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Budapest, 3 March 1971

The Government of INDIA



NOTING with satisfaction the successful development of economic and trade relations between the two countries;

DESIROUS of further increase and diversification in trade and of further expansion and strengthening of economic cooperation between the two countries;

HAVE agreed as follow :

Article I

Both Governments will, in every possible way, develop and strengthen the trade and economic relations between the two countries on the basis of equality and mutual benefit. They will study and with utmost goodwill take decisions on the suggestions which either of them would like to present for the consideration of the other with purpose of achieving closer trade and economic relations.

Article II

During the period of validity of this Agreement, the total value of imports will be equal to the total value of exports effected by either country. For this purpose, and for periodic reviews imports and exports whether on deferred payment terms or on cash basis relating to the contracts concluded and to be concluded on the basis of this and earlier Indo-Hungarian Trade Agreement, as well as all payments of a non-commercial nature, will be taken into account as and when payments are made.

Article III

(i) Both Government will accord, upon importation and exportation of goods from one country to the other all possible assistance and maximum facilities allowed by their respective laws, rules and regulations.

(ii) Both Government shall accord to each other’s trade most favoured –nation treatment in
respect of custom duties and charges of any kind imposed on imports or exports, or in
connection therewith, in respect of the methods of levying such duties and charges and in
respect of rules, formalities and charges in connection with customs clearing operations,
and with respect to the application of internal taxes or other charges of any king imposed
on or in connection with imported goods.
(iii) Both Government will accord to each other in respect of the issuance of import and export licenses or permission where such licenses/permission are prescribed under their regulations treatment no less favourable than that ranted to any other country.

Article IV

Any advantage, favour, privilege or immunity granted by either of the Government to import or export any product originating in the territory of a third country or lined for its territory, shall be accorded territory of wither of the countries or destined to be imported into its territory.

Article V

The provisions of Articles III and IV shall not, however, apply to the grant or continuance of any :

(a) advantages which are or will be accorded by wither Governments to contiguous
countries for the purpose of facilitating frontier trade;

(b) preferences or advantages accorded by India or Hungary to any third country and existing on Ist January 1968 or in replacement thereof;

(c) advantages granted under any agreement concerning the expansion of trade and economic cooperation among developing countries in or outside the region in pursuance of trade development and liberalization programs to which India is or may become o party, and which is in keeping with the relevant portion of General Principle VIII of UNCTAD I.

Article VI

Juridical and physical persons of either Government shall enjoy the most-favoured-nation treatment in respect of personal protection and protection of property when effecting commercial activities in the territory of the other provided that the enjoyment of this treatment shall be subject to the laws and regulations of such other Governments which are generally applicable to all foreigners alike.

Article VII

The export of goods from India to Hungary and from Hungary to India during the period of validity of this Agreement will be carried out in accordance with the attached Schedule “A” (List of goods available for export from Hungary to India) and Schedule “B’ (List of goods available for export from India to Hungary) which constitute an integral part of present Agreement. The Schedules can be extended or altered from time to time as may be agreed upon between both Government.

Article VIII

The import and export of goods stipulated in Article VII will be carried out in accordance with the export, import and foreign exchange regulations in force, from time to time in either country and on the basis of contracts to be concluded between the Indian physical and juridical persons including Indian State- owned Organizations on the one hand and the Hungarian Organizations duly authorised under the Hungarian laws to carry on foreign trade activities as juridical persons on the other.

Article IX

The goods so exported from India to Hungary and from Hungary to India are meant for use in Hungary and India, respectively, and shall not be re-exported to any other country.

Article X

1. All payment of a commercial and non-commercial nature including sea freight and other expenses connected therewith between physical and juridical persons residing in India and physical and Juridical persons residing in Hungary as well as any other payments between the two countries on which agreement will be reached between the Reserve bank of India and the National Bank of Hungary will be effected in non-convertible Indian rupees.

2. For the purpose of effecting the afore-mentiond payments :

(a) The National Bank of Hungary will continue to maintain a Central Account with the Reserve Bank of India, while the National Bank Hungary and or the Hungarian Foreign Trade Bank Limited will maintain one or more account (s) with one or more commercial bank (s) in India authorised to deal in foreign exchange.

