India and Britain’s First Application to Join the European Community,1961–1963

A Direct Channel with Brussels

Four days before the United Kingdom made a formal announcement to join the European Community (31 July 1961), Nehru deemed it worthwhile to combine the functions of the Indian ambassador to Belgium (who was leaving the post in December 1961) with an ambassador to the European Common Market (Nehru, 1961b, p. 583). New Delhi regarded a direct, institutional link with the nascent Community—the world’s largest importer/exporter and the ‘fastest growing economic unit’ in the Western world (Lall et al., 1984, p. x)—as imperative.

Within a little over 6 weeks after the British announcement, the Government of India (GoI) decided on 4 September 1961 to transfer the London-based office of the Commissioner-General for Economic Affairs in Europe to Brussels who was entrusted with the responsibilities of managing India’s economic relations with Western Europe. Two weeks later, India made a formal request (19 September) to establish diplomatic relations. After Brussels accepted the request in November, New Delhi established its Mission to the Community in January 1962 and became the first developing country to accredit an ambassador to EEC. While presenting his credentials (2 March 1962), Ambassador Krishen Behari Lall expressed the hope that Indian problems would be viewed by the Community to ‘facilitate adjustments and adaptations directed towards securing continuing expansion in trade exchanges’ between the Community and developing countries including India (Lall, 1962a, p. 57).

The Thorneycroft Visit

Civil Aviation Minister Peter Thorneycroft arrived in New Delhi (12–14 July 1961) to ‘sell’ the British decision to apply for membership of the Common Market and not for having real discussions about the advantages and disadvantages (Camps, 1964, p. 343). On the first day, the visitor told the Indian delegation that British membership would lead to an expansion of Indian trade with the Common Market since British trade with the Six would register a notable increase. New Delhi responded that whatever may be the long-term effects of the arrangement, it was obvious that India’s trade with the UK would be immediately adversely affected (TOI, 1961a, p. 3).

The British delegation assured New Delhi that it could count on London’s utmost consideration and assistance, consistent with its own interest in ‘softening the blow’ of British membership. The Indian side stressed that in the absence of any assurances, India’s exports would suffer grievously, which would, in turn, affect on-going development efforts (TOI, 1961b, p. 3).

Nehru told Thorneycroft that the development plans of many underdeveloped Commonwealth countries were based on certain assumptions in regard to export trade and foreign exchange earnings and the possibility of continued economic assistance from Britain, at any rate in the first few years. Sudden financial upsets, he felt, would inevitably lead to the redrawing of and delays in development plans as well as uncertainties like timely repayment of credits (Nehru, 1961a, pp. 585–586). ¹ The British minister assured his hosts that Indian interests would be ‘kept fully in mind’ in any negotiations for British entry into the Common Market (Ministry of External Affairs, 1961, pp. 207–208).

The British Announcement

The British decision on 31 July 1961 to apply for membership of the Community came in the midst of an acute foreign exchange crisis and chronic trade deficits, which had to be financed by large-scale withdrawals from the foreign exchange reserves accumulated during the Second World War and foreign aid. India’s modest surplus of ₹50 million (US$10 million) in 1950 with the Six had been transformed to a trade deficit of approximately ₹1,350 million (US$281 million) in 1960. This deficit was thrice the value of Indian exports to the Community. No other country had a deficit of that order with the Community. EEC-6 purchased one-fourth of what Britain did (Shah, 1962, col. 10310). Stringent import controls had also to be imposed which, by reducing imports to the bare essentials, had created a widespread under-utilisation of the available industrial capacity (Singh, 1963, p. 266).

In the wake of the British application, New Delhi’s two primary interests were to safeguard future trade with the British market and use the opportunity to forge closer relations with the emerging market in Continental Europe (Lall, 1983, p. 132).

On 9 August 1961, the British government formally requested the Community to open negotiations, the success of which would depend on the solution of three main problems: that of the Commonwealth, that of British agriculture and that of the European Free Trade Area (EFTA).

Two days later, Finance Minister Morarji Desai expressed deep concern about the ‘possible setback’ to its export trade, since India would lose the Imperial Preferences and continue to run a heavy adverse imbalance with the Six since almost all exports were subject to fairly high tariffs and other taxes in the Community (Desai, 1961a, pp. 209–211). Indian efforts to increase exports to the Common Market, he argued, could not succeed without a substantial liberalisation of EEC tariff and commercial policies. Suitable transitional arrangements, he hoped, would be made so that preferential benefits would cease gradually (Desai, 1961a, p. 209).

