ABSTRACT
In 1965–1966 the United States (US) carried out a policy of economic pressure against India by suspending Public Law 480 aid and then negotiating only short-term agreements. The Aid India Consortium was formed in 1958 at the urging of the US under the sponsorship of the World Bank. The US suspended aid when US-Indian relations were strained over the India-Pakistan war over Kashmir. However, since the US had been supplying India with large amounts of economic assistance for more than a decade, the threat and actual termination of aid was an application of negative economic pressure. US officials agreed on the objectives but disagreed on what actions the US should take to ensure Indian compliance with the formal objectives. In order to remove primary responsibility for India’s food shortage from the US, President Johnson endeavored to involve the World Bank and other international agencies in solving India’s problems.