(b) The Central Account will be used for depositing rupee balances and for replenishing the accounts with commercial bank(s), while accounts with commercial bank (s) of a commercial and non-commercial nature.

3. (a) The Central Account will be replenished by transfer of funds from the account (s) with commercial bank (s) and by receipts on account of technical credit.

(b) The accounts(s) with commercial bank (s) will be replenished by transfer of funds from other similar accounts (s) and from the Central Account.

. (c) The Central Account mentioned in (2) Above will be operated upon by the National Bank of Hungary while the accounts with the commercial bank (s) will be operated upon be the National Bank of Hungary and. ……/…… or the Hungarian Foreign Trade Bank Limited, as the case may be.

4. (a) Payments permitted under the Hungarian Exchange Control Laws to be made by the residents of Hungary to the residents of India will be effected by debiting the amount of such payments to the said accounts with Indian commercial bank (s).

Payments permitted under the Indian Exchange Control Laws to be make by the residents of India to the residents of Hungary, will be effected by crediting the amount of such payments to the above-mentioned accounts with Indian commercial bank(s).

The details in regard to the procedure for the procedure for the operation of the Central Account have been mutually agreed upon between the Reserve Bank of India and the National Bank of Hungary.

Any balances in the Rupee Accounts of the National Bank of Hungary or any debt of the National Bank of Hungary in connection with the grant of technical credit will upon expiry of this Agreement, be used during the ensuing 12 months for the purchase of Indian or Hungarian goods, as the case may be. After the expiry of this period of 12 months, any balances outstanding will be settled in such a way as may be agreed upon between the two Governments.

Payments arising from contracts concluded during the validity of the Agreement and falling due after the expiry of the Agreement shall be effected in non-convertible Indian rupees, which will be utilised for the purchase of Indian or Hungarian goods, as the case may be. The period of 12 months referred to in para 6 above shall be counted from the date the said payment is made.

Article XI

Both Governments agree to encourage the fullest possible utilisation of the vessels owned or chartered by the shipping organisations of the two countries for shipping cargoes imported or exported under this Agreement , on the basis of world competitive freight rates and conditions.

1. Mercantile shops of either country with or without cargoes therein will, while entering, staying in or leaving the ports of the other country enjoy the most-favoured facilities granted by their respective laws, rules and regulations to ships under third countries’ flags. This principle shall not, however, apply to ships engaged in coastal navigation.

Article XII

In order to facilitate the implementation of this Agreement, the two Governments agree to consult each other at the request of either Government in as short a time as possible, but not later than forty-five days from the date of the receipt of the request in respect of matters connected with trade and payments between the two countries.

Article XIII

The legal capacity and disposing power of the individual and legal persons of India as well as those of Hungarian People’s Republic shall be judged in conformity with the laws of the state of which they are the citizens or according to the laws by which they have been formed. The natural and legal persons of both Governments shall have the right to act either as plantiffs of as defendants before the courts of Justice of the other country.

For the meeting of an obligation assumed by natural and or legal persons of the two Governments, other natural legal persons can only be made liable on the basis of a definite legal provision to this effect or of an explicitly written undertaking of an obligation. Accordingly for the liabilities of any State-owned undertaking or other legal persons in the absence of specific proviso, neither the State nor any of its organ, undertaking of legal person shall be held responsible.

Article XIV

The physical and juridical persons of India and the physical and juridical persons of Hungarian People’s Republic may agree that legal disputes arising from contracts concluded in commercial or other economic matters shall be referred to arbitration. The arbitration agreement must be made out in writing. Such an agreement shall bar the jurisdiction of the courts of the two counties.

Article XV

In order to expand and diversify mutual trade, both governments agree to facilitate increasing contacts between the Indian and the Hungarian trading as well as manufacturing and actual user organisations through exchange of visits, participation in fairs and exhibitions, and supply of information and encouraging mutual cooperation in studying each other’s requirements and consumer preferences.
Article XVI

The two Governments will endeavour to promote close cooperation in the field of science and technology between the two countries. They also agree that periodic discussions should take place between both sides for identifying new avenues of industrial cooperation and for securing development of resources as well as fuller utilisation of existing and creation of additional production facilities in either country on a mutually beneficial basis with a view to bringing about further growth and diversification in the bilateral trade exchanges.

