I am forwarding herewith, informally, a Note prepared by an officer of this Department setting out certain arguments in favour of a token quota system for prospective Asian migrants to Australia.
The author of the Note has spent several years in India, and it is possible that his elaboration of the Indian aspect may be of interest to you in the event of the matter arising for consideration some time in the future. 
A TOKEN QUOTA SYSTEM FOR PROSPECTIVE ASIAN MIGRANTS
The present juncture of affairs, both national and international, seems to indicate that the introduction of a token Quota System for prospective Asian immigrants is not merely feasible but also highly desirable. In summarising below the grounds for this view, the case of India is singled out as being the special concern of the Middle East Section, although doubtless what applies to India may be taken as applicable, mutatis mutandis, to other Asian countries as well.
1. The official defence of our 'White Australia' policy is that it is based an economic and social, not on racial, grounds. If this were in fact the case, then there would be no bar to the entry into Australia, with a view to permanent settlement, of thoroughly educated and westernised Indians. Since this is not so, there are grounds for the criticism that Australia's immigration policy contains elements of racial discrimination.
2. Indians can understand, and readily accept, the exclusion of lower-class Indian labourers, on the economic grounds that their admission would never lower Australian standards, disrupt Australian economy and undermine the welfare of the unskilled Australian worker. The exclusion of such migrants is demonstrably justifiable, and it is clear that there can be no modification of the existing policy in this respect. Nevertheless, the Indian view, not without some justification, is that the exclusion of educated and westernised Indians (e.g. qualified engineers, doctors, lawyers, journalists, etc.) can only be described as racial discrimination, especially in view of Australia's expressed desire for 70,000 migrants per year to provide the manpower for her general economic expansion and development.
3. Illustrations of the general Indian attitude were set out in New Delhi Despatch No. 52/46 dated 22nd December, 1947. The latest illustration if Pandit Nehru's Foreign Policy Speech in the Dominion Legislature on 4th December, when, inter alia, he referred in more general terms to 'the old and painful subject of Indians in the British Commonwealth'. The Indian aspect of the question merits special attention and may be briefly elaborated as follows:-
(a) Australia's stock in India stands high, and a tone of friendliness and goodwill runs through practically all references to Australia in the press-with one exception, i.e. the occasional reference, more or less sharply critical, to the 'White Australia' policy. The introduction of a token Quota System would do much to remove this one standing source of grievance and criticism.
(b) When in 1946, the United States passed an Act permitting the entry of 100 Indian migrants per annum, the Act was hailed enthusiastically in India as indicating the elimination of anti- Asiatic prejudice in America. A similar gesture from Australia would probably be hailed in India even more enthusiastically, because of Australia's close association in the mind of Indians with the traditional 'White Australia' policy.
(c) One of the obstacles to India's remaining within the British Commonwealth is her resentment at the racial discrimination indicated, first by the treatment of Indians in South Africa, and second by our own 'White Australia' policy. The elimination of this resentment is as desirable as the advantages of persuading India to remain within the Commonwealth are obvious.
(d) While, it is true, it cannot be claimed that India's remaining within the Commonwealth depends entirely on Australia modifying her Immigration policy, nevertheless it is certain that the introduction of a token quota system would have at least some effect on India's attitude towards the British Commonwealth as a whole.
(e) In the next few decades, independent India may well become the leading power in the Far East. Consequently the importance of fostering and developing friendly relations with India, as an independent neighbour of Australia, needs no elaboration. In matters of Trade and Defence, for example, the advantages to Australia of a friendly India are obvious.
4. Figures supplied by the Immigration Department indicate, that during the 12 years between 1933 and 1945, the number of Indians arriving in Australia exceeded those departing by 390, i.e. an increase of about 30 per year. Very possibly, under the existing regulations these Indians came within the category of 'merchants'.
5. It may be noted, in passing, that Indians who qualify under the official definition of 'merchant' are permitted to land and settle in Australia. To this extent, the Australian immigration policy is not racial in character. There is no objection to Indians as such settling in Australia provided they fulfil the conditions laid down in the definition of 'merchant'. To extend the privilege of entry to other Indians outside the merchant category, therefore, would involve no departure from principle but merely a modification of its application in practice.
6. It is suggested, therefore, that this entrance privilege be extended to other Indians besides merchants, and that the annual average be raised from 30 to, say, 50 per year. Prospective migrants could be carefully screened, and a condition of acceptance laid down that they sign a declaration of their willingness to accept and uphold the Australian way of life and to become 100% Australian citizens.
7. Such a concession, namely raising the quota to 50 per annum and including higher-class Indians in addition to merchants, would involve no deviation in principle from the existing policy, but simply a modification in its practical application. The proportion of Indians to the total population of Australia would remain infinitesimal, and the cost of such a concession would be nil. In fact, Australia would stand to gain in intellectual and technical equipment, particularly in the admission of specially trained or qualified Indian migrants. In any case, Australia would always be able to keep the matter under close control.
8. Indians would in no way resent the exercise of any close scrutiny or control of prospective migrants. In any case, from the Indian point of view, the process of scrutiny and the size of the quota would be of no moment compared with the all-important fact of the quota itself.
9. This raises the argument of 'the thin edge of the wedge', which, in more general terms, embodies the two following apprehensions:-
(a) Asian settlers will multiply rapidly and form distinct communities.
(b) Pressure will be brought to bear subsequently for the admission of increasing numbers of Asians.
10. The reply to these apprehensions is as follows:-
(a) i. Statistics of the rate of population growth of Asians already in Australia would probably indicate that this particular apprehension need not be taken seriously.
ii. In any case, the chances are that a considerable proportion of the Asian settlers, particularly the superior, more thoroughly westernised types, will intermarry with Australians, the Asian strain becoming progressively weaker.
iii. The more highly educated or wealthy types are unlikely to have large families.
(b) iv. At the Asian Relations Conference in New Delhi , March 1947, in the Discussion Group on Racial Problems and Inter-Asian Migration, the right of all countries to determine the future composition of their population was freely admitted and even emphasized. With a view to eliminating resentment, however, some delegates urged a quota system for all Asians.
V. Once a token quota system is established, the sense of racial discrimination will be eliminated, and it is most improbable that any Asian country will agitate for the admission into Australia of increasing numbers of its nationals.
vi. Not only will there be no moral grounds for any such agitation, but not a few of the Asian countries have restrictive Immigration policies themselves, which would constitute embarrassing 'cupboard skeletons'.
vii. In the remote event of any such agitation developing, Australia would be on unassailable grounds in categorically refusing to make any further concessions.
11. The recent outcry in the Australian press over the 14 Malaya repatriates  would seem to indicate that popular support for the introduction of a token Quota System would not be lacking. The widely representative character of the protest is significant.
12. To sum up, instances could be multiplied of the rising tide of Asiatic feeling on the score of racial discrimination. While it is possible to make a gesture on a goodwill basis at the present stage, this may become progressively less possible in the future.
13. The purpose of the present Note is not to suggest specific figures, but simply to recommend the consideration in principle of a token quota system. The determination of the actual quotas would, of course, be the province of the Immigration Department.
It is suggested, however, that the figures be related approximately to the population of the various Asian countries concerned with some appropriate weightage in favour of India, Pakistan and Ceylon, as being sister Dominions. For instance, if China's quota were, say 50 per annum, India's might be 60, Pakistan's 30, Ceylon 20, Burma 20, etc. (It is not considered that the exclusion of Japan from any quota system, at any rate for many years to come, would require any special justification.)