NID: INDIA: HANDLING OF THE SPY SCANDAL

Created: 2/26/1985

OCR scan of the original document, errors are possible

Top Secret

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Special Analysis

of ths Spy Scandal

Prima Minister Gandhi'a low-key, nonconlrontatlonal uyla appears lo have put Franco and lha USSR on lha defensive aboul lhair complicity In buying secrets without apolllng chances tor constructive relations. Nor has ha made any public statements alluding ro tha US meddling In Indian al

The Indians, who value French technology sales, allowed France to recall its ambassador and defense attache promptly and have sinceiscreet silence about lhe scandal. During the same period. India took delivery of its tirsl two0 fighters on schedule, and the French now believe the hap will havehort-term psychotoglcaHmpact on commercial snd military sales to India In Ihe meantime. "Vino, lo help sales by offering new and better ternsending contract

Soviet involvement

The Investigation into Soviet and East European complicityhas uncovered two separate spyhas been handled quietty. On the one hand. New Delhi has done nothing to rem in press allegations of Soviet involvement. On Ihe other. It does not appear io haveormal protest with the Soviets. Gandhi probably expects lhat, by leaving Moscowloud of suspicion, he demonstrates his displeasure without reopardnino New Delhi's pome source of military^

The Prime Minister also calculates that including the Soviets in tne spy scandal at least temporarily will deraiHheir campaign against his efforts to widen contacts with the West.

Corrective Actions

Gandhi almost has certainlyide-ranging review of government security practices following recent lapses At the same time, however, his media-wise advisers have capitalized on Indian press enthusiasm for the scandal toclean governmeni"

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The Prime Minister has announced new appointments lo top civil servlce petitions end changed the assignments of dozens of senior bureaucrats. These moves had been expected alter his election victory, but they have been given additional impetus with the questioning ofivil servants about the spy scandar Gandhi is quoted in the Indian press as having said. "The buck musi be stopped somewhere and. if it happensert'cular' office, lha officer must feel he is responsible "

New Diplomacy

Rajrv Gandhi's evenhanded and discreet management of the scandal Ls another sign that he Is moving lhe conduct of Indian foreign pol*cy away from his mother's often abrasive and one-sided public diplomacy. Indira Gandhi's style waserate the West while excusing Moscow. It aJso reinforces the impression that Rajiv Gandhi prefers nonconffenta! oral^

Pakistani and Sn Lankan officials wrti have been particularly attentive watchers ot Gandhi's East-West balancing act. They probabry hope he willimilar low-key style to bear on relations with them, g

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