EXCHANGE OF LETTERS BETWEEN THE GOVERNMENTS OF INDIA AND THE GERMAN DEMOCRATIC REPUBLIC EMBODYING TRADE AND PAYMENTS ARRANGEMENT
New Delhi, 18 December 1959
GOVERNMENT OF INDIA
MINISTRY OF COMMERCE AND INDUSTRY
New Delhi, the 18th December, 1959
Dear Mr. RENNEISEN,
As a result of the negotiations that have taken place recently in New Delhi between the Ministry of Commerce and Industry of the Government
of India and the Trade Delegation of the Government of the German Democratic Republic, certain con ' clusions have been reached which
are set forth in the following paragraphs :
2. Both the Parties are animated by a desire to develop trade relations between the two countries on the basis of equality and mutual
benefit and to increase the volume of trade between them to as high a level as is possible on a balanced basis. They will study and
with the utmost goodwill take decisions on the suggestions which either of them would like to present for the consideration of the
other with the purpose of achieving closer economic relations.
3. For the goods imported and exported from one country to the other, both the Parties undertake to grant maximum facilities allowed
by the respective laws, rules and regulations. During the period of validity of this agreement, total value of the imports will be
equal to the total value of exports effected by either country taking into account the volume of payments of a commercial and non-commercial
nature. For this purpose and for periodic reviews, imports, whether on deferred payment terms or on cash basis, relating to contracts
concluded and to be concluded on the basis of this and earlier agreements will be taken into account as and when payments are made.
4. The export of goods from the German Democratic Republic to India and from india to the German Democratic Republic will be in respect
of the items mentioned in Schedules "A" and "B" respectively.
Appropriate facilities as mentioned under para 3 will also be agreed with regard to trade in goods, which may be mutually granted
to from time to time and which are not mentioned in the attached Schedules.
5. The import and export of the goods stipulated in the above paragraphs will be carried out in accordance with the import, export
and foreign exchange laws, rules, regulations and procedures in force in the German Democratic Republic and in India respectively
and on the basis of contracts to be concluded between the importers and exporters of the respective countries. Both the Parties will
render all possible assistance for the conclusion of the contracts as referred to above.
6. The Indian Delegation have noted that the Government of the German Democratic Republic are prepared to offer technical assistance
for industrial plants and equipments for planning and executing the projects as well as for installing and putting into operation
of these plants and equipments. The two parties further propose to consult each other from time to time in regard to Indian developmental
projects in respect of which the concerned organisations in the German Democratic Republic may be in,a position to give technical
assistance and to supply equipments.
7. All payments betwen the German Democratic Republic and the Republic of India of a commercial and non-commercial nature will be
effected in non-convertible Indian rupees. Consequently, all contracts, invoices and other respective documents will be made out
in Indian rupees.
For this purpose the Deutsche Notenbank, Berlin, acting on behalf of the Government of the German Democratic Republic will maintain
a "Central Clearing Account G.D.R.-India" , with the Reserve Bank of India, and one or more accounts with one or more commercial
banks in India, authorised to deal in foreign exchange.
The "Central Clearing Account G.D.R.-India" maintained by the Deutsche Notenbank, Berlin, with the Reserve Bank of India
will be used for depositing the rupee holdings of the Deutsche Notenbank, Berlin, with the authorised commercial banks in India,
and for operating the technical credit as mutually agreed.
The Deutsche Notenbank, Berlin, will not be required to pay any charge for the maintenance of the "Central Clearing Account G.D.R.-India".
The accounts maintained by the Deutsche Notenbank, Berlin, with commercial banks in India will be used for carrying out all other
The "Central Clearing Account G.D.R.-India" will be replenished by transfer of funds in Indian rupees from the accounts
maintained by the Deutsche Notenbank, Berlin, with the commercial banks in India. The accounts with the commercial banks in India
will be replenished by transfer of funds from other similar accounts and from the "Central Clearing Account G.D.R.-India".
The payments permitted in accordance with the Indian Foreign Exchange Control laws, rules, regulations and procedures will be effected
on the basis of this agreement to the physical andjuridical persons residing in the German Democratic Republic by the physical and
juridical persons residing in India, by crediting the amount of such payments to the accounts of the Deutsche Notenbank, Berlin,
with the commercial banks in India. Likewise, the payments which are to be effected by the physical andjuridical persons residing
in the German Democratic Republic to the physical andjuridical persons residing in India in accordance with the Foreign Exchange
Control laws, rules, regulations and procedures of the German Democratic Republic will be effected by debiting the accounts maintained
by the Deutsche Notenbank, Berlin, with the commercial banks in India, under the instructions of the Deutsche Notenbank, Berlin.
The Deutsche Notenbank, Berlin, and the Reserve Bank of India will arrange banking details necessary for the implementation of this
8. Any balances in the Rupees Accounts of the Deutsche Notenbank, Berlin, on the expiry of the agreement between the German Democratic
Republic and India of 8th October, 1956, and the Supplementary Arrangements thereto, will on commencement of the provisions of this
agreement be utilised in accordance with the terms of this agreement.
