NEGOTIATIONS APPROACH IN SOUTH ASIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001100130042-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 19
• Document Creation Date: December 21, 2016
• Document Release Date: November 18, 2008
• Sequence Number: 42
• Publication Date: March 23, 1972
• Content Type: IM

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Secret W
25X1
DIRECTORATE OF
INTELLIGENCE
Intelligence Memorandum
Negotiations Approach in South Asia
Secret
73
23 March 1972
No. 0895/72?
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CENTRAL INTELLIGIl4WCE AGENCY
Directorate of Ircelligence
23 March 1971
INTELLIGENCE MEMORANDUM
Negotiations Approach in South Asia
Summary
New Delhi and Islamabad are edging toward ne-
gotiations aimed at settling issues arising from
India's decisive victory over Pakistan in Decem-
ber. Both sides publicly and privately claim they
want talks, but date and agenda are yet to be
agreed upon. The removal of virtually all Indian
troops from Bangladesh in mid-March removed a ma-
jor obstacle, but other impediments remain. A
major barrier to early negotiations over the im-
portant prisoner of war issue arises from India's
insistence that Bangladesh also partici-ate,
Prime Minister Mujib's refusal to join in talks
with the Pakistanis unless Islamabad first ex-
tends formal recognition to his government, and,
finally, President Bhutto's reluctance to grant
such recognition.
Bhutto's delay in accepting Prime Minister
Gandhi's offer for "unconditional" bilateral talks
reflects apprehension over India's declared aim of
establishing u "durable peace" on the subcontinent.
This carries a suggestion to Pakistani ears that
India wishes to go beyond the settlement of issues
arising from the December war and to get Pakistan
to concede the finality of the partition of Kash-
mir and to forgo military competition with India.
Note: This memorandum was prepared by the Office
of Current Intet'Lirence. It was coordinated within
CIA.
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A year ago significant Pakistani concessions
on Karehmir would have been out of the question.
There are indications now, however, of growi:rg
tolerance in Pakistan for an agreement on a per-
manent Kashmir border if this would stabilize
relations with India. Bhutto's recent statements
suggest he may he signaling a serious desire for
such stable relations. His political position is
growing stronger, but he cannot be sure how far
domestic tolerance goes, particularly among the
previously dominant military, for major conces-
sions toward India.
In preparation for the anticipated negotia-
tions, Bhutto is trying to bolster Pakistan's
position vis-a-vis India with additional support
from the US and China, the major powers Pakistan
considers its allies. He is also attempting to
mend relations with India's firmest supporter, the
USSR.
India will come to the conference table in a
vastly superior position. It is far stronger mil-
itarily, it holds 94,000 Pakistani prisoners, and
it occupies some 6,000 square miles of Pakistani
territory. Pakistan's bargaining assets are mini-
mal. It holds 600 Indian prisoners and less than
100 square miles of Indian territory. Bhutto has
some negative bargaining counters. Pakistan has
not yet recognized Bangladesh, which India would
like to see, and Bhutto retains the option to con-
tinue Pakistan's traditional "policy of confronta-
tion" with India. The maintenance of current de-
fense establishments is far more of a burden to
Pakistan than India, but in both countries mili-
tary spending retards economic development.
If negotiations do evolve, their outcome
will depend heavily on Indian magnanimity arid on
how far Bhutto and Pakistan can afford to bead.
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Scenario for the Talks
1. Both India and Pakistan claim they want
peace negotiations. In mid-February India in-
formed UN Secretary-General Waldheim that it was
ready for direct peace talks with Islamabad "at
any time, at any level, and without preconditions."
President Bhutto has repeatedly stated his willing-
ness to meet with Prime Minister Gandhi, but he
probably considered the withdrawal of all Indian
troops from Bangladesh a prerequisite. The with-
drawal of most of these forces in mid-March re-
moved a major impediment to negotiations but other
problems remain.
2. According to New Delhi, indo-Pakistani,ne-
gotiations must be bilateral, except in the case
of repatriation of prisoners captured in the East.
The Indians claim Bangladesh must participate in
talks on this matter because the Pakistani forcer,
surrendered to a joint Indo-Bangladesh command.
