INDIA'S POLICIES TOWARD SOUTHEAST ASIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00927A006900020003-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 12
• Document Creation Date: December 20, 2016
• Document Release Date: February 13, 2006
• Sequence Number: 3
• Publication Date: February 7, 1969
• Content Type: SUMMARY

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Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Special Report
India's Policies Toward Southeast Asia
Secret
State Department review completed
N2 746
7 February 1969
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INDIA'S POLICIES TOWARD SOUTHEAST ASIA
India believes it has a vital security interest
in the future of Southeast Asia and is searching
for the means to influence events in the area.
With the primary objective of restraining Com-
munist China's aggressive ambitions, New Delhi
seeks to contribute toward the development of
viable economies and representative governments
capable of warding off all forms of foreign inter-
vention. India tentatively envisions the emer-
gence of a regional grouping of economically
interdependent countries whose neutrality
would be guaranteed by formal agreement
among all the major powers.
Motivated largely by an increasing concern
over the threat of Chinese-aided "struggles for
national liberation" in both India and Southeast
Asia, Indian officials in 1968 laid the ground-
work for an expanded role in the area, to which
New Delhi had previously accorded relatively
little attention. This unusual burst of Indian
initiative faces numerous obstacles, however, in-
cluding resistance within the countries them-
selves, opposition from the USSR, competition
from the Japanese, and the severe limitations of
India's resources. Nevertheless, New Delhi is
likely to persist in modest efforts to achieve
closer trade and cultural relations with its east-
ern neighbors, though such moves will at best
have only a marginal bearing on accelerating
economic development and strengthening the
ability of Southeast Asia to defend itself against
subversion.
Chandikeshvara, a Shivaite saint.
Dravidian bronze, 13th- 14th cent.
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BACKGROUND
India's present preoccupation with its na-
tional security is rooted in the magnitude and
success of China's offensive in the Sino-Indian
border war of 1962. This humiliating blow forced
India to adopt a more realistic view of world
affairs and to recognize that moral suasion is no
substitute for military strength. In the last two
years of his life, Prime Minister Nehru sought to
bolster India's defenses with military assistance
from East and West, while, disillusioned and
aging, he witnessed the decline of India's influ-
ence as an international mediator, leader of the
Afro-Asian world, and a moral force that had
discounted military power.
The blossoming of Sino-Pakistani relations
after 1962 added urgency to India's efforts to
equip itself against the possibilities of aggression
from its two hostile neighbors. The Indo-Pakistani
war in 1965 and the threat of further Chinese
aggression at that time caused India to abandon
any remaining complacency from the Nehru era
and to seek new answers to the vital problem of
national security.
CHANGING NATURE OF THE THREAT
The Indian Government has been coming
around to the view that the immediate Chinese
threat to India lies in subversion via "struggles for
national liberation" within India and in neighbor-
ing regions, rather than in a frontal military as-
sault in the 1962 manner. Chinese support for
insurrection in Thailand and Burma, the apparent
evidence of Chinese assistance in training and
arming rebellious tribal groups in eastern India,
and indications of Chinese support for Commu-
nist extremist movements in several Indian states
have dramatized the proximity and immediacy of
the threat.
New Delhi, groping for a means to meet
these situations, is faced with a number of puz-
Special Report - 2 -
zling factors and a sense of isolation. The Ameri-
can experience in Vietnam has raised doubts
about the most effective method of curbing sub-
version, and the prolongation of the Vietnam
conflict has clearly demonstrated to New Delhi
that modern military power does not constitute
an absolute deterrent. Whether force is relevant or
not, India's confidence also has been shaken by
doubts that it can count on guaranteed assistance
from the major powers. A US embargo on the
direct sale of lethal weapons to the subcontinent
has been in effect since the Indo-Pakistani war in
1965, and the Indians are not optimistic it will
soon be revoked. In addition, Indian press ac-
counts have given widespread coverage to sharp
cutbacks in US economic aid to India as well as to
popular and governmental disillusionment in the
US with American involvement on the Asian
mainland. Although the USSR appears likely to
continue supporting Indian interests against
China, India's confidence in the automatic relia-
bility of Soviet support has been weakened by
Moscow's willingness to sell arms to Pakistan and
by several rounds of difficult Indo-USSR negotia-
tions in 1968.
