With the change in diagnosis of threat came a change in prescription—to one that matched that of India. The US could strengthen free world security and these nonaligned countries, especially India, by focusing on development. It could help not by giving them military assistance, which a number of them did not want anyway, but by providing economic assistance.
Given the China-India competition, US ambassador to India and former senator John Sherman Cooper called for a re-evaluation of American aid policy toward India. Following up on a commitment to the White House, he sent an assessment arguing that India could demonstrate “the superior capacity of democracy in Asia for economic achievement for the people.” The embassy proposed a five-year $500 million economic and $300 million food assistance package to ensure India’s success and to show that the US did not just rely on a military approach.5 India’s ambitious $14.7 billion second five-year plan, which envisioned more than double the expenditure of the first five-year plan, left the country in need of food assistance and with a critical foreign exchange gap of $1.7 billion.6 The plan, which began in spring 1956, offered the US an opportunity to assist India. Subsequently, a State Department task force established by Dulles suggested a $75 million annual aid package for India for five years, as well as $300 million of food aid via the new Food for Peace, or PL-480, program.
A key challenge remained: convincing Congress. Within the administration, advocates like Dulles wanted the US to move toward a more flexible and imaginative aid policy. Skeptics like Treasury Secretary George Humphrey, however, cautioned that there was little appetite on Capitol Hill for long-term assistance, especially for India. Representative Robert Byrd (D-WV) indeed predicted a “sufficiently hard time” for appropriating even a one-year commitment for the country through Congress.7
In spring 1956 hearings on the administration’s foreign assistance request, officials tried to convince members of Congress that it was crucial to aid India. They highlighted for various committees the significance of the demonstrative effect of its success vis-à-vis China. One official, for example, stated, “The people of Asia are watching the show windows of Communist China and India.… It is in the interests of the free world that India provide the more genuinely successful example.”8 And India, officials argued, would not succeed without American aid. If India failed, like Nationalist China had before it, all of Asia would likely fall to communism. Thus, Dulles, Cooper, and others asserted that the US had an interest in preventing Indian failure and even ensuring an Indian victory versus China.
Officials and advocates highlighted India’s achievements, adding that American aid had already had an impact. They noted that India’s progress had been modest, but nonetheless remarkable. Dulles also assured members of Congress that Nehru was “fighting the Communists very hard in India” and trying to “avoid being absorbed into the Communist bloc.” Other officials played up Chinese and Soviet economic engagement with India.9 Eisenhower, on his part, publicly warned of the communists “falsely pretend[ing]” that they offered the most effective economic solution to leaders of newly independent countries under pressure to deliver. He argued for aiding these nations that were vulnerable to communist “subversion” or “blandishment,” stressing, “it is far less costly to sustain freedom than to recover it when lost.”10
There were some congressional supporters for aid to India. Senator Hubert Humphrey (D-MN) argued for more aid to India because it was “trying to make its economy work in competition with that Red Chinese outfit.” Senator Edward John Thye (R-MN) was concerned that the US would lose India. Representative Marguerite Church (R-IL) did not want to cut aid to India but said that Washington should demand that Delhi be more sensitive to US interests.11 Others like Senator J. William Fulbright (D-AK), Senator Theodore F. Green (D-RI), and Representative Lawrence H. Smith (R-WI) thought that, overall, the administration was not doing enough in the face of the communist economic offensive and, indeed, was still too focused on military rather than economic aid.12
Advocates for aid had their work cut out for them. Some key senators like Styles Bridges (R-NH), Spessard Holland (D-FL), and Charles E. Potter (R-MI) continued to have problems with India’s actions that irritated the US, and especially its nonalignment.13 There also continued to be strong opposition from those like Representative Byrd, who considered Nehru a “menace” and Representative E. Ross Adair (R-IN), who complained about anti-American sentiments in the Indian press. And some American business leaders testified that aid to India was wasted because India was “flirting” with the Chinese.14
With some members of Congress still talking about cutting a single-year package to India, the administration put any thoughts of increasing that aid or putting it on a multiyear basis on the back burner. Instead, it was relieved that the single-year aid package for India emerged from Congress only $5 million less than the $70 million request, with an additional $10 million in technical assistance. In August 1956, the two countries also agreed to a three-year $360 million PL-480 package.15
Ahead of Nehru’s December 1956 visit to the US, the re-examination of American aid policy continued. An interagency assessment linked the “reasonable” success of India’s second five-year plan and the health of its democracy.16 From Delhi, the embassy, led by Cooper, warned of Indian leaders giving up on building a “democratic Asian counterpoise to Red China.” And timing was crucial—if India did not progress economically as a democracy while Nehru was alive, a generation of “more Asia-for-Asian-minded” leaders would be more likely to follow an authoritarian path to keep up with China.
Officials, however, did not just highlight the dangers, but also the opportunity. They argued that the US and India were standing at “an open gate [rather] than at [a] crossroads.” India’s need for aid gave the US an opportunity. Delhi would likely see the US as a more attractive option to meet these needs for a few reasons: India’s changing view of the Soviet Union, which had lost some of its luster because of its October–November 1956 crackdown against Hungarian protesters; India’s desire to reduce its dependence on Britain and the Commonwealth; and India’s “uneasy political, social and economic rivalry with Red China.” The mission in Delhi even expected India to alter its external policies to facilitate its internal development—after all, “India’s foreign policy [was] to a large extent conditioned on India’s need and determination to progress economically as rapidly as possible.”17
Eisenhower expected the visiting prime minister’s primary aim to be smoothing the way for assistance. The president thought that the US should give India a “substantial” loan package in the $500 million range,18 but Eisenhower heeded Dulles’s warning about making any concrete commitments.19 Simultaneously, he did not want to appear to be “too cool.”20 Thus, when they met in December 1956, he told Nehru that the US would give “every possible consideration” to an Indian request for assistance. This impressed Nehru, who noted that the president “seemed to be greatly interested” in India’s development plans.21
A few months before, in August, Nehru had detected a change for the better in the West’s attitude toward India. He traced it to the “feeling that with China having gone Communist, India offered some hope to stem the tide of Communism in Asia.”22 Delhi welcomed American assistance. It had become even more critical because of the second five-year plan’s foreign exchange needs. Since the Second World War, India had received over half a billion dollars in food and economic assistance (in grants and loans) from the US. Now India needed more.
Thus, unlike during his 1949 visit, on his 1956 trip Nehru was not as bashful about making India’s needs known. House Foreign Affairs Committee chairman James Prioleau Richards (D-SC) and members Adair (R-IN) and Armistead I. Selden Jr. (D-AL), as well as Appropriations Committee members in the House (Henderson L. Lanham, D-GA) and Senate (Allen J. Ellender, D-LA) had questioned why India did not deign to ask for or acknowledge American aid publicly.23 Thus, even before his visit, Nehru expressed appreciation in parliament for American aid.24 In Washington, he reiterated