The Reagan administration has told India that it should turn for its future economic development to commercial financing on the world market rather than relying heavily on U.S.-backed concessional loans, Prime Minister Indira Gandhi said yesterday after two days of official talks here.
Such a policy "has its limits" and could lead to the piling up of a large and burdensome private debt, according to the Indian leader.
But despite her disagreement with the U.S. administration on this and other points, she seemed pleased with her first visit here in 11 years and expressed the belief that it helped to dispel misunderstandings between the two governments and peoples. "We can only agree to disagree on certain points," Gandhi said in summing up her conversations with President Reagan and senior administration officials.
As she outlined them in several meetings with journalists, including visits to The Washington Post and the National Press Club, the continuing disagreements cover a range of military, diplomatic and economic issues.
She disclosed that even the major advance announced here, the U.S.-Indian settlement of the longstanding Tarapur nuclear fuel issue, is an incomplete agreement, with the two countries still not of one mind on the requirements for future reprocessing of spent nuclear fuel that originated in the United States.
India is sticking to its long-standing position that U.S. agreement is not required for reprocessing of the U.S.-supplied fuel, as long as international safeguards are in effect, Gandhi and her aides told The Post. They conceded that the United States is holding to its longstanding view that such permission is required.
"It still isn't resolved," Gandhi said of the reprocessing issue. At the same time, she expressed satisfaction that the countries have agreed to eliminate the most immediate and pressing nuclear problem by arranging for France to supply fuel for India's Tarapur power reactor.
Gandhi's visit, while falling short of reaching agreements in a variety of fields, established a better framework for the world's two largest democratic countries to work together, according to a U.S. official familiar with the talks.
Such an enhanced framework, a better basis for understanding and a reduction of U.S. "misconceptions" appeared to be Gandhi's objectives. "Our main purpose is to put across the Indian point of view," she told the press club. "We don't expect you to change your positions" as a result of her visit, she added.
For India, the most serious practical problem seems likely to be the U.S. attitude toward and contribution to development financing through the concessional branch of the World Bank, the International Development Association (IDA). India has been the largest single recipient of these funds, which are loaned at interest of less than 1 percent.
Gandhi, who was able to convince British Prime Minister Margaret Thatcher and other leaders to maintain their level of support for IDA, made a major plea for similar U.S. action. But the answer was hardly encouraging.
"The U.S. point is that we should go in for commercial borrowing," Gandhi reported. "We do go in for that, but it has its limits," she said, mentioning especially the much higher cost of commercial rate borrowing.
According to an adminstration official, India was told that it should move to a blend of concessional loans and "hard" loans from multilateral banks, with IDA borrowing diminishing, and at the same time seek to borrow more from commercial markets. The administration's rationale for this, the official said, is that the Indian economy is more advanced than that of many other low-income countries.
The administration did not provide specific figures to Gandhi or her party about future U.S. support of international concessional loans or its estimates of India's rightful share, the official said.
On other issues between India and the United States, Gandhi said:
Advanced U.S. arms supplied to Pakistan under a new $3.2 billion aid program are not likely to be used to defend that country against Soviet troops stationed in Afghanistan, which is the U.S. justification for the arms supply.
"I don't think they the Pakistanis are doing it on that basis, whatever they say to you. All their divisions are still massed on our borders," Gandhi told Post editors. She said Pakistani leaders have "very categorically told the Soviet leadership" they have no intention of becoming involved in a battle over Afghanistan because they know this would mean a contest with a superpower.
In addition, "the Soviets are sure that they the weapons will not be used against them," she said.
The Soviets "don't want to stay in Afghanistan" and might be convinced to withdraw in favor of a regime in Kabul that is non-aligned.
"I don't think the Soviets would tolerate any regime that is anti-Soviet or which according to them would adversely affect their Asian republics," she told a Washington news conference. But she expressed more optimism than usually is heard about the prospects for a negotiated solution to the Afghanistan problem within this guideline.
There is "no comparison" between India's 1974 nuclear explosion, which she insisted was a "peaceful experiment," and the atomic bomb project reportedly under way in neighboring Pakistan.
"We think it will be dangerous for Pakistan to have nuclear weapons, not vis-a-vis India necessarily, though that is part of it, but for the region as a whole," she told Post editors.
"I don't know what commitments they the Pakistanis have made to other countries on this matter. I think it could be a very serious problem," she added, evidently a reference to reports that Pakistan's nuclear device could be an "Islamic bomb" available to other Islamic nations.
She refused to make a categorical statement about India's reaction to a Pakistani nuclear weapons blast, but said nothing to indicate that India would begin a major nuclear arms program of its own.
Gandhi is scheduled to leave Washington this afternoon for New York. Later she will fly to Los Angeles and Honolulu before returning to India.