The Ministry of Commerce and Industry calculated that India was likely to lose roughly one-fifth of its exports trade with the United Kingdom should it join the Common Market without securing any safeguards from the Six or a total of ₹400 million. While tea and jute goods were likely to be affected only marginally, the loss in respect of textile was projected to be roughly 50%.

The Lall Memorandum, 24 May 1962

Negotiations on the terms of membership commenced in Brussels on 8 November 1961. Eleven weeks after the presentation of his credentials, Ambassador Lall submitted a cogent and well-researched Memorandum of 42 paragraphs to the EEC Commission and the Six on 24 May 1962 (Rangnekar 1963, pp. 211–224). Prepared by the Indian Mission in Brussels, the Memorandum was a well-reasoned articulation of key Indian concerns about the British application to join EEC.

The harmonisation of commercial and economic policies, the Memorandum argued, would ‘inevitably place in jeopardy’ development efforts of the world’s most populous democracy. For many decades, the UK had been India’s ‘largest single market’, accounting from ‘a fourth to a third’ of India’s aggregate export earnings (para 16). The Six accounted for a meagre 7% of total Indian exports of US$363 million in 1960 (paras 17 and 20). This was primarily because Indian exports to the Community faced high tariffs, internal taxes and the discriminatory application of quota restrictions (para 21). The introduction of a Common External Tariff (CET) would exacerbate India’s trading problems, lead to a substantial increase in tariff rates for tea—a commodity of great importance—and result in certain tropical products attracting high duties (para 22). British entry in the Common Market would extend CET to the UK, which, in turn, would affect over 90% of Indian sales to the UK (para 26).

The low wage structure in India, the Memo argued, was ‘a reflection of the lower level of productivity which actually result in higher cost per unit’ (para 30) and was not likely to lead to market disruption in Western Europe. In conclusion, the Lall Memorandum proposed four solutions to the Six to ameliorate its export problems: (a) CET for primary products, semi-processed and some processed products, which enjoy quota-free entry into the UK, should be reduced to zero (para 37); (b) where it is not possible to apply a zero tariff for the Community as a whole, goods originating from India should continue to enter duty-free into the British market (para 38); (c) deep cuts in CET on items of special interest to India might be considered (para 39); and (d) where the expansion of facilities in the whole of the enlarged Community involved adjustments in India’s existing rights and outlets in the UK, the period of transition should be sufficiently long to facilitate a smooth adaptation of India’s exporting industries to the changing market (para 40).

The May 1962 Ministerial

A ministerial of the Six (29–30 May 1962), which was held less than a week after Lall had submitted his Memorandum, was unable to either study the export problems of the three South Asian Commonwealth countries. At the Ministerial, India was critical of British proposals of gradually applying the CET to exports from India rather than their continuation with free entry to Britain. On cotton textiles–the most important export item–Britain had proposed applying 30% of CET (i.e. 18%) when it joined the Community. A second alignment of 30% would follow, if examination of the statistics for a 12 months’ period following the first move showed that trade had not been damaged. The final application of CET would be made only when it was proven that the volume and flow of trade continued to be satisfactory (The Times, 1962a, p. 11). Lall termed these arrangements to be ‘most disappointing’ since they did not provide ‘a satisfactory safeguard’ for Indian trade (Lall, 1962b, p. 5 cited in Gilroy, 1962).

The Reaction of the Six

The Six found the demands made in Lall’s Memorandum to be ‘unacceptable’. India’s problems, they were convinced, could not be solved by duty-free entry into the British market for all its exports (European Commission, 1981, p. 1). The Six did not relent in their insistence on the application of the Community’s tariff across the board to India’s representations; the negotiators tried to incorporate some elements of a progressive solution on the partial and/or complete suspension of duties on Indian exports in the package of the terms for Britain’s accession.

The Six had, inter alia, reached an agreement that the enlarged Community would negotiate comprehensive trade agreements with India, Pakistan and Ceylon at the latest by the end of 1966 with the objective of developing mutual trade in order maintain and, as much as possible, increase their foreign currency receipts and in general facilitating the realisation of development plans (Lall et al., 1984, p. xiii). The Six had proposed that these agreements should be preceded by special arrangements during a reasonably short period (Ducci, 1962). Until that date, there should be a transitional regime.