3. In recent years India has opposed involve-
ment by the UN or third parties in Indo-Pakistani
disputes, claiming :Little has been accomplished by
such participation. On the other hand, Pakistan,
the weaker party, has generally sought outside sup-
port as a means of internationalizing various prob-
lems and gaining sympathy. The press and foreign
diplomats in New Delhi have speculated that an early
Indo-Pakistani summit is likely and 'the city,s
thick with rumors that talks will begin shortly.
Nonetheless, India, with time on its side, is in no
hurry to get talks started. In part, this reflects
skepticism among Indian officials that Bhutto, who
is regarded more as a popular orator and clever
politician than a statesman, will remain long in
office. New Delhi apparently prefers a civilian
government under Bhutto than a reversion to mili-
tary rule.
4. There are bound to be problems in agree-
ing to an agenda. New Delhi favors a review of
"all outstanding issues" between the two nations,
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apparently on grounds that recent changes on the
subcontinent offer the best chance since the 1947
partition for a lasting Indo-Pakistani settlement.
India, however, appears to be aiming for the ul-
timate--a final resolution of the Kashmir dispute
and an end +o Pakistan's "policy of confrontation."
Bhutto's views on the scope of talks is unknown,
but Islamabad probably would prefer to stick to
issues evolving directly from the December war.
5. In any event, India approaches negotia-
tions from a position of strength. It emerged
from the 14-day war holding all the trump cards:
decisive military superiority; an independent
Bangladesh; sizable territorial gains on the west-
ern front, and 94,000 Pakistani civilian and mil-
itary prisoners. Furthermore, the conflict did
little damage to the Indian economy, and Prime
Minister Gandhi's already strong political stand-
ing further enhanced by her sweep of the state
elections in early March. India's military spend-
ing last year went up about $220 million, some 20
percent over fiscal 1971. (The Indian fiscal year
begins in April.) The increase was financed
largely by new government revenue measures. Mil-
itary hardware expenditures amounted to about $150
million. The USSR may raplace some of the more
sophisticated equipment through long-term credits
payable in rupees, while India's own defense in-
dustry can replace most of the aircraft, heavy
weapons, ammunition, and small arms. In addition,
the economic burden of refugee care has been
drastically reduced by the return to Bangladesh
of virtually all the ten million refugees who fled
to India in 1971. The resumption of trade with
Bangladesh, severed by the Indo-Pakistani war of
1965, may add five percent to India's annual ex-
ports,,
6. In sharp contrast, Pakistan's options
are minimal. rTegotiating assets are practically
nil: a few parcels of occupied land in the west,
600 Indian prisoners, and Pakistani recognition
of Bangladesh. Pakistan's overall domestic pros-
pects are difficult to assess as the new government
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under Bhutto feels its way in the face of domestic
unrest and economic problems. The economy requires
time and prudent leadership to adjust to the loss
of its captive markets and foreign exchange once
provided by the east wing. But prospects are favor-
able for the resumption of foreign aid and the
rescheduling of Islamabad's debts to the Western
consortium. Pakistan can recover economically,
given political stability and pragmatic economic
policies.
7. Bhutto will have to strike a delicate
bargaining balance at the conference table. He
cannot afford to be unreasonable, but neither can
he concede more than his country will tolerate.
Peering over his shoulder will be the military--
still the strongest organized element in Pakistan.
The armed forces have fallen on hard times as they
attempt to adjust to humiliating defeat and loss
of control of the government after 13 years.
Bhutto's sacking of army and air force chiefs on
3 March appears to have further reduced the mili-
tary's political role. But if Phutto were to ap-
pear too soft toward India, particularly on ter-
ritorial questions, elements in the military might
be tempted to move against him.
8. Bhutto has tried, with some success, to
exonerate the bulk of the armed forced by blaming
the Yahya regime for the loss of EMt~t Pakistan.
