TREATY OF COMMERCE AND NAVIGATION BETWEEN THE IMPERIAL GOVERNMENT OF IRAN AND THE GOVERNMENT OF INDIA
Tehran, 15 December 1954
His Imperial Majesty the Shahanshah of Iran and the President of India being desirous of facilitating and furthering commerce and
navigation between their respective countries, have resolved to conclude a Treaty of Commerce and Navigation and have appointed their
plenipotentiaries for this purpose as follows : His Imperial Majesty the Shahanshah of Iran His Excellency Mr. Abdullah Entezam.
The President of India: His Excellency Dr. Tara Chand, who, having exhibited and exchanged their full powers in good and due form,
have agreed as follows:
Subject to reciprocal treatment, the nationals of either contracting party may freely enter the territory of the other party and,
in conformity with laws and regulations in force therein, engage in and carry on commerce, industry, trade and also any profession,
not appropriated to nationals of that party; and subject to such reciprocal treatment, the treatment accorded to the nationals of
either contracting party shall not be less favourable than that accorded to the nationals of the most favoured nation.
Subject to reciprocal treatment, the nationals of either contracting party shall receive in the territory of the other, the most favoured
nation treatment in regard to the acquisition, possession, transfer, lease and disposal of every kind of movable and immovable property
in conformity with the laws and regulations in force therein.
The properties of the nationals of either contracting party in the territory of the other shall receive lawful protection. The properties,
of whatsoever description, of the nationals of either contracting party shall not be seized or confiscated except for public purposes
and only if real and just compensation is given to them for such expropriation. Reasonable facilities will be given for remittance
of compensation payable on expropriation.
In the event of the nationals of either contracting party lawfully acquiring any property in the territory of the other, the removal,
transfer or disposal of such property from that territory shall be permissible in accordance with the laws and regulations in force
in that territory.
Subject to the provisions of Article 11, the nationals of either contracting party shall not in the territory of the other pay any
taxes, imposts or duties heavier than those imposed on the nationals of the most favoured nation.
Subject to reciprocal treatment, each contracting party shall, having regard to its foreign exchange position, give reasonable facilities
to hationals of the other party for making remittances to the country of their domicile for the support of their families and for
other essential payments, and, such facilities shall subject to reciprocity be not less favourable than those accorded to the nationals
of any third country.
Subject to reciprocal treatment, in the event of a national of either contracting party dying in the territory of the other, his property
in that territory shall be duly protected and administered in accordance with the laws in force there. The nearest Consular or Diplomatic
Representative of the Government of the deceased shall be informed in advance of the time and place where the estate of the deceased
will be sealed, listed and prepared for its disposal, and such Consular or Diplomatic Representative shall be entitled to attend
or be represented and be apprised of the proceedings relating to the estate. The assets of the estate shall after discharge of undisputed
debts and liabilities, and payment of the taxes, imposts and duties payable on the estate in that territory, will be made over to
the Consular or Diplomatic Representative of his Government. If the deceased had been a temporary visitor, and his legal representative
and successor is at the place of his death, the estate after discharge of the liabilities, and payment of the taxes, imposts, and
duties, aforesaid, shall be handed over to him. The succession to the property of such deceased shall be regulated by the laws in
force in the country of which he is a subject at the time of his death; and the estate shall be liable to all taxes, imposts and
duties as are levied or leviable on the estates of any other person dying at the place of his death.
The nationals of either contracting party shall, in the territory of the other, be accorded the same treatment as is accorded to the
nationals of the other in having access to the courts of justice and tribunals, in all degrees of jurisdiction and in respect of
the security that the foreign nationals should deposit at the time of raising or entering a lawsuit as a third party (Cautio Judicatum
Solvi), the principle of reciprocal treatment shall apply.
All commercial enterprises such as industrial, trading, banking, insurance or financial corporations owned or controlled by the nationals
of either contracting party may be constituted in the territory of the other contracting party with due regard to the relevant laws
and on the basis of reciprocal treatment. Such corporations shall in all respects be accorded treatment not less favourable than
that accorded to the corporation of any third country.
The contracting parties shall, subject to the provisions of Article 11, grant each other complete most favoured nation treatment,
that is to say, with respect to customs duties and charges of any kind imposed on or in connection with importation or exportation
or imposed on the international transfer of payments for imports or exports and with respect to the method of levying such duties
and charges and with respect to all rules and formalities relating to the clearance of goods through the customs, any advantage,
favour, privilege or immunity granted by either contracting party to any product originating in or destined for any third country
shall be accorded immediately and unconditionally to the like product originating in or destined for the territory of either contracting
The contracting parties agree that the provisions of this Treaty with respect to the "Most Favoured Nation Treatment" shall
not be deemed to be contravened by the grant or continuance of : (a) advantages accorded or to be accorded by the contracting parties
to contiguous countries; (b) advantages resulting from any Customs Union or free trade area to which either of the contracting parties
is or may become a party; (c) preference or advantage accorded by either contracting party to any country, and subsisting on the
date of this Treaty or in replacement of such preferences or advantages.