These proposals were seen as an important step that the Six had taken for the first time to tackle India’s problems. It reflected the implicit willingness of the Six to accept some responsibility for the development of underdeveloped countries like India and tackle India’s problems in a more constructive way.

Duncan Sandy’s Visit, June 1962

As British negotiations with the Community progressed, the British Government sent Secretary for Commonwealth Affairs Duncan Sandys to India (17–19 June 1962). New Delhi clarified that it considered the British proposals to the Six to be inadequate on two counts: (a) to safeguard, as far as possible, its existing pattern of trade with Britain and not merely for the transitional period and (b) to secure adequate guarantees for the expansion of its trade with the enlarged Community. Indian Ministers told Sandys that they would like to be assured of certain minimum safeguards for its trade with the enlarged Community on a long-term basis.

After discussions with Sandys, GoI prepared a shorter Memorandum to be submitted to the Six, which, among others, proposed the extension of existing trade arrangements between India and Britain from 1966 to 1970 after which common tariffs would become fully operational (TOI, 1962a, p. 1).

Desai’s Trip to Europe

During his 3-week trip to seven European countries in July 1962, Desai also directly presented India’s case and thinking to the Six. In his discussions with senior members of the EEC Commission and Belgian Ministers on 6 July 1962, Desai stated that India accepted that the CET should be applied by the end of the transitional phase (1970); that India was prepared to make voluntary restrictions on exports; that the proposed trade agreement with the enlarged Community should not necessarily be based on duty-free entry of goods into the UK; and that for some commodities, a low tariff might be reasonable and for others like jute goods and tea, free entry would be appropriate. India’s greatest concern was that transitional arrangements did not decrease its opportunities for export earnings (The Times, 1962c, p. 7). On his return, Desai stated that he had received assurances from the Six that no injury would be caused to the interests of India and other developing countries and that arrangements would be evolved to safeguard them (Desai, 1962, p. 1).

At the end of July 1962, K. B. Lall expressed strong concerns that the proposals drawn up by British and Commission officials contained ‘certain constructive solutions’ but did not take adequate account of the 24 May Memorandum. While the progressive application of CET by Britain on goods imported from the South Asian Commonwealth countries had been specified, ‘any measures which would benefit Indian trade were left in the air’ (Lall, 1962c, 1962d).

A Comprehensive Trade Agreement with India

After a 5 hour discussion on 2 August 1962, the Six reached agreement that the EEC should sign hour comprehensive agreements with India, Pakistan and Ceylon by 1 January 1967 to cover tariff and quota problems with the objective to maintain and, if possible, to increase the present level of trade receipts of the three countries concerned. This was sought to be achieved by unilateral tariff measures, trade arrangements, the cancelling of quarters or the broadening of quota lists (which would be subject to a safeguard clause), export measures and agreements or limitation. These agreements would be valid for several years and could be renewed. During the transitional period, the alignment of preferences according to India and Pakistan, special measures would be taken for jute and cotton textiles (The Times, 1962d). Moreover, the ‘Seven’ further agreed that if there was a deterioration in the export trade of the three South Asian countries, then the Community could take steps such as the grant of duty-free quarters to try to remedy the situation (TOI, 1962b, p. 1). Nehru expressed dissatisfaction with the outcome of these negotiations but hoped that the Six would still offer suitable terms to assist India’s export trade on which its economic development and plans depended (Nehru, 1962f, 27 August, p. 9).

Commonwealth Prime Ministers Conference, 1962

At the Commonwealth Prime Ministers Conference (10–19 September 1962), to discuss the package worked out at the negotiations. Nehru spoke ‘most eloquently’ about the configuration of world politics and the impact of EEC’s enlargement on this configuration. Lall got ‘somewhat worried, somewhat impatient’ at this prolonged expose since ‘too much time was being taken on a subject with which his other colleagues were not at that moment too deeply concerned’. But then Nehru began to refer to apprehensions about the adverse consequences on India’s internal trade and external relations (Lall, 1983, p. 137; Nehru, 1962h, pp. 397–398). The proposals were based on the old ‘colonial concept’. The problem, he argued, could only be solved by ‘extending duty-free treatment to as wide a list of items as possible and to lower the tariffs on the rest’. The Commonwealth, he asserted, was unlikely to survive unless ‘a radical change’ was made in the existing proposals (Nehru, 1962h, p. 399).

