Aummw my 1 4 1960 r INITIALS 0 1 Was on nr an an In cue I Mr W I Car 6331 1M URGENT 1 5 II- 115 fawn ag' REQUESTED um um RETURN QQHHEHT PER couvensnlou he YOUR INFORMATION PREPARE REPLY INITIAL FOR CLEARANCE SEE HE acrlun smnnunE RE ARKS 0R ADDITIONAL ROUTING on man Attached for your information is a copy of a Memorandtm of Conversation concerning the British approach on July 12 conceming problems raised by Indian Government attempts to obtain nuclear power reactors without safeguards It Will be necessary to obtain a Departmentel posi- tiOn on this subject prior to further discussions with the AEC on a coordinated position to be taken in further discussions with the British I suggest a meeting be set-up early next week to discuss this problem and will be in touch with you as to the time and place 47 noon GNU MG FROM luau no oluuln onl Melvin L ManfullW 14216 PMNE no summit 31461 l DECLASSIFIED - I aLuthority M o qub70 1' IQU 7 1 45 3 0 STATE Won 61 4 9 345 Memorandum of Conversation cuts 111 12 SUBJECT Atmnic Energy Safeguards Pmblane Raised by Activities of Indie United Kingdom united States PARTICIPANTS The Viscomt Hood Sinister Hr Philip J Farley - Mr D i Counselor Mr Robert E Winfree Mr Charles Wiggin First Secretary Hr Melvin L Henfull AB Dr John Gaunt hippie Energy Attache Hr Hatter AEG Dr Dan replacement for Dr Gaunt Hr John Vinciguorra a Mr George Spiegal cor-15m - hr Kennedy 3136 n r 3- Hr Ludlow Hr Vinciguem UNP- cargo 50A - Er Bartlett lg 31 323Hr Brown Etihessy 1 0 de 5 JUL 1 51950 63 BM - Swihart New Delhi ED - Ruth Gold Enhassy Vienna for DELL uiseion gin-5% E l' The Viscount Hood called at his request and on instructions for a preliminary exchange of views concerning problems raised by attempts at the Indian lover-metal to obtain nuclear power reactors without safeguards Viscount Hood recalled previous informal notification to the Deth that Prime Minister Macmillan had made a personal appeal to Nehru on this subject during the recent someon wealth Conference Hr nominee had eeloed Nehru to accept safeguards in couneo-o tion with India's acquisition of reactors and had given Mr Nehru en mlanstory paper an this subject lb Nehru has replied by written memorandm explaining Indialo strong Opposition to bilateral or mm safeguards The major objections cited were the alleged discriminatory and morons character of safeguards While reiterating India's to accept a universal system cf safeguards the memorandm clearly reflected India's View that acceptance of safeguards would reflect adversely on it ternetionel prestige The memorandum stated that in the Indian View there should be no safeguards on nuclear plants equipnent or couponeute and on unprocessed Source material but merely an oral undertaldng that the latter would be used solely for peaceml the also indicated that Indie might consider sane form or limited safeguards to be applied to enriched materiel Viscount Hood stated that the Indian manor-ended was voluminous and that a copy would be supplied to the Department See note psgeh He continued that there was apparently no change in the Soviet attitude con- coming safeguards and in root the Soviets were on public record to the effect that they would not require safeguards for a nuclear power reactor supplied to India In addition despite UK representations the French attitude remained disappointing in that the French continued to be equivocal and to refuse to 3 3e gt cor - - - - 4 -- Authority AND 3 2 270 0mm -2 - commit thanuhelves concerning bilateral or liEl safeguards With respect to Indian intentions Viscount Hood stated that information received by the UK was conflicting and that press reports of Indian activities were probably inaccurate A cannon thread however was that the Indians sought a 300 thermal megawatt power station possibly two reactors of 150 each and that the Indian Government might ask for tenders during August A request for tenders 1would pose difficult problems for the domestically since the UK consortia mold desire to respond and would wish to know at the outset whether safeguards would be required These domestic pressures are expected to increase in View or the recent cut-hack in the UK dunestic nuclear power program Further the UK Government could mticipate an endear-so domestic reaction if British omsortis sore precluded from ampetiog' with the Soviets and the French to - businses especially in a oomonwealth count-w With regard to international aspects the UK was concerned over the possibility of mm Soviet penetration of the Indian economy and omsidemd that serious thought should be giran to sow decision widen would enable the Soviets to be the sole supplier in the Indian nuclear power field Therefore the UK desired the closest consultations with the Mted states md if possible close collaboration in a Jodnt approach to the problem He added that while the immediate problem was perhaps most difficult for the UK since reports indicated that the Indians 1were seeking a reactor- i'ueled by natural uranium in a sense the Uhited States and the UK faced the similar problem in that the request for tenders night be sufficiently broad to interest united States commercial time With respect to sltemstive solutims to the problem the UK had cmsidered the 01 10me possibilities The US and the UK might stand firm on the pesent safeguards policies and insist on the application of safeguards to any transaction with India agree that in instances like the Indian case where significant political and economic considerations are involved so and ex firms should be' allowed to subunit tenders without requirixg safeguards attempt to develop a possible