Foreign Relations of the United States, 1977–1980, Volume XIX, South Asia

116. Paper Prepared in the National Foreign Assessment Center, Central Intelligence Agency¹

Washington, November 30, 1978

THE NORTH-SOUTH DIALOGUE AND US RELATIONS WITH KEY DEVELOPING NATIONS

[Omitted here is material unrelated to India.]

THE NORTH-SOUTH DIALOGUE AND US-INDIAN RELATIONS

Active participation in the North-South dialogue is, for India, a natural extension of a broadly based foreign policy that calls for India to seek a leading role in the Third World. Preoccupations with its regional position and with US and Soviet relations, however, are of more immediate concern than the North-South dialogue to most Indian policymakers. India is a force for moderation in the dialogue, in part because of its interest in maintaining good relations with industrialized countries that are potential markets for its exports.

Indian policies on North-South issues are made at the sub-cabinet level in both the Ministries of Finance and External Affairs. Only major policy changes would be determined by the top leadership. Indian representatives to the UN in New York and Geneva apparently do not play a major part in the policy formulation process, but they, as do other Indian representatives to North-South meetings, have broad discretion to adjust to tactical circumstances during the course of international meetings.

India’s pragmatic approach to most issues suggests that the North-South dialogue would rarely be the cause of Indian behavior in other multilateral meetings, although it could be used as an excuse. India is especially pleased with the recent increased frequency and level of consultations with the US on North-South issues and could thus feel slighted if the US were to decrease or suspend its participation in the dialogue.

India has long been an active participant in the North-South dialogue, and since 1977 has concentrated on recapturing its position as a leading moderate in the Group of 77. New Delhi views the North-South dialogue as a valuable forum for building a political reputation as a Third World leader, for creating links to other LDCs, and for gaining some economic benefits from the developed countries. India sends highly qualified and well-briefed economic functionaries to the various North-South meetings. But while India’s commitment to the dialogue and economic issues as well as regional ties with neighboring states have a greater priority in its foreign policy, and New Delhi’s topmost decisionmakers are more involved in these matters. The US gains marks of appreciation in New Delhi when it informs Indian diplomats of the stands it intends to take at North-South meetings.

Being among the first of the LDCs to gain independence and because of the universalistic outlook of its first Prime Minister, Jawaharlal Nehru, India has been a founding member of international economic bodies as well as the non-aligned movement. As early as 1948, Nehru called for the formation of an international trade organization. The policy of supporting Third World organizations has been pursued actively, and Indian diplomats assumed high profiles at the Bandung Conference in 1955, hosted the second United Nations Conference on Trade and Development (UNCTAD II) in 1968, and played a leading role in the Conference on International Economic Cooperation, which ended in June 1977. Although India’s high profile diminished somewhat in the early 1970s, Prime Minister Indira Gandhi raised it toward the end of 1976, and the present Janata party government continues to be active in the North-South dialogue.

India sees itself as a moderating force in the dialogue. This viewpoint flows from the special place in which India finds itself as an underdeveloped nation with a large industrial sector. India has vast mineral resources and is a major LDC exporter of manufactured goods. It is also a very poor nation, however, still basically agricultural, whose growth just barely keeps pace with its constantly increasing population. Moreover, India’s population, land area, and general dominance in South Asia make it, in Indian eyes, a great if not quite a superpower. Thus policymakers in New Delhi see themselves as peculiarly fitted to bridge the gap between have and have-not states.

At the various international forums, Indian diplomats prefer to work behind the scenes as compromisers. Indian delegates to gatherings that involve the North-South dialogue maintain higher profiles and use every opportunity to cultivate ties with as many Third World countries as possible. Where feelings are strong, they are careful not to alienate the radical or the particularly influential as, for example, on matters dealing with Arab-OPEC sensibilities about Israel or African concerns about colonialism. But the energies of Indian representatives are more likely to be absorbed on coordinating committees and in private discussions, attempting to persuade others to moderate positions and language—especially over concrete economic issues.

India’s advanced industrial status sets it somewhat apart from the poorer LDCs, and its demands in the North-South dialogue are often less extreme. Further, India’s interest in increasing its market in the developed countries makes New Delhi more conciliatory toward the developed states. India supports most of the standard NIEO demands in North-South negotiations, including

—Lowering or eliminating tariffs on LDC products in developed markets and broadening the Generalized System of Preferences to include more manufactured goods from LDC producers.