On 14 September, Nehru expressed his disappointment that the June 1962 proposals that the UK had agreed with EEC were ‘vague’ and unsatisfactory. He urged the maintenance of the status quo in the British market till the proposed agreements with the Community had been worked out. If that was not done, he felt that the proposed trade agreements with the Community would ‘be prejudiced and their scope narrowed’ (Nehru, 1962i, p. 1).

Even though Nehru was participating in the Commonwealth Prime Ministers conference at a time when he was not in good health, he nevertheless displayed a broad grasp, ‘a balanced view he had, how moderately, how convincingly he put it forward, respecting the British right to take their own decision…the implications of the decision in terms of the Commonwealth, in terms of individual countries of what Britain was intending to do’ (Lall, 1983, pp. 138–139).

October 1962 Ministerial

The EEC-6 ministerial of October 1962 assured Britain’s chief negotiator Edward Heath that negotiations for comprehensive trade agreements with India and Pakistan should commence immediately after Britain’s entry, and anyway within 3 months. It, however, turned down the British request that CET, on their textile and manufactured exports to Britain, would not be suspended (The Times, 1962f, p. 7, 1962g, p. 9). However, in response to the British request for nil tariffs on nine items of interest to India and Pakistan (e.g., East Indian Kips [partly tanned hides], heavy jute goods and bags, hand-knotted carpets, coir mats and matting, etc.), the Community was only willing to offer partial suspension of the tariff until completion of the trade agreements largely because each of them was of special interest to one member or other of the Six which prevented them from collectively reducing the tariff (Beaton, 1962, p. 9).

Industrialising Asian members of the Commonwealth, Lall argued on 20 November 1962, confronted a ‘double-distilled discrimination’ against their products if Britain joined the Community. The Six’s tariff wall was dubbed as ‘the road to starvation for Asia hungry millions’ (Lall, 1962e, p. 8).

India and the French Veto

Vetoing the British application for membership on 14 January 1963, de Gaulle stated that only Britain could say whether she would join the Common Market and whether she was prepared to accept a continental tariff, abandon Commonwealth preferences and cease to claim privileges for its farmers (de Gaulle, 1963, 14 January).

After the official announcement on the breakdown of British accession negotiations on 29 January, Nehru acknowledged that de Gaulle’s veto had created ‘a difficult situation’ in Western Europe (Nehru, 1963, p. 575). The Indian Finance Ministry viewed it with a ‘great deal of sympathy’. Britain, it acknowledged, had done ‘a great deal’ to protect Indian interests. Given India’s huge trade deficit with Western Europe, New Delhi needed to argue strongly with the Six for a more favourable treatment to Indian exports through direct bilateral negotiations (Ministry of Finance, 1963, p. 1).

Subsequently, giving a diplomatic interpretation of the veto, Lall argued that French negotiators were receptive to the Indian demands for preferential treatment, but felt that the time was not right for a settlement which would foster Indian development. The veto, he felt, was firmly related to the French view that the UK was not ready to weaken its Commonwealth links and commit itself to full membership obligations (Lall, 1996, pp. 213–256 cited in Wilkes, 1997).

For the Indian Press, de Gaulle’s veto reflected the French assertion of its ‘hegemony over the Community in an almost brutal manner’ which caused deep resentment among the other member states (Jain, 1963b, p. 8). The French President was interested in preserving ‘the existing inward-looking character’ of the Common Market (Jain, G. 1963a, p. 6). Britain confronted a veto of ‘one misguided man who seems to think that France is Europe and he is France’ (Sandys, 1963, p. 1).

Little Headway

In the months following the French veto, India continued to press the Community to open concrete bilateral talks for a commercial cooperation agreement; Lall devoted himself to try to deepen and widen India’s economic relations with the Six and EFTA. He was engaged in intense probing and holding talks in Paris, The Netherlands and Bonn in an effort to increase trade with these countries, but with little headway because the Six were ‘too deeply immersed in their own internal squabbles to be either concerned or willing to give thought to India’s difficulties’ (Lall, 1963, p. 8).