Even so, sentiment within the army and among con-
servative religious factions, students, and other
segments of the public favors a continued con-
frontation with India. Bhutto has already clashed
with some military officers over this, but he is
trying not to antagonize the army and may have
agreed, at least for the time being, to maintain
current force levels and disproportionate' budget
allocations. The military is also anXioLs for a
return of Pakistani prisoners
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9. Bhutto's stance toward India is conditioned
by Pakistan's relations with Communist China, the US,
and the USSR. Chinese support is vital as a counter-
weight to India, and Peking .s Pakistan's major pres-
ent supplier of military equipment, as well as a
source of sizable economic assistance. The relation-
ship has limitations as was obvious during the Indo-
Pakistani war, when Peking failed to lend more than
diplomatic and propaganda support. During Bhutto's
trip to Peking in February the Chinese proved unwill-
ing to increase their political support for Pakistan
or to extend significant new economic assistance.
Four previous loans were converted into grants and
re-payment. of a 1970 loan of $200 million was de-
ferred for 20 years. Pekin .spoke vaguely of addi-
tional loans later.
10. Islamabad is also looking for indications
of US support--diplomatic and economic--to buttress
its position vis-a-vis India. Pakistan welcomed
President Nixon's trip to China since Islamabad
counts the US and China as its most important
friends and supporters.
11. At the same time, Bhutto has made special
efforts to mute criticism of the USSR--a distinct
about-face from former president Yahya's last-ditch
effort to blame Pakistan's defeat on Soviet support
for India. Despite Moscow's firm backing of India
and Bangladesh, Bhutto apparently considers that
improved relations with the So-.iets are in Pakistan's
long-range interest, and he tried his hand at per-
sonal diplomacy during a trip to Moscow between
16-10 March. He did not gain much ground.
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[low it Began
The dispute over Kashmir began when
the Hindu Maharaja of Kashmir declared
for India in 1947. In succeeding months
Indian "-roops moved into Kashmir, and Pak-
istani guerrillas soon followed. Though
both sides accepted the principle of hold-
ing a plebiscite to ascertain popular wishes,
a deadlock resulted when Pakistan refused
to recall its invading tribesmen and other
personnel prior to the referendum unless
Indian troops also withdrew. In 19'9 a
cease-fire Line established under UN aus-
pices gave India control over about two
thirds of the original state of Jammu and
Kashmir. This included most of Jammu,
Ladakh, and the fertile Vale of Kashmir
with its capital at Srinagar. Overall,
Muslims constitute an overwhelming major-
ity of the 4.6 million inhabitants. Pak-
istan's portion called Azad Kashmir (Free
Kashmir), is an impoverished 40-mile strip
of land west of the cease-fire line contain-
ing about one million people, almost all
Muslims. Ostensibly, Azad Ku.shm'r is in-
dependent and claims to be the l'gitimate
government for all Jamm-ti and Kas;imir. In
actuality it is a pawn of Islamabad. The
regions north and northwest of the 1949
Line, consisting of a collection of small
princely states and tz?ibal areas., fall for
administrative purposes within Pakistan's
Gilgit Agency.
To New Delhi, Indian-held Kashmir's
ino'.usion in the Indian Union is "complete,
fina:, and irrevocable." It is of Little
economic significance to India, but Kash-
mir is important to Pakistan because it
contains the headwaters to most of the
rivers on which Pakistan depends for ir-
rigation purposes. Pakistan also covets
the Vale. There is Little contention over
India's continued hcZd cver Jammu and Pak-
istan's possession of Azad Kashmir and the
northern principalities.
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12. The Kashmir dispute still lies at the
heart of Indo-Pakistani antipathy, and it is bound
to figure prominently in any Indo-Pakistani nego-
tiations. Bhutto has made few public references
to Kashmir since assuming office in late December.
In an, interview on 18 February he singled out the
Kashmir dispute as a long-standing Indo-Pakistani
problem. He indicated that he was still assessing
the "Indian trend of mind" before deciding on how to
approach the ,:coblem. For all. that, Bhutto recog-
nizes that Inaia has what it wants in Kashmir and
is both able and determined to keep it. In an in-
terview with Indian newsmen in mid-March, Bhutto
took a seemingly more flexible line on Kashmir,
claiming the dispute should be resolved by the
Kashmiris themselves. In negotiations with India,
Islamabad probably would focus on the most prom-
ising short-term objective--reaffirmation of the
status quo ante along the 800-mile cease-fire
line of 1949.