—Rolling over and rescheduling official debts to permit more funding for development.

—Making international funding for commodity price stabilization available for general commodity development in the LDCs.

—Transferring the means for technological innovation from industrialized countries to LDCs.

—Extending national offshore sea limits to 200 miles and creating an international seabed authority to share the cost of mineral exploitation with LDCs.

With an eye to accommodating some poorer Third World countries’ demands, India has also advocated:

—Permitting the poorest LDCs to subsidize their export industries without attaching penalties on developed country markets.

—Reserving 0.7 percent of developed country GNP for development aid.

—Considering debt relief as a form of aid.

To toe this middle line of not alienating North and South and still obtain its economic goals, India sends well-qualified representatives to dialogue forums. They are usually members of the Commerce or related ministries and are free to act on their own should unexpected tactical points arise.

The Ministries of External Affairs and Finance have small sections related to North-South affairs—only two men in the former—and contribute to briefings from their distinct policy angles. At present the permanent economic representatives in Geneva and New York have little influence. Matters rarely reach up to the cabinet, and only when a new policy development comes up does a minister become more than perfunctorily involved or perhaps attend a conference. On the whole Indian negotiators are sophisticated and effective.

But the North-South dialogue is not a high priority in Indian foreign policy. New Delhi’s major concerns are bilateral relations with the two superpowers and relations with neighboring states. Since taking office in March 1977 the government of Prime Minister Morarji Desai has been striving to achieve a more “balanced” policy of nonalignment toward the US and USSR. On the one hand, Desai has followed the course initiated by former Prime Minister Gandhi in late 1976 of being more receptive to American initiatives. Indeed, Desai and President Carter have established a closer relationship than has previously existed between an Indian Prime Minister and an American President. Policymakers in New Delhi seem to have a revived appreciation for the fact that the US is India’s major trading partner, a key source of sophisticated technology, and the most important source of food grains during periods of monsoon failures. On the other hand, the Indians have been careful to modulate their new openness toward America so as not to antagonize the Soviet Union. Moscow has been India’s most reliable arms supplier as well as a consistent supporter during its controversies with China and Pakistan. Since the Janata Party came to power, there have been a number of high-level visits between Moscow and Delhi; the Indo-Soviet Friendship Treaty of 1971 has been reaffirmed though in muted fashion; and the Soviet and Indian leaderships reportedly have reached an agreement on the contentious rupee-ruble exchange rate.

Closer to home, New Delhi has been concerned to make India’s dominance in South Asia more palatable to neighboring states. The Desai government moved to settle an outstanding dispute with Bangladesh, coming to an interim agreement about the sharing of Ganges River waters.² It also acceded to Nepali demands for separate rather than unitary trade and transit treaties. The Janata government has also chosen to be restrained in commenting about Pakistani affairs and has made overtures to broaden diplomatic and commercial relations. With regard to China, New Delhi has responded positively but cautiously to the friendly initiatives of her powerful northern neighbor.

The North-South dialogue rarely impinges on the execution of these policies—or the men who formulate them at the topmost levels of the Indian cabinet. Failures or slowdowns in the dialogue have hardly ever been allowed to influence relations with the superpowers or with adjoining states, and if anything, the reverse is true—New Delhi has used North-South forums to take anti-US or anti-Pakistan stands for the purposes of other foreign policy goals. Indeed, should the extreme occur and the developed countries remain intransigent or even withdraw from the dialogue, the broad outlines of Indian international policy would not change very much—although there would be vociferous condemnation, an international forum would be missed by New Delhi, and there would be a good number of disgruntled, semiemployed negotiators in various Indian ministries. For the present, the American tactic of prior consultations about US stands at forthcoming North-South meetings seems to meet India’s sense of involvement and importance.

1. Source: Central Intelligence Agency, Office of Support Services (DI), Job 80T00634A: Production Case Files (1978), Box 13, Folder 1: Saudi Arabia’s Foreign Policy. Secret; [handling restriction not declassified]. A note on the first page of this section of the paper reads in part: “This paper was prepared by the South Asia Division of the Office of Regional and Political Analysis and coordinated with the Office of Economic Research.”
2. See footnote 5, Document 33.