The Sino-Indian debacle in 1962 clearly
pointed out to India that its espousal of nonalign-
ment provided no assurance of support from its
like-minded Afro-Asian friends. Instead of rally-
ing behind India, they applied the policy of non-
alignment to the conflict and urged negotiations
between India and China. This disappointing re-
sponse led India to question seriously the value of
continuing to woo these countries. In recent
months, New Delhi has responded to Tito's pro-
posed 1969 nonaligned conference with, at most,
lukewarm enthusiasm.
India's political climate today is amenable to
some reorientation in foreign policy for other
reasons. There is again a discernible mood of
assertiveness in New Delhi-not unlike the early
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years of Nehru's leadership-but this time coupled
with growing nationalism and a feeling that India
should seek an enhanced international role com-
mensurate with its size and potential. Indian intel-
lectuals and politicians urge a more pragmatic,
self-reliant line in foreign policy that would
render India less vulnerable to pressure from the
major powers. The ultranationalistic Jan Sangh
party, a small. but gradually expanding opposition
to the ruling Congress Party, vigorously espouses
the resurgence of traditional Hindu values and
stresses their relevance to government policies.
Hindu nationalists, in particular, would see special
merit in greater Indian interest in Southeast Asia
based on the historic Hindu cultural links with
the area.
HISTORIC TIES
History does indeed verify India's significant
contributions to the cultural heritage of South-
cast Asia and India's imprint is evident even
today. During the first 13 centuries of the Chris-
tian era, Indian commercial and cultural influence
had a profound impact throughout Southeast
Asia-except in Vietnam, where Chinese culture
took precedence, and in the Philippines. Indian
merchants, Hindu priests, and Buddhist monks,
only rarely motivated by political concerns,
played a vital role in the development of Indian-
ized states capable of organizing large maritime
empires and of constructing such architectural
masterpieces as the 8th century Borobudur Bud-
dhist monument in central Java and the 12th
century temple of Angkor Wat in Cambodia. In-
dian historians proudly refer to Southeast Asia as
"Greater India," and quickly point out that un-
like China, India has no record of political con-
quest in any part of the area.
EXISTING RELATIONS
With varying degrees of cordiality, India to-
day enjoys good relations with each Southeast
Central Temple at Angkor Vat
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Asian government. The Indonesian independence
struggle was the first anticolonial cause cham-
pioned by independent India. Indo-Indonesian re-
lations until the end of the fifties were extremely
close and, following a period of strain between
1962-66, they are again growing cordial. New
Delhi nevertheless probably regards Singapore and
Malaysia as its two most reliable friends in the
area. Malaysia was the only Asian state to give
India its wholehearted support in the Sino-Indian
border dispute; Singapore has been the most
receptive to Indian overtures for an expanded
regional role. India's relations with the Philippines
have traditionally been less close, and have
stretched further apart since India reiterated its
support for Malaysia in the Sabah dispute. Thai-
land's close association with the US has caused
the government in Bangkok to be viewed with
some scorn and suspicion by the Indians, while
Cambodia's avowed policy of neutrality has
helped to cement Indo-Cambodian friendship.
New Delhi tends to view northern Burma as
an extension of its own military frontier against
China, and fears that the Burmese are not
equipped to counter Chinese-supported insur-
gency in that region. Because of Burma's policy
of isolation, it has cooperated only informally
with India in efforts to control insurgency and
infiltration along the Burma-Indian border. At
times, the Burmese appear to be slightly more
responsive to India's proposals for closer rela-
tions, but Rangoon will continue to give first
priority to avoiding any action that Peking could
see as provocative.
Nehru supported Indochina's struggle for in-
dependence, and since 1954 India has been di-
rectly involved in Vietnam by virtue of its chair-
manship of the International Control Commis-
sion, (ICC), a tripartite (India, Poland, Canada)
body charged by the Geneva Conference in 1954
to supervise the truce in Indochina. India's tolera-
tion of Poland's obstructionism has been largely
responsible for the ICC's inability to function
effectively in Laos, Cambodia, or Vietnam. New
Delhi favors a political settlement on the Geneva
model and the withdrawal of foreign troops from
Southeast Asia.
PLANS FOR AN EXPANDED INDIAN ROLE
In the early sixties India recognized with
considerable reluctance that greater involvement
in Southeast Asia-and to a degree, the security of
all of east Asia-hinged on a closer relationship
with Japan. This realization led to the establish-
ment of annual Indo-Japanese discussions of eco-
nomic-political questions in which they shared a
common interest. At the third session in 1968,
the Indians were more forthcoming than pre-
viously in indicating their desire to strengthen
relations with eastern Asia, both to achieve
greater economic cooperation and as a measure of
security against Communist China.
