for military
aircraft, parts for military vehicles and miscellaneous
other spares and equipment.
- —Ambassador Raza on December 20 and 22 also
requested new licenses for an additional $2 million
worth of Munitions List items including one application
for infra-red target detection equipment worth $1.5
million. The remainder includes parachutes, tank
periscopes, and various types of communications
equipment.
- —General Gul Hasan on January 11 expressed the hope to
our military representative in Islamabad that the arms
embargo would be lifted so that “badly needed APC’s communications gear,
vehicles and spares for tanks and equipment” could be
procured.
- —It is not clear whether Ambassador Raza and General Gul
Hasan raised the arms issue on their own or on the basis
of a high-level political decision by the GOP. Bhutto, for his part,
has given no indication of his thoughts on the
resumption of arms supplies since becoming
President.
- 3.
- Recommendations:
- —That we continue to defer action on Ambassador
Raza’s
request that we issue licenses for those Munitions List
items presently in the physical possession of Pakistan
agents in the U.S. (approximately $.5 million worth,
mostly spares for military equipment, including
aircraft).
- —However, we should keep this particular request under
active review should we wish to take a first step at
some early date in reopening Munitions List licensing to
Pakistan. Should we take this step our public and
Congressional posture on this exception could be that we
are permitting this adjustment since the items already
belong to the Government of Pakistan, the amount is
small, and has little bearing on the overall military
position on the Subcontinent. There is no legal bar to
such a step, although there may be some criticism in the
Congress.
- —That we also defer action on Ambassador Raza’s requests for
licenses for $2.0 million in new Munitions List items
but that we assure him this matter remains under
continuing review.
[Page 6]
THE ONE-TIME EXCEPTION
- 1.
- Decisions Already Taken:
- —Contracts were signed in early 1971 for manufacture
and delivery of 300 Armored Personnel Carriers (APC’s). The Government of
Pakistan made a down-payment of $1.3 million, 10 percent
of the total $13 million cost. We still hold the down
payment. Talks were underway with the GOP on possible sale of
some twenty aircraft under the One-Time Exception, but
no agreements had been reached on types, numbers or
costs.
- —In early April 1971, all further action on the
One-Time Exception was stopped.
- 2.
- Present Status:
- —Action on the One-Time Exception remains in abeyance.
However, the manufacture of the APC’s has continued, with the first 100
scheduled to come off the production line in May or June
1972. (If [Page 7]
these are not delivered to Pakistan, we would need to
make an effort to find an alternate consignee.)
- —The GOP has not
raised the question of the One-Time Exception at the
political level since the termination of hostilities.
However, as noted above General Gul Hasan on January 11
described APC’s as the
kind of equipment “urgently” needed.
- 3.
-
Recommendation:
—That we continue to keep the One-Time Exception under review
until agreed withdrawals have taken place, the present
ceasefire has taken on a more permanent character, and until
our policies toward the Subcontinent have evolved. At that
point we should reassess the situation, in light of
political circumstances and what we know of Pakistan’s
military needs.
[Page 8]
INDIA
- 1.
- Decisions Already Taken
- —On December 1, we revoked licenses worth $2 million
for ammunition components and ammunition related
equipment. On December 3 we revoked all remaining
outstanding licenses worth $11.5 million, bringing to
$13.5 million the total of embargoed licenses.
- —We have made only one exception to this embargo. On
December 22, we granted Delco an exception to continue
normal repair and maintenance on inertial guidance
systems for Air India’s 747 aircraft.
- 2.
- Present Status
- —The embargo has generated considerable pressure among
American suppliers for modifications in the policy on
the grounds of commercial hardship. In many cases
American manufacturers had begun production of equipment
under valid licenses or under contracts with the
Government of India and except in the case of certain
types of defense contracts they may be unable to obtain
reimbursement.
- —Several of the cases are fairly substantial,
including a request from Delco to export further
inertial guidance systems and spare parts to Air India
worth $6 million and the $10 million of valid contracts
under the U.S.-financed Peace Indigo early warning
communications project.