India’s problems had apparently lost their urgency now that the question of Britain’s entry into the Common Market had itself been put off indefinitely. Though Commission President Walter Hallstein expressed the hope, in an address to the European Assembly at Strasbourg, that despite the interruption of negotiations with the UK, the basic idea of an early conclusion of a trade agreement with India, Pakistan and Ceylon would not pass into oblivion (Hallstein, 1963a, p. 22). Subsequently, he seemed a bit less optimistic when expressed the hope that ‘some at least of the measures during the British negotiations may still be able to bear fruit’ (Hallstein, 1963b, pp. 859–860).

In the wake of the suspension of negotiations, the Six were in no position to make any commitments to India. There was nevertheless a common recognition that India’s problems needed to be solved with an enlarged Community. However, apparently because of their own difficulties in defining their external commercial policies, they were not giving India as urgent consideration as its situation demanded.

Indian Aide-Memoire, April 1963

With the collapse of negotiations on British entry, India continued to press the Community to open concrete bilateral talks for a commercial cooperation agreement. On 23 April 1963, India submitted an aide-memoire to the Commission which urged that given its high trade deficits, the Community should ‘step by step’ adopt and implement practical measures for tariff reductions/suspensions, lifting of quantity restrictions, without awaiting the conclusion of an agreement (Daily Bulletin, 1963). However, the European Commission’s proposals only envisaged ‘exploratory talks’ rather than negotiations and were willing to consider a ‘commercial arrangement’ rather than a trade agreement (Subhan, 1963, pp. 237–238). Several member states had reservations on granting unilateral reductions or suspensions, for example, Belgium for carpets, Italy for East India Kips, etc. Since the Council of Ministers also had not yet debated fundamental issues relating to the contents and objectives of the proposed talks with India, it was unlikely to begin serious deliberations on the subject. Member states tended to prefer the solution proposed by India, namely the granting of certain immediate unilateral concessions by EEC outside of bilateral negotiations.

Four months after the French veto, Minister of International Trade Manubhai Shah met Jean Ray, Commissioner in charge of External Relations, in Brussels. The EEC Commission reaffirmed its ‘willingness to pursue efforts to promote economic co-operation between India and the EEC’ (European Economic Community, 1963). The Commission communique reaffirmed that what had been agreed on the question of nil tariffs on products from the developing countries should be implemented and made the basis for further talks between India and the Community towards a comprehensive trade agreement (Shah, 1963, p. 7).

Lobbying the European Parliament

At a time when India rarely figured in debates in the WEU Assembly as the European Parliament was known at the time, K. B. Lall displayed considerable foresight in trying to win the sympathies of the European Parliament by stressing India’s democratic credentials and proposing that the European Parliament send a representative delegation to India. His impression was that ‘if the parliamentarians were impressed with the democratic configuration of the Indian polity they might feel more interested in agitating for deeper economic relations’ with India (Lall, 1983, p. 142).

In 1962, the first-ever delegation of the European Parliament met Indian leaders and went around the country. On their return, the delegation emphasised the importance of ‘finding constructive solutions to Indian difficulties’ (Lall et al., 1984, p. xiv). It presented a report which recommended that the European Commission should take ‘urgent steps’ to explore the possibilities of deepening relations and the suggestions made by the Indian authorities in regard to modifications of a CET and perhaps the conclusion of an agreement. In the debate that took place in the European Parliament on the report, Jean Rey stated that he would try his best to see that India’s problems were studied. He was not quite sure whether all of the problems would be resolved. He, however, assured the European Parliament that every effort would be made to widen and deepen economic relations with India (Lall, 1983, p. 142). The European Parliament unanimously resolved to invite the Commission to pursue and intensify contact with Indian representatives in order to prepare for meaningful bilateral negotiations (Lall et al., 1984, p. xiv).

The Indian Parliament

The Indian Parliament evinced keen interest in the British application to join the European Community. Initially, Finance Minister Desai did not favour a discussion on the British announcement because he did not wish to jeopardise delicate negotiations which were underway between the Six and the UK, but he subsequently relented. Nearly 2 weeks after the British application to join EEC, he made a statement in the Lok Sabha on 11 August 1961.