Article XVII

The two Governments agree to promote collaboration between industrial and trading enterprises in the two countries for the purpose of pooling together their resources and expertise for joint marketing in their countries and for meeting the needs of industrial development programmes in third countries on the basis of mutual cooperation.

Article XVIII

The present Agreement is in supersession of the earlier long-term Trade and Payments Agreement signed between the Government of India and the Government of the Hungarian People’s Republic in New Delhi on the 22nd November, 1963 and valid upto 31st December, 1970.

Contracts concluded in accordance with the provisions of the Trade and Payments Agreement between India and the Hungarian People’s Republic signed on 22nd November, 1963, but not implemented by the date of its expiry, i.e., on 31st December, 1970, will be deemed to be implemented thereafter in accordance with the provisions of the Trade and Payments Agreement signed today.

The present Agreement shall come into force on 1st January, 1971 with retrospective effect and shall remain in force till 31st December ,1975. Upon the expiry of this period this Agreement may be extended or renewed by mutual consent between the two Governments. Unless either Governments notifies the other in writing of its intention to terminate the Agreement at least 90 days prior to its expiry, the Agreement shall automatically remain in force for a further period of one year.

DONE at Budapest on 3rd March 1971 in two originals in the English language, both texts being equally authentic.

Sd/- Sd/-

On behalf of the On behalf of the
Government of India Government of the
Hungarian People’s Republic.