The nationals of either contracting party shall in the territory of the other party be exempted in peace and war from any kind of
compulsory military service and from all obligations or payments in lieu of such service. But in the case of a natural catastrophe,
such compulsory services of a civil nature as are imposed on the nationals of either contracting party may also be imposed on the
resident nationals of the other contracting party on the same conditions.
Subject to provisions of Article 11, each contracting party shall, in respect of duties of tonnage, harbour, pilotage, lighthouses
and other analogous duties levied in the ports of either contracting party, accord treatment not less favourable than that accorded
to the ships of any third country, and provide all possible facilities that it can reasonably accord with regard to the transport
of as large a proportion as possible of the imported and exported goods between the two countries by the ships of either contracting
party. The provisions of this Article shall not apply to coasting trade of either party.
The contracting parties agree that all disputes arising out of the application or interpretation of this treaty shall be settled as
soon as possible by peaceful means and in the first instance by negotiations through ordinary diplomatic channels.
The Treaty shall be ratified by the competent authorities of both parties and shall come in force immediately after the exchange of
instruments of ratification which will take place at New Delhi.
This Treaty shall remain valid for three years from the date on which it comes in force and shall also be effective thereafter for
an unlimited period unless either party, by giving six months notice in writing, notifies the order of its invitation to terminate
it. This Treaty is made in three languages, Persian, Hindi and English, the three texts being equally authentic, except in the case
of doubt when the English text shall prevail.
DONE at Tehran this 24th day of Azar 1333 (Solar Year) corresponding to 15th day of December, 1954.
(Signed) ABDULLAH ENTEZAM
For His Imperial Majesty the Shahanshah of Iran:
(Signed) TARA CHAND
For the President of India
EXCHANGE OF LETTERS
In the course of the discussions that have led to the conclusion of the Treaty of Commerce and Navigation between the Government of
the Republic of India and the Imperial Government of Iran it was agreed that the phrase "essential current payments" occurring
in Article 6 would be defined clearly by the exchange of letters. My Government is of the opinion that, though it is not possible
to give an exhaustive list of "essential current payments", the following should be regarded as the more common types of
current liabilities which foreign nationals have to meet in their country : (i) maintenance of families and dependents including
children's education; (ii) payment of taxes on and expenses for the upkeep of property; (iii) payment of life insurance premia; (iv)
subscriptions to clubs and other institutions. It is also the view of my Government that foreign nationals residing temporarily in
either of the country should be given the facility to remit their current monthly savings to their home country without limitation
as to the nature of payments required to be made out of such remittances. My Government should be grateful to have the confirmation
of your Government in this regard. This letter and your confirmation will be treated by both parties/Governments as forming part
of the Agreement. I avail myself of the opportunity to renew to your Excellency the assurance-of my highest consideration.
(Signed) TARA CHAND,
Ambassador of India, Tehran. 15th December, 1954.
To His Excellency Mr. ABDULLAH ENTEZAM, Representative of the Government of Iran.
I have today received with thanks your letter dated the 15-12-1954, which reads as follows (See letter I)
2. I have the honour to confirm that this correctly sets out the understandings reached between us.
(Signed) ABDULLAH ENTEZAM,
Minister for Foreign Affairs, Tehran. 15th December, 1954.
To His Excellency Dr. TARA CHAND, Ambassador of India, Tehran.
No. 109(I)-C.S./54. 4th June, 1955
In the course of discussion of the Treaty of Commerce and Navigation between India and Iran I understand that certain doubts have
arisen in regard to the wording of para 2 of the letter which was exchanged on the 15th December 1954 defining the phrase "essential
payments" occurring in Article 6 of the Treaty. My Government has now agreed to the following changes in para 2 of the above
(1) In place of "foreign nationals" substitute "nationals of India and Iran".
(2) Delete the sentence beginning in the fourth line with the words "without limitations" and ending in the seventh line
with the words "such remittances".
(3) The words "essential payments" occurring in Article 6 of the Treaty as explained in paragraph 1 of the letter exchanged
between the two Governments on 15th December 1954 cover "current payments"; that is, remittances for meeting essential
liabilities and charges. These remittances from an Indian national resident in Iran or by an Iranian national residing in India to
his home country would be out of the savings of the national. These current international transactions are covered by the agreement
of the International Monetary Fund, of which both India and Iran are members.
292 INDIA Bilateral Treaties and Agreements, Volume 2 It is hoped that the Imperial Government of Iran will have no objection to the
draft letter as revised. This letter and your confirmation will also be treated by both the Governments as forming part of the Treaty.
Notwithstanding the text of the Treaty as signed, it will be regarded by both the Governments as being in force in its amended form
as from the date on which the Treaty comes into force. I avail myself of this opportunity to renew to your Excellency the assurances
of my highest consideration.
(Signed) TARA CHAND.
His Excellency, the Minister for Foreign Affairs, Imperial Government of Iran, Tehran.
The 4th June, 1955
From: Imperial Ministry of Foreign Affairs, Tehran.
To: His Excellency Dr. TARA CHAND, Ambassador of India, Tehran.
I have today received with thanks your letter dated the 4th June 1955, which reads as follows : [See letter III] I have the honour
to confirm that this correctly sets out the understandings reached between us. I avail myself of this opportunity to renew to your
Excellency the assurances of my highest consideration.
Yours sincerely, (Signed) MOSTAFA SAMIY