The Indian government has refused an interim $5 million in aid from Union Carbide for victims of the Bhopal gas leak, but a federal judge yesterday ordered the funds distributed by the Red Cross.

Union Carbide made the funding offer in U.S. District Court in New York to aid the victims of a deadly December 1984 leak of the poisonous gas methyl isocyanate (MIC) from the company's pesticide plant in Bhopal that killed 1,700 people and injured more than 200,000.

Judge John Keenan expressed hope that an executive committee representing the victims and representatives of Union Carbide could work out a disbursement plan for the relief funds. The government of India had said earlier that reporting requirements on the aid were so onerous it could not accept the funds.

Meanwhile, DuPont Co. officials announced yesterday the company has developed a process that eliminates transportation and storage of methyl isocyanate. "With our new process, we have eliminated the need to transport and store MIC," said R. D. Stewart, a Du Pont plant manager, said. "Now the product is manufactured in a continuous, 'close-coupled' system that produces MIC and consumes it immediately. There is never more than two pounds of methyl isocyanate in existence at one time."

Although Du Pont had been working for some time on the process, efforts were speeded up following the Bhopal leak, Stewart said.