1. Power stations
2. Back pressure and extraction type turbo sets
3. Synchronous condensers
4. Equipment for air-cooled system “Heller” type
5. Equipment for poultry farms and poultry processing machinery
6. Complete flour mills of 20, 30, 50 and 100 tons capacity as well as flour milling machinery
7. Different types of aggregates
8. Ammonia compressors and equipment for ice factories and refrigerating plants
9. Food canning factory equipment
10. Seamless tube mill and push benches
11. Plant for manufacturing gas cylinders
12. A.C.S.R. conductors manufacturing plant
13. Morphine, alkaloid manufacturing plant
14. Acetylene manufacturing plant
15. Oxygen gas manufacturing plant
16. Fully automatic and semi-automatic hollow glass factory
17. Plants and equipment for the manufacture of different kinds of glass
18. Splinter-proof safety glass plant
19. Glass insulating material manufacturing plant
20. Ampoule manufacturing plant
21. Plant for manufacture of pre-fabricated and prestressed concrete railway sleepers and pre-stressed concrete elements, like poles, beams, etc..
22. Electrode manufacturing plant
23. Plant for manufacturing detonators (for mines)
24. Brick manufacturing plant (mobile unit)
25. Injection needles and syringes manufacturing plant
26. Complete vacuum technical plant
27. Machinery for manufacturing different kinds of lamps and components
28. Spring washers manufacturing plant
29. Bakelite electrical goods manufacturing plant
30. Plant for manufacturing balances and scales
31. Cutting tools and drop gorged tools manufacturing plant
32. Wire-netting manufacturing plant
33. Mechanical toys manufacturing plant
34. Locks and padlocks manufacturing plant
35. Continuous saponification plant
36. Ball bearing reconditioning plant
37. Complete girders (steel structure)
38. Mobile radio transmitters-receivers system FM power output from I to 10 W for transmission distance of 5 to 50 kilometers
39. Broadcasting transmitters system AM with 5, 15, 50. 100 and 150 Kw power output for medium and short waves
40. Broadcasting transmitters system FM with power output from 0.25 to 3 K.W. with high frequency range.
41. Microwaves radio, links type PM 24e-28, providing 22 radio- telephone channels with Pulsephase modulation
42. Railway safety signalling equipment
43. Pumps and pump stations for irrigation and drainage
44. Different sizes of water turbines (Mignon turbines) partly in collaboration
45. Diesel electric and hydraulic locomotives, Diesel rail cars, sleeping and dining cars and spare parts
46. Machinery and equipment for mines, including rock bits, mine hoists/winders, mine telephone and mine signalling equipment, crushing and classifying equipment
47. Complete ore and mineral dressing plants
48. Cranes and various equipment for ports
49. Various railway, industrial and other balances an weighing bridges
50. Geophysical prospecting and drilling equipment
51. Aerial ropeways and transport machinery
52. Special types of electric industrial furnaces and foundry equipment
53. Various floating cranes from 5 to 150 tons
54. Cargo, ships, coastal vessels and accessories
55. Machinery and equipment for the chemical and pharmaceutical industries
56. Machinery of the building industry
57. Glass-lined equipment and machinery
58. Machine tools
59. Tractors and spare parts
60. Insulators
61. Wire drawing and cable manufacturing machines
62. Diesel engines and generating sets
63. Machines for plastic industry
64. Water and irrigation pumps
65. Compressors (stationery and mobile) diesel and electrically driven
66. Gas producing plants
67. Machinery for meat industry
68. Electrostatical dye spraying equipment
69. ACSR cables and conductors
70. Transmission line fitting and accessories
71. Vibration dampers
72. Lightning Arrestors
73. Electric motors, low voltage and high voltage and metal clad switchgears
74. Are welding sets
75. Film projectors and other cinema equipment
76. Television spare ports and televisions studio equipment
77. Optical lenses and other precision goods
78. Electric supply meters and components
79. X-Ray apparatus for medical and industrial purposes
80. Radio receiving and transmitting valves and radio spare parts
81. Mercury vapours, film studio and projector lamps
82. Photo-electric tubes and accessories
83. Geodetic instruments and spare parts and components
84. Optical instruments and spare parts and components
85. Electric and electronic instruments and spare parts
86. Laboratory equipment and instrument
87. Medical and surgical instrument and hospital equipment
88. Material testing instruments for textile and other industries
89. Meteorological instrument
90. Woodworking machines
91. Hardware, card clothing, sewers, show-tacks, nails
92. Electric and blasting machines and accessories for the mining industry
93. Spare parts for motor-cycles
94. Dumpers and spare parts
95. Garage equipment/Diesel and electric testing benches
96. Gas cylinders
97. Rolled steel products
98. Ball, roller and tapers bearings
99. Seamless steel tube
100. Hard metal tips and drawing dies
101. Pharmaceutical products, intermediates and raw materials
102. Laboratory chemicals and reagents
103. Medical herbs
104. Sera and vaccines
105. Essential oils
106. Dyestuffs, intermediates for the textile, paints and rubber industries
107. Rubber goods of different types
108. Industrial explosives
109. Organic and inorganic chemicals
110. Photographic materials
111. X-Ray films
112. Oils and mining products, i.e. lubricating oils, basis refractory bricks and electrocast glass tank blocks, aluminum fluoride etc.
113. Oil cloth
114. Cotton and rayon yarn
115. Sinking of shaffs and related mining operations on contract basis
116. Engineering consultations, training of experts, etc.
117. Caprolactam and other synthetic fibers and yarns
118. Miscellaneous goods such as feature films, documentaries, books and periodicals, camping beds, manicure sets, educational appliances, etc.
119. Equipment for aluminum plants and aluminum smelters.
120. Complete units for the production of aluminum and aluminum metal
121. Railway brakes of different types
122. Equipment for restaurants and buffets
123. Water buses
124. Machinery, equipment and technical know-how for underground construction



I. Foods
1. Fruits, fresh and vegetables
2. Cashew kernels
3. Walnuts and walnut kernel
4. Pepper
5. Other spices
6. Oil cakes (de-oiled)-groundnut, rice bran and other oil seeds
7. Animal feed compounds
8. Tinned fish and prawns
9. Shark liver oils
10. Groundnuts H.P.S.
11. Animal casings
12. Fish meal

II Beverages and Tobacco
13. Tea
14. Coffee
15. Tobacco
16. Instant tea
17. Instant coffee

III Crude Materials, Inedible
18. Shellac (all kinds) and shellac based products
19. Hides and skins, raw, semi-processed and tanned
20. Finished leather
21. Essential oils
22. Coir yarn/coir manufactures
23. Palmyra fiber
24. Coir and sisal ropes for ships
25. Gum Karaya and guar Gum
26. Bengal Deshi Cotton
27. Cotton yarn below 40 counts
28. Cotton waste
29. Cotton Linters
30. Tanning agents like myrobalan extract
31. Crushed bones

IV Mineral and Allied Materials
32. Mica and mica based products
33. Iron ore
34. Manganese ore
35. Kyanite
36. Sillimanite
37. Steatite
38. Llmenite
39. Dead burnt magnesite
40. Ferro-manganese and ferrochrome