On an unofficial level, Indo-Japanese eco-
nomic talks in New Delhi last November repre-
sented an important positive development in In-
dia's growing trade relationship with Japan, mark-
ing the encouraging start of a meaningful eco-
nomic dialogue.
The Indian foreign minister has made two
trips to Southeast Asia in recent years, during
which there was some talk of regional coopera-
tion. Prime Minister Indira Gandhi's visit in
April-May 1968 to Malaysia, Singapore, Australia,
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and New Zealand was the first by an Indian prime
minister to those countries, except for Nehru's
brief stopover in Singapore in 1955. Nehru's visits
to other countries in the region were connected
with activities of the nonaligned bloc, and were
aimed at enlisting Asian support for a "third
force" grouping of uncommitted, anticolonial
nations to balance the Communist and Western
blocs. Nehru's successor, Prime Minister Shastri,
began to focus Indian attention on the area, but
during his brief tenure was able to visit only
Rangoon.
Mrs. Gandhi's tour was primarily a goodwill
mission intended to foster a friendly view of India
and to manifest India's interest in expanding its
relations with the nations in the area. Notable
among the bland generalities that characterized
her speeches was the indication that India was
interested in participating in some form of broad
regional economic cooperation. She had no pre-
cisely defined machinery to propose and her re-
marks were typically lacking in clarity. The mes-
sage that came forth with considerable force,
however, was her concern for the security of
Southeast Asia. To deal with this problem, Mrs.
Gandhi offered her usual formula based on
nationalism, mutual economic help, and eco-
nomic strength.
By July, Indian officials were ready to solicit
a US reaction to their proposal for an expanded
role in Southeast Asia. At the first of projected
annual Indo-US talks, the Indians proposed that
they promote a regional group whose neutrality
and security would be guaranteed by an agree-
ment among all the major powers. External eco-
nomic assistance was considered vital, but they
felt it should be channeled through multilateral
organizations such as the Asian Development
Bank, although they did not rule out bilateral
arrangements. The Indian plan was lacking in
specifics but reflected New Delhi's traditional
aversion to military alliances and involvement in
military and political blocs. The Indians made it
equally clear, however, that they favored the con-
tinuation of a US presence, at least politically and
economically. On several occasions, the Soviets
have expressed disapproval of the formation of,
and Indian participation in, any institutionalized
cooperative arrangement in Southeast Asia other
than ECAFE, the UN's principal vehicle for eco-
nomic development in Asia. Nevertheless, the In-
dians appear hopeful that Moscow will not object,
and may even accede, to efforts aimed at curbing
China and promoting economic development in
Southeast Asia.
India's concentrated efforts in 1968 to map
out a new policy were climaxed in December by
an unusual conference of all India's envoys in the
Far East and Southeast Asia who were summoned
to New Delhi to evaluate current policies. It ap-
pears that the driving force behind this initiative,
and probably much of the recent effort to acti-
vate India's foreign policy, is the recently pro-
moted foreign secretary, T. N. Kaul. Kaul, an
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related to the Nehru family, has energetically and
persistently sought a mediatory role for India in
resolving the Vietnam conflict and has injected an
element of aggressiveness into the usually apa-
thetic Foreign Ministry.
No cohesive policy has yet emerged and it
appears that India's primary emphasis for the
present will be on cultivating a more favorable
image of India in the area. Indian officials can be
expected to increase their efforts for expanded
trade agreements and to work for the creation of
an atmosphere conducive to future multilateral
arrangements.
AREAS OF POTENTIAL EXPANSION
The potential for an expanded Indian role is
tightly circumscribed by the limits of India's re-
sources. India's one-million-man army-fourth
largest in the world-is committed to the defense
of its borders with Pakistan and China, and the
Indians are far from convinced they yet have the
ability to defend their own frontiers. Even if
Indian self-confidence continues to grow, do-
mestic political opposition makes it extremely
unlikely that India would agree to any alliance
that would require it to send sizable forces to
Southeast Asia or to run the implicit risk of
nuclear retaliation from China.
In terms of economic assistance, India has
little to offer. India's "massive aid" to Singapore
in 1967 consisted of one trainer aircraft and 80
ceremonial horses-the latter never arrived, re-
portedly because India subsequently indicated it
expected reimbursement. Among India's few gov-
ernment-to-government loans is a 100 million
rupee ($13.3 million) credit to Indonesia to fi-
nance the purchase of Indian goods, but such
credit arrangements will of necessity be extremely
few.
