The following are rough notes regarding long range policy towards
India and Pakistan. I shall be glad to amplify them at any time:

1. British Commonwealth Relations. It is essential every effort be
made to keep both countries within the Commonwealth, if for no
other reason lest another power occupy or extend influence over
them. The strategic position of India and Pakistan makes them our
partners in any Indian Ocean security scheme.

India will be reluctant to leave the Commonwealth if Pakistan
stays in. Particular endeavours should therefore be made to ensure
Pakistan's continuance. This win pay better dividends than
concentrating on keeping India in. Pakistan being the newer and
poorer state will be much more susceptible to defence, commercial
and other influences.

In the case of both countries we have to take into account the
very ready reaction both of Indians and subjects of Pakistan to
gestures of friendship and goodwill. Contrariwise they can be
affected very readily the other way by lack of consideration or
friendliness.

2. To secure the abiding goodwill of either India or Pakistan we
must modify the white Australia policy. AR other gestures would be
futile without this. We cannot interfere with the basis of our
migration policy but we can:

(a) Not refer to it as 'White Australia' in any official
pronouncement.

(b) Make its application elastic to admit any Indians who have
sufficient means of support and are westernised and assimilable.

The adoption of a quota would be the simplest but the exact method
could be left for discussion with India and Pakistan. At the
moment the thing that gives most offence to educated Indians is
the feeling that they would be excluded if they applied, not that
we exclude Indians of lower grades.

(c) We should continue to indicate to India, and at an early stage
to Pakistan, that the Australian Government wants to have
comprehensive discussions covering all matters of common interest.

The way has already been prepared by the Australian High
Commissioner with India. India and Pakistan will almost certainly
wish to include migration in the discussions and we cannot well
refuse, unless we limit the preliminary discussions to defence
matters.

(d) Our relations with both countries should be considered in a
South East Asia context. Probably there should be a separate
division of this Department to deal with South East Asia affairs
including India and Pakistan. We should convey the impression to
them, particularly to India, that we wish to act in partnership
with them in promoting the welfare of South East Asian countries.

I do not think we will make much progress if we attempt to make
ourselves the main figure in such endeavours.

(e) Endeavours should be made to strengthen our connection and
hold on the smaller South East Asian countries especially
Indonesia, Malaya and Ceylon. The main method would be
commercially and the Government should offer concessions and
guarantees to exporters who will deal with these countries. We
could thus make it against their interests to follow policies to
which we are opposed.

3. Where there is a clash between India and Pakistan we are more
likely to benefit by staying out as far as possible. Attempts at
mediation and intervention win probably antagonize one side or the
other and may, unless very carefully handled, antagonize both. In
determining the line to follow the fundamental principle should be
to cultivate Pakistan rather than India if we must make a choice.