V. Vegetable Oils
41. Castor oil
42. Cotton seed oil
43. Linseed oil etc
44. Groundnut oil

VI Engineering Products
(a) Ferrous manufactures
45. Grey Iron, Malleable Iron, Spherical Iron and Machinate Iron castings
46. Cast Iron pipes and specials
47. Carbons and alloy steel castings
48. Carbon and alloy steel forging
49. Steel pipes and tubes and fitting there of
50. Bright steel bars and shafting
51. Fabricated steel structural including transmission towers and hydraulic structural
52. Railways track fastens, fittings and accessories
53. Wire rope and strand
54. Steel fasteners, all types, including woods screws, machines screws, bolts, nuts and rivets split pins cotter pins, wire nails and the like
55. Builders hardware
56. Mild steel are welding electrodes
57. Ferrous manufactures n.o.s

(b) Other Engine Items
58. Aluminum semis, extrusions and fabrications including AAC, ACSR and insulated cables with aluminum conductors
59. Machine tools and metal working equipment
60. Small cutting can hand tools
61. Internal combustion engines including diesel engines, pumps and compressors and parts and components thereof
62. Industrial machinery of the manufacture of sugar, paper, textiles, cement and chemicals and parts, components, accessories and ancillaries thereof
63. Asbestos cement sheet manufacturing plant and accessories
64. Sewage and water treatment plant
65. Cranes, hoists and lifts
66. Mining and benefaction lands for minerals
67. Constriction machinery
68. Plastic processing machinery
69. Motor vehicles and vehicular components, parts and ancillaries thereof
70. Bicycles and bicycles components
71. Railway wagons and coaches
72. Train lighting and railway signalling equipment
73. Data processing machines and copying machines
74. Sewing machines and components
75. Knitting machines and components
76. Dry and storage batteries
77. Electrical wiring accessories and lighting fitting
78. Electrical generators, transformers, motors, circuit breakers, switch gears and control gears
79. Electric lamps, incandescent and fluorescent
80. Electrical and electronic instruments
81. Electrical appliances
82. Radio receivers and electronic components
83. Telecommunication equipment
84. Refrigeration, air-conditioning, ventilation and humidification equipment
85. Electric fans and components
86. Carbide petrol metering and dispensing pumps
87. Diamond drills and bits
88. Crown corks, aluminum capsules and pilfer proof caps

VII Other Manufactured Goods
89. Cotton textiles
90. Woollen textiles
91. Woollen knitwear
92. Cotton knitwear
93. Other mixed fabrics
94. Ready-made garments
95. Nylon socks
96. Jute goods including jute canvas and jute tarpaulin
97. Cigars and cigarettes
98. Linoleum and other synthetic leather materials
99. Leather footwear and leather manufactures
100. Sports goods
101. Pains, varnishes, enamels and lacquers
102. Plywood and walnut veneers
103. Spectacle frames
104. Plastic manufactures
105. PVC floor tiles
106. Synthetic resins such as Alkyd Phenolic, Maleic, Malamine formaldehide and PVC emulsion
107. Decorative phenolic laminates
108. Automobile tyres and tubes
109. Rayon tyre cord
110. Thermos flasks
111. Wired and figured glass
112. Human and animal hair and bristles
113. Collapsible tubes
114. Graphite electrodes
115. Enamel ware
116. Polythelene
117. Polyterne
118. Sanitary fittings

VIII. Handicrafts

119. Indian handicrafts and cottage industry products i.e. hand – loom (cotton and slid), artistic silver ware, copper and brass ware, birdie products, wood carvings, ivory products, etc.

IX Chemicals, Pharmaceuticals and Allied Products
120. Organic and inorganic Chemicals
121. Toiletries and cosmetics
122. Synthetic tergents
123. Rubber chemicals
124. Dyes
125. Pharmaceuticals/Semi-products thereof
126. Medicinal herbs

IX Miscellaneous
127. Asbestos cement products
128. Stationery articles
129. Surgical instruments and hospital appliances
130. Books and periodicals
131. Films, cinematographic and exposed
132. Topioca
133. Gramophone records

India Bilateral

Ministry of External Affairs, India

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