Far greater potential lies in trade and eco-
nomic collaboration. A major weakness in India's
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economic development has been its lack of suc-
cess in expanding exports, and Southeast Asia is
viewed as a promising market. India is particularly
interested in exporting manufactured
items-bicycles, flashlight batteries, tires, light
machine tools-and supplying capital equipment
for manufacturing plants and construction proj-
ects. Joint ventures are also favored.
In December, New Delhi signed its first trade
agreement with Thailand, and also sanctioned a
private Indian firm's project to establish a joint-
venture steel rerolling plant in Thailand using
Indian steel and technical expertise. An Indo-
Malaysian corporation recently began manu-
facturing steel furniture in Malaysia, and negotia-
tions are under way for joint enterprises to pro-
duce chemicals and electrical appliances such as
sewing machines and fans. Such products will,
however, meet stiff competition from preferred
Japanese consumer exports, which are rapidly
permeating Asian markets.
The exchange of technical assistance is a
more immediately feasible area of expansion. As a
member of the Colombo Plan since its inception
in 1950, India has made substantial contributions
to regional economic development through the
services of Indian experts and training facilities in
India. On a bilateral basis, India has agreed to
provide training for a large number of Malaysians
in agriculture, forestry, horticulture, accounting,
medicine, engineering and pharmacy, as well as in
Indian defense academies. After a ten-year hiatus,
Burma has resumed sending a few military offi-
cers to Indian military schools. Similar programs
of small dimensions will probably be extended to
other countries in the future.
India is a member of the Asian Development
Bank and plays a major role in ECAFE. It
welcomed the formation last December of a
Council of Asian Economic Ministers in the
ECAFE region for the purpose of adopting and
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implementing Asian economic projects and pro-
grams in the fields of intraregional investment,
payments arrangments, preferential trade ex-
changes, transportation, and communications.
There is growing favor in India, moreover, for
organizations with purely Asian membership.
Two modest advances in exclusively Asian
regional cooperation recently came to fruition in
India's agreement with six Southeast Asian coun-
tries to establish the Asian Coconut Community
to improve coconut production and marketing,
and in plans to set up a committee for coordina-
tion of offshore prospecting for mineral resources
in the Indian Ocean. There is no evidence that
India has sought membership in two other re-
cently formed regional groupings, the Asian and
Pacific Council or the association for Southeast
Asian Nations, which have political or military
implications.
HINDRANCES TO EXPANSION
A number of factors will significantly inhibit
India's efforts to expand its relations eastward.
Perhaps the most serious obstacle it must face is
opposition from within the Southeast Asian re-
gion, largely a result of the very real fear that
India's participation in regional affairs would lead
to Indian domination. Throughout Southeast
Asia, nationalist leaderships are alert to the slight-
est suggestions of "neocolonial" economic domi-
nation and maintain a vigilant guard against what
are regarded as excessive foreign inroads.
Indonesia is particularly wary of Indian am-
bitions. It views India's potential for wielding an
overbearing influence as a threat to what Djakarta
regards as its own rightful leadership role in
Southeast Asia. In addition, the continuing pres-
ence of Western forces in the area reduces the
urgency that Indonesia and others might feel to
establish alliances against Chinese expansionism.
Special Report - 7 -
Doubts among leaders in the area about
India's ability to contribute toward rather than be
a drain upon an Asian regional grouping are cen-
tered on their awareness of India's liabilities-a
population of 535 million expanding at about 13
million annually; a host of domestic economic
and political problems; the seemingly unresolv-
able Indo-Pakistani feud; and India's continued
involvement in other ; parts of the world as a
leader of the nonaligned. It is widely felt and
often expressed by these leaders that India ought
to put its own house in order before trying to
organize its neighbors'.
The presence of sizable ethnic Indian popu-
lations in various Southeast Asian countries has
generated strong anti-Indian feelings and presents
a potential irritant to closer bilateral relations. As
shopkeepers, moneylenders, and landowners,
overseas Indians have performed important serv-
ices, but by virtue of their occupations have fre-
quently obtained an economic stranglehold over
native populations. As an unskilled labor force,
they have tended to depress wages and have taken
jobs from local workers. In Singapore, Indians
constitute a large proportion of the unskilled and
semiskilled work force, and the approximately
25,000 Indians without Singaporean citizenship
face increasing difficulties in securing citizenship
and work permits. Deep-rooted prejudice against
India also exists in Burma, and Rangoon's dis-
criminatory measures against its large Indian mi-
nority since 1964 have not only contributed to
the exodus of some 156,000 Indians but have
caused strains in Indo-Burmese relations.