13. In bargaining for Pakistani territory
captured in Kashmir in December, Bhutto would be
bound by domestic pressure, particularly in areas
near the border, to reject Indian efforts to re-?
tain any of the approximately 228 square miles In-
dia seized. Pakistan took about 48 square miles in
the Chhamb sector of Kashmir and an equal amount
in several areas of India farther south. The Pak-
istani military would press Bhutto to resist an In-
dian attempt to convert the 1949 cease-fire line
into an .nternational boundary that would, in ef-
fect, dissolve Pakistan's demand for a plebiscite
to determine Kashmir's final status.
14. India would like a definitive settle-
ment of the Kashmir problem-- Paki.stan's acknowl-
edgement that Kashmir's accession to India is
legal and final and that the Indian state of
Jammu and Kashmir is an integral part of India.
Indian officials probably realize that Bhutto,
even with his high credibility among the Paki-
stani masses, would be unlikely to risk such a
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concession. India probably will attempt to get
Pakistan to accept a permanent border near the
1949 cease-fire line, and Pr4.me Minister Gandhi
has already claimed, "There ,s no longer any
cease-fire line in Kashmir." The Indians will
want border adjustments at certain strategic
points in order to plug the routes used by Paki-
stani infiltrators in the past and to end. the
Pakistani threat to Indian lines of communica-
tion from certain high ground. The Indian posi-
tion along the cease-fire line has been weakened
in a number of spots by the closeness of Indian
supply routes to Pakistani territory. The sev-
eral outposts New Delhi is determin.d to retain
include one at Kargil where Pakistani positions
overlooked the Srinagar-Leh road, the principal
supply route to Indian troops in Ladakh. New
Delhi may be willing to return some captured
Kashmir territory in exchange in order to make
the Pakistani losses more palatable.
15. The Kashmir problem is so deeply
emotional, however, that negotiations may yield
no more than a tacit agreement that neither side
will attempt to press its claims by force and
that both will respect the 1949. cease-fire line
with the limited rectifications desired by New
Delhi.
Military Withdrawals
16. A mutual agreement to thin out forces
along the western front might also be possible.
At present about 180,000 Pakistani troops face
some 250,000 Indians. Each side has been guilty
of numerous cease-fire violations, but so far the
breaches have not been serious and are similar
to those that followed the 1965 war. India has
minimized these violations but Pakistan, largely
to focus international attention on the problem,
periodically publicizes them and routinely sub-
mits a list of alleged violations to the UN.
Pakistan maintains India is entrenching itself
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on Pakistani territory by forcing out the Muslim
inhabitants and constructing permanent defenses.
New Delhi has denied these allegations, as it has
denied accusations of an Indian military build-up
in Kashmir.
17. In mid-February Islamabad attempted to
get support for a special Security Council session
to consider the border situation, possibly leading
to the posting of a UN observation team along the
1971 cease-fire line below Kashmir. (UN personnel
have monitored the Kashmir cease-fire line since
1949.) Islamabad has halted this effort to get
the UN re-involved, at least for the time being,
because of the absence of a critical situation
along the border, the likelihood of a Soviet veto,
and international concern that acrimonious debate
in the UN might only endanger the prospects for
Indo-Pakistani negotiations.
18. Meanwhile, India has withdrawn its only
armored division from the border area to its home
base some 400 miles away. With 13 infantry divi-
sions and three independent armored brigades re-
maining, this withdrawal does not greatly reduce
Indian capabilities along the border.
The Indian Army has returned to its
prewar leave policy, and reserve units called up
prior to the war are being demobilized.
19. The home bases of Pakistani units are
close to the border, making the question of with-
drawal less of an issue in the case of India.
Other Captured Territory
20. South of Kashmir, India holds some 5,000
square miles of Pakistani territory. The largest
single slice is relatively unproductive land in
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? Pakistani gain
Indian gain
Sialkot.-
PUNJAB
Lahore.. Amritsar
PAKISTAN
:Hydorab INDIA
New Delhi*
SIND ?uoonpur
"- *Karachi
Both sides make
minor gains
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Sind Province. Of far greater signi-cicance to Pak-
istan is India's occupation of roughly half of
Sialkot District in Punjab Province, Pakistan's
breadbasket, east of Lal- re. Between 700,000 and
one million Punjabis have left their homes there
and registered as refugees in special Pakistani
relief centers. A Pakistani official estimated
that nearly half a million acres of crops, mostly
wheat to be harvested in May, as well as livestock,
numbering in hundreds of thousands,have been lost
in the Punjab alone. Another 75,000 Pakistanis
from Azad Kashmir and 425,000 from Sind have also
been forced off their land as a result of the war.
