A cable to Washington in January, 1974, said, "We have seen no evidence to confirm an Indian decision to explode a nuclear device of to manufacture nuclear weapons of delivery systems. We have detected no serious new efforts in areas relevant to nuclear weapons capabilities."
Ironically, a similar cable in May, 1974, assessing the "why now?" of India's nuclear test observed that New Delhi's economic problems may have been the reason to conduct the exercise.
In January, US embassy judged that "direction and gradual expansion of India's relatively sophisticated nuclear programme has been maintained. But schedules for atomic energy projects have been delayed, and slippage in plans has been publicly acknowledged by the government." It gave reasons for India's apparent disinterest in nuclear tests. "Since the Bangladesh war public interest in military issues appears to have receded; a truncated Pakistan no longer seem major threat; Chinese hostility has somewhat diminished; good relations and military cooperation with the Soviets have been maintained; cooperation with countries that would oppose an Indian test is desired; India has largely achieved its central objective of a dominant position in South Asia without the bomb."
By May, the situation had changed drastically. Reversing their initial assessment, the US Embassy said, "India has exploded a nuclear device at a time when India is in deep economic difficulty and the government is contending with a rising tide of disillusionment and discontent. Corruption, mismanagement, labor indiscipline, rampant inflation, food shortages, and the impact of the high cost of crude have led to dismal economic performance and severe political unrest. The turmoil earlier this year in Gujarat and then Bihar, scattered small-scale violence, and the current rail strike have confronted the government with a series of crises in maintaining political and economic discipline. We are inclined to believe that this general domestic gloom and uncertainty weighed significantly in the balance of India's nuclear decision. The need for a psychological boost, the hope of recreating the atmosphere of exhilaration and nationalism that swept the country after 1971 — contrary to our earlier expectation — may have tipped the scales."
Assessing India's international position, the cable observed, India had felt sidelined by the international system. "The feeling that it needed to demonstrate its nuclear capability in order to be taken seriously may also have been a psychological element in its decision."
Interestingly, both Washington, Beijing (then Peking) and the international community said they would take "low-key" approach to the Indian tests, despite apprehension expressed by some US diplomats that it might be difficult to get Japan to sign the NPT as a result of the Indian nuclear tests. The Chinese ambassador in Hong Kong told American diplomats that the Indian test was "no surprise" since according to their calculation both the US and USSR had helped New Delhi to test nuclear weapons.
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