In the debate in the Rajya Sabha on 5 September 1961, Bhupesh Gupta (Communist Party of India) depicted the Common Market as ‘an alliance of international millionaire monopoly concerns’ and ‘an economic and political arm of the NATO alliance’ (Gupta, 1961, col. 3236). H. N. Kunzru expressed concerns about the adverse impact on cotton textile exports and felt that British membership of the Common Market would weaken India’s bargaining position regarding the prices of raw materials (Kunzru, 1961, cols. 3256, 3259). Jaswant Singh (Congress (O)) maintained that India had to accept the fact that ‘we have to diversify our trade and we cannot blame any country for taking certain steps in their own interest’ (Singh, 1961, col. 3265). In a more balanced approach, Sudhir Ghosh (Congress) argued that India should neither claim any ‘special privileges of preferential treatment of any sort’ nor should the Common Market be presumed to be ‘necessarily a bad thing’ (Ghosh, 1961, col. 3267). At the conclusion of the debate, Desai remarked that India did not ‘doubt the bona fides’ of the United Kingdom. But ‘whatever we want them [the Six] to do, it is not possible for the United Kingdom to do… [the UK is] trying to do all that they can to see that our interests are safeguarded as far as possible. But if they are not able to do so, and we have got the meet the difficult situation’ (Desai, 1961b, cols. 3274, 3279).

On 8 September 1961, there was another lengthy discussion in the Lok Sabha on the Common Market. Welcoming the establishment of the Common Market, Ashoka Mehta (Praja Socialist Party) felt that the creation of economic institutions and the pooling of sovereignty imparted a new dynamism to the West European economy. Eventual British membership would create ‘some initial difficulties’, but India had to discover ‘ways and means of taking full advantage of this great and growing market in the world’ (Mehta, 1961, cols. 8120–8121, 8124). Much ahead of his time, he predicted that the Community would ultimately move towards some kind of political integration and ‘a third giant might emerge and perhaps help to maintain peace in the world’ (Mehta, 1961, cols. 8124, 8127). At the conclusion of the debate, Desai informed the House that he had conveyed to the UK that India was ‘very much disturbed’ by the British announcement to seek membership of EEC, and that whatever the UK does, it ‘must bear in mind our difficulties and try to solve them’. He stressed that a proper balance of trade must be observed. ‘We cannot go on always having a minus balance and ruining ourselves throughout. That we cannot do, and no amount of aid is going to benefit us’, he added (Desai, 1961c, cols. 8160, 8167).

The GoI was subjected to only ad hoc scrutiny and review in the Parliament on the first British application to join the European Community. Many of the questions very often revealed a lack of perspective and an ignorance of affairs.

North–South Relations

From the outset, Indian policy towards the European Community was framed in the broader context of North–South relations. However, a Third World perspective was altogether missing in Brussels since the signing of the Treaty of Rome in March 1957 since the Community’s exclusive focus was on the Francophone countries. New Delhi sought a more general solution by arguing that India’s trading problems would improve if efforts were made to persuade the international community in General Agreement on Tariffs and Trade (GATT) that imports from developing countries should enjoy preferential treatment. India, like other developing countries, began to look for multilateral remedies to overcome the adverse impact on exports as a result of the emergence of EEC.

Nehru was apprehensive that if the Common Market became an inward-looking regional grouping and transformed itself into a rich man’s club, the gap between the developed and developing countries would become wider (Jain, 2015, p. 11). In September 1962, Nehru stressed that it was essential ‘to speed the development of all developing countries and to ensure that none was confined to producing only raw materials’ (Nehru, 1962h).

Since the time he presented his credentials in March 1962, K. B. Lall frequently stressed that India’s problems and possibilities should be viewed in ‘a global perspective’. In fact, whenever Lall made references to non-discrimination—the cornerstone of GATT—many European friends used to ask him why he was ‘preaching heresy in that hall of orthodoxy’ (Lall, 1983, p. 143). The British accepted Lall’s argument that if and when Britain ‘again sought entry into the Community, since India would be enjoying preferential advantages in the British as also in other markets of the member states of the Community we would not be opposed British entry into the Community, thereby removing one of the problems London faced in 1962 if negotiations again resumed’ (Lall, 1983, p. 145).

K. B. Lall conceded that he did not succeed in convincing the Community institutions and officials that the processes of integration within the Community and of development cooperation at the global level were mutually reinforcing (Lall, 1990, p. 15). EEC was simply not equipped with the necessary tools to deal with the trade problems of the developing world until the early 1970s.