A group of Western aid donors is cooperating with
Islamabad to provide relief supplies to some 1.2
million refugees, but about two million may be di-
rectly affected altogether. So far, the refugees
themselves have not become a serious political or
economic problem for the government, but Islamabad
is aware that the'situation could become troublesome.
POW Repatriation
21. Domestic pressure in Pakistan for the re-
turn of occupied territory is coupled with a growing
demand for repatriation of the 94,000 civilian and
military personnel stranded in Bangladesh by the
end of the war. Pakistan, with only some 600 Indian
prisoners, has negligible bargaining leverage on
this issue. The problem is complicated for Bhutto
by New Delhi's insistence that repatriation negoti-
ations include Bangladesh. During Mrs. Gandhi's
visit to Dacca on 17-18 March, a Bangladesh spokes-
man affirmed that none of the Pakistani prisoners
will be repatriated until the Bhutto government ex-
tends recognition to Bangladesh. Under the auspices
of the Red Cross a small gesture of goodwill occurred,
however, in the exchange of gift packages and mail
for the captives. In addition, the first exchange
of a small number of seriously ill and wounded pris-
oners took place in late February. Dacca has now
approved the release of an additional 100 sick pris-
oners not accused of war crimes.
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Other Issues
22. A number of other issues could be raised
in the talks. Both sides probably favor restora-
tion of diplomatic relations, broken unilaterally
by Islamabad on 6 December, and the return of am-
bassadors to their posts in New Delhi and Islamabad?
There might be some movement on the restoration of
communications and travel and trade links, some of
which have been severed since 1947. Although India
has not been willing to trade with Pakistan since
1966, Pakistan continues to refuse to trade directly
with India. Having lost its market in Bangladesh,
Pakistan may be more reasonable. Commercial over-
flights have been resumed, but the national air
lines of India and Pakistan still do not overfly
the other country. Neither has there been agreement
to reopen border crossing points or to resume rea-
sonably unrestricted travel for Indian and Paki-
stani nationals.
Pakistan-Bangladesh Negotiations
23. From all accounts, Bhutto wants to estab-
lish a modus vivendi with Bangladesh but to postpone
formal recognition. He repeatedly has voiced his
desire to meet with Mujib. The two leaders have ex-
changed letters but have not met since Bhutto re-
leased Mujib on 8 January. Islamabad recently offered
Dacca 122,000 tons of rice on humanitarian grounds,
but Dacca is unlikely to accept before Pakistan rec-
ognizes Bangladesh.
24. Before Pakistan takes this step, Bhutto
evidently wants to make sure he has done all he can
to forestall formal separation of the two wings.
Diplomatic countermeasures against countries that
recognized Bangladesh and Pakistan's withdrawal from
the Commonwealth were part of this strategy. But,
as time passes, Bhutto and most Pakistanis, appear
more reconciled to the "reality" of Bangladesh and
to the eventual normalization of relations. It was,
perhaps, an effort to encourage this facing of re-
ality that Bhutto, looking to a more distant future,
predicted recently that the two countries "will come
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together again in some form of shape." A partial
restoration of commercial ties might be an early
step toward acceptance of the status quo. And at
some point Islamabad and Dacca will have to divide
up assets and obligations of the two wings. This
is an extremely complicated issue and will entail
many months of difficult negotiations.
25. An early Bhutto-Mu jib meeting would be-
come less likely if Dacca were to go ahead wit;i its
announced intention to hold trials for Bengali and
Pakistani "war criminals." Bangladesh authorities
reportedly have arrested several thousand civilian
"collaborators" who are to be tried under civil law
in open court. On 23 February a Bangladesh spokes-
man claimed Dacca also plans to try in special courts
100 senior Pakistani military officers, including
General Niazi who commanded Islamabad's forces in
East Pakistan for part of the war. Although the
Indians hold Niazi and most other accused Pakistanis,
the spokesman claimed they would be made available
for trial in Dacca. In the Indo-Bangladesh communi-
que issued on 19 March, Mrs. Gandhi pledged that New
Delhi will "fully cooperate" in bringing prisoners
accused of war crimes to trial. India, however, is
not committed to a specific timetable. New Delhi
apparently is not enthusiastic about the trials, but
acquiesced to at least a few symoblic trials that are
backed by solid evidence and conform to recognized
legal processes.
