An American military plane took off from Karachi in June 1944. One of the passengers was Reserve Bank of India governor C.D. Deshmukh. He was on his way to the US to attend a conference in a small New Hampshire town called Bretton Woods. The ambitious goal of the Bretton Woods conference was to get major countries to agree on a new international monetary system that would hopefully avoid the disastrous mistakes of the 1930s.

The war in Europe had ended a few weeks ago. The war in Asia was still on. The dominant narrative on the Bretton Woods conference is about the role played by the Americans and the British, and especially the battle of wits between Harry Dexter White on the American side and John Maynard Keynes on the British side. The victorious Allies obviously carried a lot of heft. However, the story of the small Indian delegation needs to be retold as the 75th anniversary of the Bretton Woods conference approaches.

India had been invited to the high table though it was still a British colony. Most of the other participants represented independent nations. The Indian delegation punched above its weight at Bretton Woods because of its abilities. It is said that even Keynes was deeply impressed.

Deshmukh reached the US after refuelling stops at Aden, Khartoum, Accra, Ascension Island, Belem, and Georgetown. His first meeting was in Atlantic City. Two British officials joined him there—Jeremy Raisman and Theodore Gregory. India was one of the 16 select countries invited to decide the agenda for the forthcoming conference at Bretton Woods.

Deshmukh, Raisman, and Gregory were later joined by Shanmukham Chetty, A.D. Shroff and B.K. Madan. The six represented India at the main Bretton Woods conference. Chetty was soon to become the first finance minister of independent India. Shroff was one of the main authors of the Bombay Plan for rapid economic development. Madan became an executive director of the International Monetary Fund (IMF).

They were among 730 delegates from 44 countries at Bretton Woods. The conference location was picked because of its pleasant climate in an age when air conditioning was rare. The Mount Washington Hotel was chosen as the main venue because it was open to Jews.

There were initial fears that the British members would not cooperate with the Indian members. Raisman led the Indian delegation. He was a member of the elite Indian Civil Service who went on to become the finance member in the colonial government during World War 2. The Indian delegation did not become a house divided, other than one temporary disagreement. Deshmukh notes in his autobiography: “Sir Jeremy handled India’s case with sympathy and loyalty."

Shroff attracted notice with his sharp wit. In a speech calling for a well-capitalized IMF to deal with future global financial troubles, he spoke of the danger of sending a jellyfish to fight a whale. He also warned that the ambitious reform agenda for a stable world economy could not be fulfilled as long as large countries such as India festered in poverty.

In Barons Of Banking, a wonderful book on the history of Indian finance, Bakhtiyar K. Dadabhoy writes that the Indian delegation to Bretton Woods had four main concerns. First, to get a fair settlement of the nearly £1.3 billion of sterling balances that had been accumulated in London because of trade surpluses, which were being used to finance the British war effort rather than Indian industrialization. Second, ensure that the development needs of countries such as India were central to the international negotiations at Bretton Woods. Third, to secure a satisfactory quota for India in the IMF. Fourth, to get a permanent seat on the boards of the major institutions that were to emerge from the negotiations.

The issue of sterling balances was obviously very important for a country that was hoping to accelerate industrial investment after Independence. India was in effect a creditor to its colonial ruler and had to choose inflationary finance because the sterling balances were locked in London. Britain was later to impose a haircut on its creditors by devaluing the pound by a third against the dollar.

The IMF original quota given to India was $300 million. China got $600 million. This in effect gave China greater heft in the new multilateral lender. The Indian delegation pushed back. Keynes backed the Indian position. He convinced the Americans to take a relook at the quotas. India eventually got a quota of $400 million while China was given $550 million.

It will soon be 75 years since the Bretton Woods conference. It was a rare moment in history when geopolitical rebalancing was combined with high idealism. “The United States and the United Kingdom had the greatest influence at the conference...but Bretton Woods was a genuinely multilateral negotiation. The other large and medium-size countries also shaped the conference," Kurt Schuler and Andrew Rosenberg say in the introduction of their 2013 book on the Bretton Woods transcripts. It is worthwhile to remember that India was one of the countries that made a mark in that landmark conference.

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