Payments in connection with contracts not executed but concluded during the period of validity of the expiring agreement and the Supplementary
Arrangements thereto, will be effected in accordance with the provisions of this agreement.
9. Any credit or debit balances in the Rupee Accounts of the Deutsche Notenbank, Berlin, will upon expiry of this agreement, be used
during the ensuring year for the purchase of Indian goods or goods of the German Democratic Republic and for the payments of services
rendered to the Party concerned as the case may be. Any balance, outstanding after this period will be settled in such other way,
as may be agreed upon between the two Parties.
10. Both the Parties grant each other most-favoured nation treatment in respect of customs duties and charges on any account imposed
on imports or exports or in respect of methods of lev ing such duties and charges and with respect to rules, y formalities and charges
on connection with customs clearing operations.
The above provisions shall not, however, apply to the grant or continuance of any
(1) advantages accorded by either Parties to contiguous countries for the purpose of facilitating frontier traffic;
(2) preferences or advantages accorded by India to any third country prior to signing of this agreeement;
(3) advantages resulting from any agreement for the establishment of any customs union or tariff free area to which the German Democratic
Republic or India may become a party.
11. Every possible assistance will be given to enable importers and exporters, should they so desire, to utilise ships of the respective
countries for shipping goods that may be imported and exported under the present agreement.
Mercantile ships of both countries while entering, staying in, or leaving the ports of each other's country will enjoy the most favoured
facilities granted by their respective laws, rules and regulations to ships under third countries' flags except concessions given
to ships engaged in coastal trade.
12. It has been agreed that Trade Fairs and Exhibitions will prove to be useful and help to promote trade between India and the German
Democratic Republic. The Party organising the exhibition will be granted all possible facilities in accordance with the laws and
regulations of the country.
13. The Trade Representation of the German Democratic Republic shall be liable in execution of decrees and orders, passed in respect
of only such commercial transactions as are concluded or guaranteed by the Trade Representation. This liability will extend only
to the goods, debt demands and other assets of the Trade Representation directly relatable to the transactions. The Trade Representation
or the Deutsche Notenbank, will not be responsible for transactions concluded without the Trade Representative's or his Deputies'
or the bank's guarantee.
14. In order to facilitate the implementation of this agreement and in order to adopt additional measures for the promotion of bilateral
trade between both the countries, the two Parties will consult each other as and when need arises. For this purpose, if required,
the representatives of both Parties will meet at the request of either Party at a place and time, to be mutually agreed upon, the
meeting being held on a date within 45 days of the request.
15. The present agreement will come into force on 1st January, 1960 and will remain valid for a period of 3 years. The Schedules "A"
and "B" can be amended or renewed by letters exchanged between the two Parties at the beginning of each calendar year.
The agreement can be extended or renewed by negotiations between the two Parties, to be commenced three months prior to its expiry.
The provisions of this agreement unless otherwise agreed upon will continue to be applied after its expiry to all the contracts concluded
in accordance with this agreement.
I shall be grateful if you will kindly confirm that this letter sets out correctly the understanding reached between us.
Sd/- K.R.F. KHILNANI,
Joint Secretary to the Govt. of India and Leader of the Indian Delegation.
Mr. ERICH RENNEISEN,
Leader of the Trade Delegation of the Government of the German Democratic Republic, New Delhi.
GOODS FOR EXPORT FROM THE GERMAN
DEMOCRATIC REPUBLIC TO INDIA
11. Chemicals 3. Chemicals
4. Laboratory chemicals.
5. Soda ash, soda bicarbonate and caustic soda.
6. Textile and leather auxiliaries.
7. Drugs and medicines including sera and vaccines.
8. Plaster of paris for medical use.
9. Crude montan wax.
10. Film material, unexposed, including photographic paper.
111. Rolling Stock
12. Locomotives, diesel and electric.
13. Electrical multiple unit stock (electric coaches) 'IV. Plant and Machinery for Industries
14. Electric furnaces.
15. Equipment for rolling mills.
16. Gas producing furnaces.
17. Grain mills.
18. Grinding machines.
19. Machinery for cigarette industry.
20. Machinery for oil industry.
21. Mining machinery.
22. Plant and equipment for cement production.
23. Plant and equipment for sugar production.
24. Bakery and confectionary machines, various machines for the production of toffees, bonbons and chocolates.
25. Machines and equipment for cheraical and pharmaceutical industries.
26. Equipment and machinery for civil engineering.
27. Printing machinery.
28. Book binding machinery.
29. Road building machinery.
30. Textile machinery and spare parts.
V. Equipment for small scale industries
31. Appliances and equipment for the small scale and domestic industries.
VI. Electrical equipment
32. Accessories for stationary steam engines and power plants.
:13. Diesel aggregates.
