New Delhi, 25 January 1965
The Government of India and the Government of the Union of Soviet Socialist Republics,
PROCEEDING from the relations of friendship and close co-operation existing between India and the USSR, and
GUIDED by mutual desire for further developing and strengthening economic and technical co-operation,
HAVE concluded the present Agreement on the following :
The Government of India and the Government of the Union of Soviet Socialist Republics will co-operate in the construction of an Iron
and Steel Works at Bokaro with a capacity of 1.5 to 2 million tonnes of steel per year with provision for expansion of the capacity
of the works to 4 million tonnes of steel per year. A list of the main shops and departments of the Works is given in Annexure I
to the present Agreement.
With this in view, the Government of the Union of Soviet Socialist Republic shall extend to the Government of India a credit up to
190 million Roubles bearing 2.5% interest per annum and out of this credit shall render technical assistance to India for the construction
of the said Iron and Steel Works.
For the purpose of rendering the technical assistance stipulated in Article 1 of the present Agreement, the Soviet organization
1. Prepare the detailed Project Report for the construction of the Works within nine months from the date of the signing of the
contract for the execution of the designing work. The scope of the detailed Project Report is given in Annexure II to the present
2. Prepare the working drawings for the construction of the Works within the scope and the time to be determined by the Soviet
and Indian organizations. The organizations of the parties shall, within two months from the date of the acceptance of the detailed
Project Report by the Indian party, agree upon a division list of the working drawings to be done by the Indian and Soviet organizations.
It is understood that . the detailed Project Report shall be prepared for the Works with a capacity of 4 million tonnes of steel
per year and the working drawings shall be prepared for the complex of shops and units for production of 1.5 to 2 million tonnes
of steel per year.
The technical documents handed over by the Soviet organizations to the Indian organizations shall be used by the latter exclusively
at enterprises in India. Such documents shall not be transferred to any foreign physical or juridical entities without prior consent
of the Soviet organizations thereto.
3. Deliver to India during 1966-69 the equipment and materials which are not available in India.
4. Render assistance to the Indian organizations in :
- the construction of the Works by carrying out;
- the designersí supervision and by providing the advisory services during construction;
- the erection, adjustment and commissioning of the equipment.
For these purposes, Soviet specialists shall be deputed to India in number, specialities, for the periods and on the terms and conditions
to be agreed upon between the organizations of both parties.
5. Recommend to the Indian organizations schemes and programmes of industrial and technical training of Indian nationals with the
view of training specialists and skilled workers required for the operation of the said Works.
6. Depute Soviet specialist-instructors, in number and for periods to be agreed upon with the Indian organizations, for rendering
assistance in the training of specialists and skilled workers in India for the operation of the Works.
7. Receive in the USSR India specialists and skilled workers, in number, specialities and for periods to be agreed upon between the
organizations of both parties, for industrial and technical training at the appropriate enterprises.
For the purpose of implementation of the co-operation mentioned in Article 1 of the present Agreement, the Indian Party shall :
1. Furnish to the Soviet organizations all the initial data required for the designing of the Works on the site selected by the
2. Consider the detailed Project Report of the Works within two months from the date of its submission by the Soviet organizations
and approve it with such modifications, if any, as may be agreed upon between the parties.
3. Prepare reports on and working drawings for all the facilities located outside the Iron and Steel Works site, which are necessary
for its normal operation, e.g. the townships, power and water supply, ore mines and quarries, the ropeways for the transport
of coal, sewerage system, marshalling yards, etc..
The data for these outside facilities shall be prepared by means of mutual consultations between the two parties to the extent necessary.
For these purposes, the Soviet organizations shall, at the request of the Indian organizations, depute Soviet specialists to India
on such terms and conditions as may be agreed upon by the organizations of the two parties.
4. Ensure preparation by the Indian organizations of the working drawings of various units located within the boundary of the
Iron and Steel Works, the list of these units being agreed upon between the Indian and the Soviet organizations. The Indian Party
will be responsible for the conformity of the working drawings of such units prepared by the Indian organizations to the requirements
of the detailed Project Report.