- —The Government of India has also raised with us
several cases including the Peace Indigo project on
which it would like an early clarification of our
intentions.
- —Details of these and other cases of hardship which
have come to our attention are contained in the
annex.
- 3.
- Recommendations:
- —That we take no decision at the present time to
modify our Munitions List embargo for India. A reversal
of our embargo at this time would be premature given the
continuing presence of Indian troops in Bangladesh and
the lack of progress on withdrawals in the west.
- —At a later date, if there is progress on these
fronts, or if there is domestic commercial pressure, we
may wish to consider some limited exceptions. Of
particular urgency is the question of spare parts for
Air India’s inertial guidance systems and we may wish to
give priority to this question when exceptions are being
considered.
[Page 11]
INDIA
MUNITIONS CONTROL CASES
1. DELCO has requested reinstatement of its
licenses to export $6 million worth of Carousel inertial guidance
systems and spare parts for replacement and repair of the systems on
Air India’s 747’s. These items are on the Munitions List because of
the technology involved. In the past this has been an important U.S.
export to Air India which already has a number of Carousel systems.
Because these systems are necessary for the safe operation of the
747 and because they are an integral part of Boeing’s commercial
relationship with Air India, we have permitted Delco to perform
regular maintenance and servicing of Air India’s Carousel systems.
In the near future Air India will have an urgent need for spare
parts for its Carousel systems, and Delco is likely to put
particular emphasis on this element of its pending license
applications.
Peace Indigo—The Dynamics Corporation of
America, General Telephone and Electronics, Bendix and Philco/Ford
together have contracts totalling about $10 million for components
of the U.S. financed Peace Indigo early warning communications
system to tie together the “Star Sapphire” radar system we supplied
India after the 1962 Sino-Indian war. They have approached us
individually for exceptions, [Page 12] and the GOI
has also asked for some indication of whether we intend to allow
this project, which is financed with a $17 million FMS credit, to proceed. DOD reports that its General Counsel
believes because of the credit, DOD
may have to reimburse the American suppliers for losses as a result
of the licensing ban.
C–119 Spares—Just before the war, Fairchild
and Curtis-Wright finally completed negotiations for a long-term
supply of spares for the India Air Force’s C–119 aircraft.
Fairchild, whose contract is for about $2 million, has complained to
DOD, which was active in helping
to arrange the deal. Curtis-Wright, which has also contracts for $2
million worth of spares, has also been in touch with DOD. In addition Steward-Davies, a small company in
California, has asked for authorization to ship $50,000 worth of
parts which are necessary for the C–119’s to operate at high
altitudes; i.e., to re-supply Indian forces facing China in
Ladakh.
Watkins-Johnson has asked for
two exceptions. It has a $3 million order for microwave receiving
systems to be used for airborne strategic reconnaissance and
surveillance, the munitions control license for which was revoked
last month. It claims work on the order will help reduce
unemployment in the San Francisco area. It [Page 13] also disputes a decision taken in November
1971, which had nothing to do with the India-Pakistan crisis, to
place on the Munitions List some of its other radio receivers, which
it now wishes to export to India.
Verson All Steel Press—The GOI has recently asked us whether we
will permit the export of the second half of a shipment of tooling
equipment for production of cartridge cases. The first half was
shipped prior to our December 1 ban on ammunition. Verson All Steel
Press has not contacted us, but we expect that it will, since the
GOI is holding up payment on
this $500,000 shipment, which we caught at the docks on December
1.
Bendix has requested reinstatement of a license so that it can
complete the sale of equipment to modify the Star Sapphire radar
systems, which are now used for both military and civilian purposes,
to improve their capability for civilian air traffic control in
areas close to the radars. Bendix argues that while these
modifications will have some military significance, they will be
defensive, will not improve India’s capability against low-flying
aircraft and are identical to modifications the FAA is making in the
U.S. air traffic control system. Bendix wishes to ship the remaining
$600,000 [Page 14] of the
original $1.5 million order and is also interested in selling the
GOI other modifications to
improve further the radar’s capability for commercial air traffic
control.