The failure of overseas Indians to integrate
themselves successfully into the culture of their
adopted countries has contributed to the general
disdain with which they are held by native in-
habitants. Indian visitors, diplomats, and jour-
nalists have also antagonized their hosts by a
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frequently arrogant and contemptuous attitude,
arising in some cases from the stigma of infe-
riority that Indians attach to the citizens of coun-
tries closely allied to the West.
The Japanese have been candid in their op-
!position to India's participation in regional eco-
nomic organizations, claiming that India is not a
part of "Asia" as they regard the term and would
constitute an added economic burden. At the
same time, a compelling motivation behind In-
dia's eastward initiatives is its desire to offset
rising Japanese commercial and cultural inroads in
the area, and a considerable degree of mutual
suspicion lies beneath the surface of cordial Indo-
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Japanese relations. The Japanese vigorously op-
posed Singapore's inviting India to participate as
an observer at the third Southeast Asian Minis-
terial Conference in Singapore in April 1968. In-
dia did not ._ittend the first two conferences in
1966 and 1907, but is inxious to attend the next
meeting scheduled for April 1969 in Bangkok.
Indian officials have not had much success in
convincing participants that India is not seeking
aid but, in fact, wants to offer the services of
English-speaking Indian technical personnel.
The Indian Government's adherence to
nonalignment does not necessarily preclude a
large Indian involvement in Southeast Asia. The
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ambiguity inherent in the nonalignment theme
provides enough flexibility to accommodate most
contingencies, probably even a fairly formal secu-
rity relationship if it does not include the major
powers. Nevertheless, there is still a strong emo-
tional attachment to the concept of nonalignment
in India, and were the government to move into a
closer relationship with a regional grouping domi-
nated by countries participating in an alliance
relationship with the US-Japan, South Korea,
Nationalist China, the Philippines, New Zealand,
and Australia-New Delhi would be subjected to
considerable domestic leftist criticism. Mrs.
Gandhi's Congress-dominated government will be
increasingly anxious to avoid such opprobrium as
the 1972 national elections draw nearer.
Mrs. Gandhi herself represents a negative
factor, for in her three years as prime minister she
has been extremely reluctant to promote any
major program in either domestic or external af-
fairs. Partially in emulation of her father's prac-
tice, she has acted as her own foreign minister
since August 1967. She has not, however, dupli-
cated her father's preoccupation with foreign pol-
icy during India's first 17 years of independence.
The resultant passivity deprives the government
of the impetus needed for pursuing broad policy
goals that are not motivated by immediate ex-
ternal necessity, such as major Communist suc-
cesses in Burma, or by widespread domestic polit-
ical pressure. It remains to be seen whether the
bureaucratic machinery, and particularly the For-
eign Ministry under Kaul's direction, will have
more success in translating ideas into practical
action.
OUTLOOK
India lacks the political power and influence
and the material resources to have a major impact
Special Report -9
on the course of events in Southeast Asia in the
near future. Nevertheless, the Indian Government
is increasingly evincing an interest in cooperating
to establish relative stability in the region-as a
means of serving India's interests in curbing
China's predatory ambitions, discouraging Com-
munist insurgent movements, and providing a
favorable climate for trade expansion.
Indian leaders believe that economic growth
plays a vital role in national development, and
they see economic cooperation as a particularly
appropriate means of bolstering Southeast Asia's
regional identity. New Delhi's hopes for major
advances in intraregional cooperation appear to
be premature, however, for the constituent coun-
tries are only gradually beginning to surmount the
barriers erected in colonial days when they were
more closely oriented toward their respective
metropolitan powers than toward each other. The
extended presence of foreign military forces is
likely to further delay cooperative efforts to pro-
tect vital common interests.
Undeniably, India is a weak nation on the
world power scale, but in the context of Asia,
India is a factor that cannot be ignored. Its stra-
tegic position on the Asian land mass, its vast
population and economic possibilities, and its
potential as an Asian counterbalance to China
attest to its importance. Despite intense internal
stresses and strains, India has retained its unity
and commitment to democracy during 21 years of
independence. Gradually, with considerable West-
ern encouragement, Indian leaders have awakened
to India's responsibility for promoting Asian sta-
bility, and now, in a very limited manner, they
are ready to begin.
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