5. Purchase in third countries, as may be agreed upon between the parties, some equipment and materials which are not manufactured
in India and in the USSR.
6. Execute all the construction and erection work necessary and provide, all facilities and services for such construction and erection
in accordance with the recommendations, advice and requirements of the Soviet organizations concerned.
7. Purchase licences for technological processes and equipment, wherever necessary.
The Indian and Soviet Parties shall promote maximum possible participation of the Indian organizations in carrying out the designing
work and in the supply of equipment and materials for the construction of the Works.
For the purpose of establishing direct contact with the administration of the Works under construction and for prompt and effective
solution of all the problems which may arise, the Soviet organizations shall set up a Representation of the supplier in the construction
area of the Works.
The Soviet organizations shall, at the request of the Indian Government, render assistance to the Indian organizations in attaining
the designed capacities and operation of the said Iron and Steel Works by deputing Soviet specialists, delivering spare parts and
necessary materials on terms and conditions to be additionally agreed upon between the two parties.
The credit to the amount upto 190 million roubles envisaged in Article 1 of the present Agreement (one Rouble contains 0.987412 grams
of fine gold) shall be used by the Government of India starting from the 1st January, 1966 in payment for :
- the designing work carried out by the Soviet organizations;
- the equipment and materials which are not available in India and delivered from the USSR c.i.f. Indian. ports when carried by Soviet
ships and f.o.b. Soviet ports when carried by Indian ships,
Prices for the equipment and materials shall be fixed on the basis of the world market prices;
- the expenses connected with deputing Soviet specialists to India for rendering technical assistance in the establishment of
the Works envisaged by the present Agreement, except for expenses within the territory of India which will be reimbursed by the
Indian party in rupees; - the expenses connected with the stay in the USSR of the Indian nationals sent for technical and industrial
training at the corresponding enterprises in the USSR.
Should the costs of the supplies and services of the Soviet organizations for rendering technical assistance in the establishment
of the Works envisaged in Article 1 of the present Agreement exceed the amount of the said credit, the amount of such excess shall
be repaid by the Indian party by the deliveries of Indian goods to the USSR on the terms and conditions of the Indo-Soviet Trade
Agreement in force. The nomenclature and quantity of such goods shall from time to time be agreed upon between the parties.
In case of any change of the gold parity of Rouble indicated in the present Agreement, the sums of the credit evaluated in Roubles
(the utilized and unutilized part of the credit, balance of arrears on the principal and on the interest accrued thereon but not
yet paid) shall be recalculated in accordance with such change. Reimbursement of the expenses of the Soviet organizations connected
with rendering all kinds of technical assistance to the Indian organizations within the period up to January 1st, 1966, shall be
effected by the Indian Party in accordance with the Indo-Soviet Trade Agreement in force.
The Government of India shall each calendar year repay utilized parts of the credit extended under the present Agreement during 12
subsequent years in equal annual instalments paid up to or on October 15th of each year starting from the year following the year
during which the corresponding part of the credit has been utilized.
Interest on the credit shall accrue from the date on which the corresponding part of the credit has been utilized and shall be paid
during the first three months of each year following the year during which it accrued, the final payment being effected simultaneously
with the final payment of the principal.
The date of the utilization of the credit for making payments for the equipment and ;materials shall be considered the thirtieth day
from the date of the Bill of Lading and for the expenses incurred in connection with deputing Soviet specialists to India and other
expenses to be covered from the credit - the last day of each three month period during which these expenses were incurred.
The Government of India has the right to repay the principal and pay the interest on the credit ahead of the due date of payment.
Repayments of the credit and payment of the interest accrued thereon shall be effected in Indian Rupees (one Indian Rupee contains
0.186621 grams of fine gold) to a special account to be opened with the Reserve Bank of India, Bombay, in favour of the Bank for
Foreign Trade of the U.S.S.R.
Conversion of Roubles into Rupees shall be effected on the basis of the above mentioned gold content of Rouble and Rupee.
The amount credited to the said account may be used by the Soviet organizations for purchasing the goods in India in accordance with
the Indo-Soviet Trade Agreement in force and/or may be freely converted into pounds sterling.
