Memorandum of Conversation with Secretary of State Dean Acheson, the Ambassador of India, and Others

THINK 13 DEPARTMENT OF STATE and GERVICE** of 38 187 Memorandum of Conversation DATE: February 15, 1949 SUBJECT: Farewell Call of the Indian Ambassador, Sir Benegal Rama Rau PARTICIPANTS: Mr. Dean Acheson - Secretary of State Sir Benegal Rama Rau - Ambassador of India Mr. Joseph 3. Sparks - SOA COPIES TO: S NEA SOA 1-1493 The Ambassador opened the conversation by referring to the current unsatisfactory economic situation in India and India's need for exchange assistance arising out of its deficit trade balance with the dollar area. I re- ferred to the applications which I understood India was making to the World Bank and the Export-Import Bank and the Ambassador stressed that India was not asking for gifts and only needed assistance at all because its large sterling balance was, with the exception of $60,000,000. per year, being held inconvertible by the Briti sh. He said that India's adverse trade balance had been in the neighborhood of $200,000,000. last year and that the Indian Government was seriously concerned not only for economic reasons but because of the political situation. In this connection, he said that he was afraid that the success of the Marshall Plan in western Europe would mean that Communi: sm would turn on the Far East and particularly India, with renewed vigor. He mentioned the new universal sufferage contained in India's draft con- stitution and said that unless substantial ecónomic progress could be made by the democratic government currently in office, there was a definite possibility that the large majority of India's population, which is grossly DECLASSIFIED E, O. 11652, Sec. 3(E) and S(D) or (E) groner Dept. of State letter, 2.23.218 Bx NLT- H : NARS Date 4-20-76