34. Electric motors.
35. Petrol and kerosene engines.
36. Stationary diesel motors, diesel motors for ships.
37. Steam engines, other than locomotives.
39. Electrical equipments, fittings and accessories.
VII. Other equipments
40. Air-compressors with diesel drive and electric drive.
4 1. Air-conditioning equipment and machinery.
42. Cranes, all varieties.
43. Drilling and milling machines.
44. Lathes (facing lathes, vertical turret lathes, turret lathes,and sundry tool machinery).
45. Conveying equipment, including passenger lifts.
46. Pneumatic tools, electric tools, household implements.
47. Pumps driven by diesel motors or electricity.
48. Refrigerating machines.
49. Refrigerator vans.
50. Short and long shape planers.
51. Tractors with spare parts.
52. Ventilation equipments.
53. Water purifying equipment.
54. Welding machines.
55. Electro-medical apparatus.
50. Sound recording equipment.
57. Studio and cinematographic apparatus and equipments.
58. Telegraph and telephone equipment.
59. Wireless communication equipment.
60. Agricultural machinery.
61. Wood-working machinery. VIII.Manufacturedgoods
63. Writing and printing paper.
64, Household glassware. IX. Miscellaneous items
66. Office Machines (portable and miniature type-writers, calculating machines, accounting machines).
66. Apparatus and instruments for medicines and dentistry.
67. Clinical thermometers
68. Measuring and testing appliances.
69. Musical instruments and accessories.
70. Optical and scientific instruments and appliances.
71. Photographic cameras and lenses.
72. Jena laboratory and technical glass.
73. Laboratory glasswares.
75. Cinematographic films, exposed.
76. Educational toys and aids.
77. Hunting weapon and ammunition.
78. Sanitary earthenware.
79. Wall tiles.
80, Ceramics (technical ceramics and earthen ware).
81. Decorative and household procelain.
82. Sundry papers and cardboard manufactures.
83. Sundry textile products.
GOODS FOR EXPORT FROM INDIA TO THE GERMAN DEMOCRATIC REPUBLIC
1. Fruits, dried.
2. Fruits, canned.
3. Fnnts, fresh.
4. Cashewnuts and other nuts.
5. Jams, chutaies and pickles.
7. Other spices.
8. Fruitjuices and squashes.
9. Oil cakes, expeller and de-oiled.
11. Cocoa beans.
12. Gum tragacanth.
13. Frozen meat.
14. Frozen fish and prawns.
11. Beverages and tobacco
18. Tobacco and cigars.
III. Crude materials, inedible
20. Gums and resins.
21. Hides and skins, raw, semi-processed and tanned.
22. Raw fi-irs.
23. Cashew shell oil.
24. Turpentine oil, crude.
25. Bees wax and other insect waxes, crude.
26. Cotton raw, cotton waste, cotton linters.
27. Hemp, raw.
28. Silk waste.
29. Wool, raw or washed.
30, Wool waste.
32. Coir, fibres, yarn and other products.
33. Palm fibres and yarn.
34. Animal bristles and hair.
35. Vegetable fibres for brushes and brooms.
37. Jute, raw.
IV. Minerals and allied materials
38. Mica and micaceous wastes.
40. Chrome ore.
42. Iron ore.
43. Kyanite ore.
44. Manganese ore.
46. Manganese dioxide.
47. Pig iron.
48. Ferro manganese.
49. Silver and silver concentrate.
V. Animal and vegetable oils and fats
50. Shark oil.
51. Vegetable oils (non-essential) including linseed oil, groundnut oil, cotton oil, castor oil etc.
52. Soap stone.
53. Essential oils.
64. Crushed bones.
55. Animal albumen.
56. Tanning substances including myrobalan, myrobalan extracts and catechu.
58. Boric acid.
59. Magnesium chloride.
60. Liquid chlorine.
61. Hydrogen peroxide.
62. Pharmaceutical glycerine.
63. Technical glycerine.
64. Napthtalene raw
66. Drugs, medicines and medicinal herbs.
VII. Manufactured goods classified chiefly by materials
66. Leather and Leather manufactures.
68. Cotton piecegoods, cotton yams.
69. Jute manufactures.
70. Silk fabrics (silk and art silk fabrics).
71. Woollen fabrics.
72. Cordage and ropes.
73. Other textile products.
74. Sports goods.
75. Light engineering goods.
77. Textiles machinery and accessories.
78. Indian handicrafts and cottage industry products, e.g. handloom, (cotton and silk), aitistic silver, brass and bidri products,
ivory articles, wood carvings, etc.
IX. Miscellaneous items
79. Animals, living including wild animals.
81. Sundry timbers.
82. Bird feathers.
83. Cinematographic films, exposed.
84. Precious stones and semi-precious stones, cut and polished including diamonds.
85. Printed matters including books and periodicals.
86. Troca shells and other shells.
87. Electric motors and pumps.
88. Diesel engines stationary.
89. Vehicular diesel engines.
90. Storage batteries.
91. Dry batteries.
92. Gaskets (Metallic as well as non-metallic).