CDC COMPUTER CASE FOR INDIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88G00186R000901150016-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: December 27, 2016
• Document Release Date: October 22, 2010
• Sequence Number: 16
• Publication Date: October 12, 1985
• Content Type: MEMO

Declassified in Part -Sanitized Copy Approved for Release 2011/11/04 :CIA-RDP88G00186R000901150016-3
EXECUTIVE SECRETARIAT
ROUTING SLIP
Compt
NIO/NESA
D/NESA/D$
C/NE/DO
D/OSWR/D$
SUSPENSE
Remarks 24 0/S$
25 VC/NIC
INITIA~
E cutive Secretary
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United States Department of State
' ES SENSITIVE 853048 ._______~
Washington, D. C. 20520 Exe:;_;%-=^_-;y~
October 12, 1985
85- 38'6/1
:~S -~3; 2~
MEMORANDUM FOR MR. ROBERT C. MCFARLANE
THE WHITE HOUSE
MS. HELEN ROBBINS
DEPARTMENT OF COMMERCE
COL. DAVID BROWN
DEPARTMENT OF DEFENSE
MR. WILLIAM STAPLES
U.S. ARMS CONTROL AND DISARMAMENT AGENCY
MR. WILLIAM VITALE
DEPARTMENT OF ENERGY
MR. JOHN RIXSE
CENTRAL IN'T'ELLIGENCE AGENCY
Subject: CDC Computer Case for India
We have carefully studied Mr. Adelman's October 11 memoran-
dum on the CDC case. After considerable thought and weighing
of the various considerations involved, our assessment is as
follows.
The question at issue lies outside of direct U.S. computer
exports to India. Those exports, in terms of nuclear end-uses,
are now governed by the August 23 Letter of Assurance the
Indians have given to meet our policy concerns. The operative
paragraph reads:
The export will not be used by or on behalf of any'
entity engaged in research, design, development or
manufacture of nuclear explosives or nuclear
weapons, or in the research, design, construction,
fabrication or operation of equipment especially
designed or prepared for the production, utiliza-
tion,~ processing, or reprocessing of any nuclear
material (including heavy water), when such
activity involves at any time unsafeguarded nuclear
material (including heavy water), or in the design
and development of nuclear weapons carriers or the
conversion of non-nuclear carriers in a nuclear
weapon carrier.
~~'^?^'" ~^ENSITIVE
DECL: OADR
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This agreement was a major concession by the Indians and
represents the foundation of our renewed willingness to sell
items found on the Nuclear Referral List to India.
The issue at hand deals not with direct exports (covered
by the above assurances) but with computers assembled in India
with part US, part Indian components. The CDC computers are
unsophisticated (PDR 22 and 47), being just above the threshold
of PDR 20 where we begin to ask for nuclear assurances at all.
The products are intended to be the main multi-purpose computer
system for the Indian Government generally. Their principal
uses are in payroll, administration, record-keeping, education,
insurance, airline ticketing, and the like.
In late September, the Indians came back to us on the
question of nuclear end-use controls on the computers assembled
in India. They stated their willingness to maintain all
nuclear military use assurances (explosives, weapons, or
delivery systems) but asked for flexibility on our part for
peaceful end-uses.
The compromise solution would force the Indians to reaf-
firm our nuclear non-proliferation policy again while making a
minor concession in side letters. The side letter formulation
would prohibit all nuclear military uses and any use of the
computers in the process control of:
- unsafeguarded nuclear reactors
- the production of heavy water
- the enrichment of uranium
- the fabrication of nuclear fuel
- the reprocessing of spent nuclear fuel
These assurances cover all the major areas of concern in an
unsafeguarded nuclear program. There was some question earlier
about Indian use of the computers in heavy water production.
They have now told us in the last week that that they have
dropped that consideration because the computers in question do
not contain the appropriate hardware for that function.
Livermore Laboratory in California confirms this conclusion.
OES and S/NP support this approach in the context of a review
of USG policy now under way in five NEC on controlling computer
exports to non-full-scope safeguard status.
The CDC case is of major political significance to the
President's policy on improving relations with India. Indeed,
the President, Secretary Shultz, and Secretary Baldrige had to
intercede personally with Rajiv Gandhi in ,Tune 1985 to keep CDC
in the running. At that time the Indian contract committee had
already decided for Honeywell-Bull of France because of the
SECRET/SENSITIVE
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end-use controls question. The contrac*_ is, of course, worth
$500 million, and the predictions are that some $2 billion
worth of business will follow on.
A further key factor is that the Honeywell-Bull contract
involves no end-use restrictions at all. If we can get the
contract for CDC, we will, therefore, maintain some leverage
over Indian nuclear developments that would not ctherwise exist.
There are three major US interests to be met: eur non-
proliferation policy, our trade policy, and our policy to
improve relations with India. We believe that the State
proposal balances all three interests well and, importantly,
contributes to our new efforts to promote nuclear confidence-
building measures in South Asia. State believes we should,
therefore, proceed expeditiously to make the proposal on CDC
officially to the Indian Government, to permit the possibility
that it will be wrapped up at the October 23 meeting between
the President and Rajiv Gandhi.
Nicholas Platt ~''`'
Executive Secretary
SECRET/SENSITIVE
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