In case of any change of the gold parity of Indian Rupee, which at present contains 0.186621 grams of fine gold, the Ministry of Finance
of India and the Bank for Foreign Trade of the USSR shall recalculate the balance of the special account in proportion to such change.
For the purpose of keeping records of the utilization and repayment of the credit extended under the present Agreement and payment
of the interest accrued thereon, the Ministry of Finance of India on behalf of the Government of India and the State Bank of the
USSR on behalf of the Government of the USSR shall keep special credit accounts and shall jointly establish the technical procedure
for keeping the said accounts and the settlement of the credit.
The Government of India shall reimburse the Soviet party for the expenses of the Soviet organizations incurred in connection with
the stay of Soviet specialists in India, beginning from January 1st, 1966, in Indian Rupees by crediting the corresponding amounts
to the special account indicated in Article 9 of the present Agreement.
The Soviet organizations shall guarantee that :
1 The detailed Project Report of the Works, prepared by the said organizations, shall conform to the production capacity stipulated
in the present Agreement.
2 The equipment delivered by the Soviet organizations shall be in conformity with the above said detailed Project Report.
3 The performance of the equipment shall be in accordance with their stated capacities.
The periods of the guarantees, the order of their fulfilment and other conditions shall be provided in the contracts to be concluded
in accordance with the present Agreement.
The conditions of the fulfilment of the commitments of the Soviet organizations under the present Agreement shall be determined in
the corresponding contracts to be concluded between the Indian and Soviet organizations.
The Soviet organizations shall furnish to the Indian organizations within one month of the acceptance of the detailed Project Report
offers in the form of a draft contract for the supply of equipment and materials.
The contracts for the supply of equipment and materials shall be concluded within two months from the date of submission of the corresponding
offers by the Soviet organizations.
The Soviet organizations may co-operate in carrying out the designing work, the deliveries of equipment and in the implementation
of other forms of technical cooperation for which the Soviet Party is responsible, with the corresponding organizations of third
countries, but in case the need arises for deputing specialists to India from the said third countries, the Soviet organizations
shall obtain prior consent of the Indian party thereto.
The Indian and Soviet organizations shall exchange all the information and render assistance which may reasonably be required by either
party in relation to the present Agreement and shall in particular furnish each other with progress reports and other information
as may be required in regard to the programme of work for the construction of the Iron and Steel Works mentioned in Article 1 of
the present Agreement and other matters connected therewith:
The Government of India and the Government of the USSR shall in the shortest possible time after signing the present Agreement inform
each other of the corresponding Indian and Soviet organizations to be authorized for the implementation of the present Agreement;
it is hereby understood that the said Governments may authorize one or several organizations.
Should it be found necessary subsequently to substitute the organizations authorized for the implementation of the present Agreement,
such substitution shall be deemed possible.
The Government of India and the Government of the USSR reserve the right to transfer any or all rights and liabilities arising out
of the present Agreement to such Indian and Soviet organizations as the respective Governments may consider necessary.
In case the performance of the present Agreement is infringed for a certain period of time as a result of war, hostilities, embargo,
blockades or any other contingency beyond the control of either party, the representatives of the Government of India and the Government
of the USSR shall immediately consult with each other and come to an agreement with regard to the measures to be taken and if such
agreement cannot be reached within a reasonable period of time, the Indian organizations may complete the designing and construction
of the aforesaid Works in the order which may be considered necessary, but even in this case the rights and liabilities of the parties
arising from the present Agreement prior to that moment shall remain in force.
In case of any disagreement between the Indian and Soviet organizations on any matters arising from or connected with the implementation
of the present Agreement, the representatives of the Government of India and the Government of the USSR shall immediately consult
with each other and endeavour to reach a mutual settlement of such disagreement.
All correspondence on the matters connected with the implementation of the present Agreement shall be in English.
The present Agreement shall come into force on the date of its signing.
DONE on this twenty fifth day of January, 1965, in New Delhi in two original copies, each in the Hindi, Russian and English languages,
the texts in Hindi and Russian being equally authentic and the English text being the operative one.
On behalf of the
Government of India
On behalf of the Government of the
Union of Soviet Socialist Republics