The Democracy Argument

K. B. Lall sought to persuade Six and the Community institutions to take a more sympathetic approach to Indian economic difficulties by stressing its democracy credentials. As the ‘world’s most populous democracy’, India, the 24 May Memorandum argued, was engaged in implementing ‘a broad-based and well-integrated programme of development’ to cope with the needs of a growing population. This was ‘a colossal task’, made more difficult by the fact that India’s per capita income and rate of saving were among the lowest in the world (Memorandum para 4). Indian efforts towards rapid economic advancement constituted ‘a unique experiment in democratic planning’ whose outcome might prove to be of ‘far-reaching significance to the cause of democracy, not only in India, but in many other countries of Asia and Africa with democracy as an instrument of development has yet to pass this test’ (Memorandum para 6). The Memorandum entertained the hope that despite ‘the Community’s heavy institutional machinery it would be easier, both economically and politically, for the Six to evolve policies more helpful to India’s democratic development than might have been possible for each of the Member States individually’ (Lall et al., 1984, p. xii).

The democracy argument did not go far with the Six’s hard-nosed negotiators, but it did indeed get some mileage with members of the European Parliament, which did urge the Commission to adopt a more helpful approach.

Role of Ambassador Lall

India was privileged to have the suave and sagacious Krishen Behari Lall as its first ambassador to EEC from 1962 to 1966. Educated in the School of Oriental Studies, London and University College Oxford, he served in the Indian Civil Service in the present-day Madhya Pradesh before serving as Joint Secretary, Ministry of Commerce and Industry (1954–1959) and Chairman of the State Trading Corporation (1956–1959). He had led the first Indian delegation to Brussels in the late 1950s and had informal discussions with Jean Ray, the Commissioner in charge of External Relations, about tariff reductions (Kanungo, 1960).

Lall also had the unique distinction of being the first Indian ambassador to the Community to be simultaneously accredited to the Seven (six EEC member states and the UK) (Lall, 1990, p. 8). This equipped him with the requisite credentials to have access to ministers and senior officials across the Community and represent India’s case to the UK and the Six. Moreover, as the Commissioner-General for Economic Affairs in charge of Europe, he frequently travelled to London and Continental Europe to lobby with key member states’ officials, sensitise political personalities and often engage with the Press by highlighting Indian perspectives and concerns (Jain, 2019, p. 39). He also interacted with a cross-section of European society in order to sensitise them about Indian concerns. For instance, while addressing students in Brussels, he stated that by the 1970s, the further growth of Western Europe would depend not on Western Europe, but on developing countries (The Times, 1962b, p. 7).

Lall’s greatest contribution was undeniably his masterstroke in proposing that once Britain and EEC successfully concluded their negotiations, the enlarged Community should enter into a comprehensive trade agreement with India. This proposal was accepted and became a part of the entry package negotiated by Edward Heath as Leader of the British negotiating team (Jain, 2019, p. 25).

Nehru held K. B. Lall in high regard. New Delhi had sent ‘one of our ablest ambassadors’ to develop direct contacts with the Six (Nehru, 1962j, p. 466). His efforts had resulted in ‘impressing’ the Six with ‘the value of their close association’, with India regarding exports because ultimately, India could buy more if it exported more (Nehru, 1962g, pp. 93–94). Four days after presenting his credentials (2 March 1962), Lall wrote to Nehru enclosing some of his speeches he had made since his arrival. Nehru was delighted that he had ‘started off well’ and expressed confidence that his presence in Brussels would be of ‘considerable help’ (Nehru, 1962b, p. 590).

Ably assisted by two assistants, ² Lall regularly sent reports about the fluid situation in Brussels. He highlighted the issues were being discussed and that pressure was being brought to bear, but this was being resisted (Nehru, 1962d, col. 1955). Overall, he felt that matters relating to the European Common Market were ‘being handled very competently by our ambassador [in Brussels] who is in charge of these matters’ (Nehru, 1962k, p. 78).

An extremely important role was played by the Indian Mission to EEC, which lobbied the EEC Commission, the member states and their embassies as well as the European Parliament. Among Community institutions, the Commission generally gave the Indians a sympathetic hearing, but was powerless to act without the consent of the Council of Ministers, where consensus was elusive (Jain, 2015, p. 11). The Ministry of External Affairs generally deferred to the Embassy’s initiatives in the drafting of aide-memoires and important communications. Within the framework of the broad national interest, the Indian Mission independently worked out its own line of action towards the Community (Jain, 2019, p. 39).

