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CORPITENTIAL
and the UK Parliament.
Time was starting to run out, with Hong Kong confidence visibly disturbed. The issue looked like continuing to be a cliff-hanger. He put two requests to the Indian side: not to believe everything put out by the Chinese on the subject; and to discourage Indian bankers and investors from withdrawing their assets from Hong Kong (which would be in their own worst interest).
KAL Airliner
3.
Sir Julian Bullard reverted to a point arising from the morning's discussion: the KAL incident. The UK side had been surprised that the Russians had clung to the story that the aeroplane had been on an intelligence mission. Mr Rasgotra said the Indians were positive that the Russians genuinely believed this. India had many questions concerning the affair. Sir Robert Wade-Gery asked whether the Russians regretted their action, and whether they would repeat it in similar circumstances. Sir Julian Bullard thought they would; five years ago they had brought down, admittedly with gunfire rather than missiles, another KAL plane in daylight. He had noticed that India had not joined the UN debate in which 40 countries had condemned the Soviet action in more or less clear fashion. Mr Rasgotra said the Indians did not understand why the aircraft had been in Soviet airspace for so long. Their experts were not satisfied with the explanation. This was why they had decided to abstain at the ICAO meeting in Montreal. India had wanted to support the resolution, but its proponents had refused to change the preambular paragraphs or to allow a vote paragraph by paragraph. Sir Julian Bullard asked if India was content with the Soviet claim that it had the right to fire on any civilian airliner which it suspected of being engaged in espionage. Mr Rasgotra said the Russians claimed to have incontrovertible proof, from intercepted trans- missions, that the KAL plane had been thus engaged. Sir Julian Bullard said that an alarming aspect of the affair was that under the Soviet system it appeared that a high level decision would have been required not to shoot the plane down. Mr Rasgotra said it was precisely this which worried India: by exercise of this kind of delegated authority a nuclear conflict might one day break out. There was too much rhetoric about this incident. Sir Julian Bullard said that the first reaction in the FCO had been cautious, but we had been carried along by the strong public mood in favour of a clear condemnation. Mr Rasgotra said that Indian public opinion had also pressed strongly for a statement of condemnation by the Government, but in a crisis one should keep all lines of communication open. Sir Julian Bullard said that Sir Geoffrey Howe believed the incident proved it was all the more necessary to keep talking to the Russians.
Pakistan
4.
Mr Rasgotra said the Indian relationship with Pakistan was the most crucial and difficult. India sincerely wanted normalisation. India had no particular preference as to the political regime adopted by neighbouring countries Nepal and Bhutan had monarchies with little transfer of democratic power; Bangladesh and Pakistan had military regimes; only Sri Lanka had a
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/democratic