26. A dramatic series of war crimes trials
could have adverse repercussions for the estimated
400,000 Bengalis residing in Pakistan. Bhutto has
publicly offered to send to Bangladesh all Bengali
military personnel (about 30,000) and civil officials
(about 8,OGO) who desire to go. The fortunes of the
Bengali members of the Pakistani armed forces are
steadily declining, and most have been transferred
into special units under relatively mild restrictions
or otherwise segregated from other troops. Members
of the air force have been grounded and naval person-
nel have been assigned ashore. The Bengalis realize
they have no future in the military and most are
probably anxious to go to Bangladesh as soon as pos-
sible.
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27. Conversely, Pakistani officials have de-
manded better treatment of the roughly one million
Biharis (non-Bengali Muslims) in Bangladesh, ra num-
ber of whom have been ill treated by the Bengalis
in reprisal for Bihari cooperation with the Paki-
stani Government before Bangladesh independence.
Although Mujib said he would welcome the exchange
of Bihari s for Bengalis, Islamabad would he highly
unlikely to accept a mass influx of Biharis for a
number of reasons, including the heavy cost of such
an exchange and the inevitable difficulties of as-
similating the Biharis in Pakistan.
28. Partly to offset recent publicity condemn-
ing the alleged maltreatment of the Biharis and to
shift attention to Pakistan, Mujib requested UN as-
sistance in protecting Bengalis in Pakistan. To
date, however, there is no evidence of any signifi-
cant mistreatment or systematic persecution of Ben-
gali civilians in Pakistan. Some Bengali civil serv-
ants have been transferred to non-sensitive positions,
but none has been interned or imprisoned, and Bengali
private citizens have so far experienced little more
than occasional harassment.
Outlook
29. The creation of independent Bangladesh
presents a unique opportunity for India and Pakistan
to overhaul their embittered relationship. Pakistan
deeply resents India's crucial role in support of
the Bengalis, but, nationalism aside, most Pakistanis
probably have few regrets at the loss of the east
wing. In many respects East Pakistan was becoming
an economic liability--a growing, claimant of foreign
aid and a declining net earner of foreign exchange.
30. President Bhutto acknowledges the need for
a modus vivendi with India, but the extent of con-
cessions he can make is inhibited by an underlying
fear in Pakistan that New Lelhi ultimately intends
to absorb the Pakistanis-
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31. The lasting settlement both countries claim
they want would enable them to concentrate on domes-
tic developments, but they appear to be far apart on
the conditions leading up to such a state of affairs.
India, with its vast military superiority, is un-
alterably opposed to the rearmament of Pakistan, and
at the same time continues. to replenish its own ar-
senal. The arms build-up on both sides makes the
professed desires of each for peace hard to credit.
32. It appears that Bhutto would now like to
focus on issues arising from the December war. In
recent weeks he has strengthened his own position
at home. He has quelled mounting dissatisfaction
with his "one-man rule" and his delay in honoring
the pledge to institute parliamentary government.
Bhutto's domestic problems are far from solved, but
the agreement to end martial law on 14 August, four
months after the National Assembly convenes, robs
opposition forces of their main rallying point.
33. A preliminary meeting between Bhutto and
Mrs. Gandhi may come before full-scale peace talks.
If the two leaders find their objectives appear
compatible, negotiations could begin shortly. Whether
such a summit would be fruitful would depend on In-
dian magnanimity, Pakistani restraint, and mutual
trust. All three have been in scarce supply in the
past. But there are new circumstances and new lead-
ers and it is just possible they could work together
to produce a breakthrough to a more cooperative era
in South Asia.
SECRET
Approved For Release 2008/11/18: CIA-RDP85T00875RO01100130042-6