Thus, during his first outing in Brussels, Lall had been ‘very active’ in presenting Indian interests to EEC and had played ‘a key role’ in defending Indian positions during the negotiations for British entry into the Common Market (Winand, 2015, p. 32).

Conclusion

Britain’s first application to join the European Community in July 1961 came up at a time when India was confronting major develpmental challenges and chronic trade deficits with the Six. By the spring of 1962, India had realised that it had overrated Britain’s bargaining power and that New Delhi would have to take care of its own interests. There was also some degree of discontent at the ‘discrimination’ made by EEC whose attitude had been less firm in the case of ‘white’ Commonwealth represented by Canada, Australia and New Zealand and the ‘coloured’ Commonwealth represented by the Asian Commonwealth. India, Nehru realised, should not expect too much despite British attempts to help secure safeguards (Nehru, 1962e).

India did not like Britain’s first application to join the European Community as it came at a time of critical financial difficulties. But it understood the ‘historical trend’ of Britain being ‘more clearly allied to the rest of Western Europe’ (Nehru, 1962a, p. 23).

India was quite realistic about the safeguards that the United Kingdom would be able to secure for India during its negotiations with the Six. It was not entirely in the hands of the United Kingdom since the ECM would prescribe ‘its own conditions, which it might refuse to accept. But, if the UK joined, it would be a matter of compromise between what other people say and what they say’ (Nehru, 1962d, col. 1953). The British Government would try ‘their utmost to safeguard the interests of the Commonwealth countries, but to what extent they may be able to do so’ remained to be seen (Nehru, 1962c, p. 12, 1962d, col 1954). The Six were ‘hard bargainers’ when it came to responding to Indian representations (Nehru, 1962g, p. 1). They were ‘hard and tough people bent on achieving their objective economically and politically’. India could not ‘expect much from the UK arguing our case, although we want the UK to argue our case as far as possible it can’ (Nehru, 1962e, pp. 512–513).

Once it became clear that Britain would be applying for membership of the Community, India pursued a dual strategy of maintaining ‘direct dealings’ with Brussels by appointing its ambassador to the Common Market and lobbying through the UK as well. For the most part, it relied on the support of the British negotiators (see Lall, 1983, p. 145). This was based on the realisation, as Nehru put it, ‘because we shall have to deal with these European Common Market countries whether we like that market or not…and come to terms with them directly apart from what they might decide’ (Nehru, 1962e, p. 514).

It was not that the Six were not ‘unaware of the discriminatory implications’ of their policies. There was, in fact, a limited recognition of the responsibility the Community bore towards developing countries not associated with it (Lall et al., 1984, p. xiv). The primary reason behind ‘the unwillingness, or inability, of the Six to act generously was the result partly of the fact that they had first to agree among themselves and therefore one objection was enough to kill a generous impulse, and partly of the fear that the British if given an inch would take a mile’ (Camps, 1964, pp. 410–411). The Six were ‘too deeply immersed in their own internal squabbles to be either concerned are willing to give thought to India’s difficulties’ (Kamath, 1963, p. 8).

New Delhi was disappointed that ‘so much work had gone to waste’, but it provided an opportunity for both the Indian Government and business interests to ponder as to how to enlarge its trade exchanges with Britain (Lall, 1963, p. 8). After the French veto, K. B. Lall engaged in discussions with officials in France, the Netherlands and the Federal Republic of Germany on how to increase India’s trade with them. New Delhi revived the Joint Commissions with France (established in 1959) and the one with Germany, which had been hibernating for 3 years. However, despite ‘a tremendous effort on the part of the Indian Mission in Brussels not much progress could be made’ (Lall, 1983, pp. 141–142).

For Ambassador Lall, the failure of the first British application in 1963 was ‘a temporary failure’, that Britain would ‘sooner rather than later’ become a member of the enlarged Community. It had given a breathing space to the Community to make up its mind that Britain was ready to become a member of the Common Market as well as to Commonwealth countries to adjust their economies to a time when Britain would eventually become a member of the enlarged EEC (Lall, 1983, pp. 139–140). Over the next decade, India pursued a sectoral approach in seeking to secure better access for individual export products and conclude a Commercial Cooperation Agreement with the Community in 1973. But that is another chapter in the evolution of India–EU relations.