compromise solution between and above Viscount Hood marked that course above needed no elaboration With regard to he was confident that the 11 could obtain rm India assurances that the condiment and materials would be used for peaceful purposes only How- evor even though such assurances were obtained we would have to consider ems - inpeotonosrgenersl supply a reactor on this basis With respect to possible We solutions above the UK had explored the following possibilities 1 not to insist on the application of bilateral at the outset if India provides assurances that she would accept 1m safeguards when finally developed and approved by the Agency Homer in View 01' the tone of the Indian memorandm there was little hope that India would agree to such an modernizing mm 3 mucous-rm can 0 DECLASSIFIED 3 2 develop some form of reciprocal safeguards arrangement on a bilateral basis in which the HE would agree to accept inspection of the plutonitm or other special nuclear materials obtained iron the irradiated fuel elements supplied to India or set aside an egtdvalant amount of special nuclear material under safeguards earmarlmd for peaceful uses only The IE considered it highly mlikely that such a proposal would prove acceptable to the Indians The UK believed there was little utility in to develop ingenious safeguards arrmgements vanish might satisi'y the Indians Rather the '03 and UK should address the basic problm as to whether adherence to the present safe- - guards position does not inevitably lead to an impasse We should consider whether continued adherence to safeguards is merely a holding Operation 11131688 we see some hope for progress towards a disarmament agreement ' The Indian case points up the issue as to whether the risks in adhering to a safeguards policy are not outweighed by the political and econmis advantages or denying the Soviets an opportunity rather to penetrate the Indian eschew - Viscount Hood reiterated that the above constituted the UK analysis of the problem and stated that he was not seeking a de nitive US response at the current meeting However he would'uelcme preliminary 118 views particularly on the alternatives outlines above Br Farley observed that Viscount Hood had made a lucid presentation of the problem The US fully recognised the con icts of interest for both presented by the Indian activities The timing could not be worse from our view- point since whether by chance or design the Indian request for tendon might come out Just prior to the Fourth General conference of the mm at which definitive action is hoped on the Agency safeguards system He agreed that prestige considerations constitute a large element in the Indian position but pointed to the difficulties in finding means to satisfy Indian sensibilities in this regard A crucial consideration is the anomt and degree of support we can expect at the IAEE Fourth General conference for Agency safeguards A clear consensus in favor or the Agency safeguards would mdoubtedly exert pressure on the Indians In addition prospects for the melee test suspension negotiations at Gui-In and for eventual disarmament agreement however faint should be taken into account The US believes we have so coach at stake in the forthcoming safe- gnaw discussions at Vienna that we not sacrifice seieguards until we are absolutely sure that no other course of action is open With regard to the possible canpranise solutions mentioned above tr Farley said we had also considered some tom of reciprocal safeguards arrangements with India but tended to agree that the Indians would be unlikely to accept an arrange- ment satisfactory to us The US is also cmsidering the possibility oi mating an offer at the General confer-aloe to place certain Us facilities under Agency safeguards However such an offer it made would have to be a modest one in View of the organisation of the US energy program and would there- fore be susceptible to attack by the Indians mule we realise that in the Indian View use safeguards are even less desirable than bilateral safeguards the US continued to believe that the main focus oi effort to counter the Indian position should be at the Fourth General conference He noted in this cmagtion animus mat-map A' nu can DECLASSIFIED Authority mm 3 LE 670 5 commend-m that extensive consultations had already been held with the UK and Canada on coordinated course or action to obtain favorable action on safeguards document at the General Gonference Hr Kratser eeid he had nothing to add to Mr Ferley'e cements Farley concluded by stating that other areas or the Department were intimately- concerned with this general probleun'end that after appropriate discus- sic-es in the Deperhnent he would inform Viscount Hood of our views In the interim he hoped that members of the British Eubeesy staff would be available for informal consultations should this prove desirable to which Viscount Hood agreed- I NOTE Subsecpienth hr Wiggin in mn ng copy of the Indian available requested that it receive limited distribution in the Bepertztent and eventually retnrned to the British Embassy Booed-e of the privileged character of the Macmillan-Nehru emhenge the British did not Irish the existence of the memorande to become generally Imam and in particular wiehed to avoid information getting back to the Indiana that copy or the Indian memorandum had been given to the United Staten u-r an 5 2 a q_ INFORMAEION cow 9                     National Security Archive    Suite 701  Gelman Library  The George Washington University    2130 H Street  NW  Washington  D C  20037    Phone  202 994‐7000  Fax  202 994‐7005  nsarchiv@gwu edu