138 Moodie to Deschamps 
Minute CANBERRA, 11 February 1948
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.