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AGREEMENT BETWEEN THE GOVERNMENT OF INDIA AND THE ROYAL GOVERNMENT OF BHUTAN REGARDING TRADE AND COMMERCE [1972] INTSer 2

AGREEMENT BETWEEN THE GOVERNMENT OF INDIA AND THE
ROYAL GOVERNMENT OF BHUTAN REGARDING TRADE AND COMMERCE

Thimphu, 17 January 1972

The Government of INDIA

And

The royal Government of Bhutan,

CONSCIOUS of the age-old ties between India and Bhutan and animated by desire to strengthen them,

RECALLING Article V of the treaty of Perpetual Peace and Friendship between India and Bhutan, 1949, which provides for free trade and commerce between their territories,

CONVINCED of the benefits which can accrue to their people from the expansion of trade and from collaboration in economic development,

HAVE in furtherance of the said Article of the Treaty,

AGREED as follows :

Article I

There shall, as therefore, be free trade and commerce between the territories of the Government of India and of the Royal Government of Bhutan.

Article II

The two Governments will, in agreement with each other, identify the areas of co-operation and complementarily in their agricultural, industrial and commercial plans, with a view to further the economic development of Bhutan.

Article III

The Government of India agree to provide, as appropriate, technical and financial assistance to the Royal Government of Bhutan for the development and diversification of Bhutan’s economy.

Article IV

(1) The king of Bhutan will continue to enjoy freedom from import duties on goods imported from third countries on same basis as heretofore.
(2) The Royal Government of Bhutan will continue to enjoy as heretofore freedom from import duties in respect of goods imported on official account from third countries for consumption in Bhutan or from export duties in respect of goods of Bhutanese origin exported on official account to third countries.

Article V

Except as provided in Article IV, exports to and imports from third countries shall continue to be regulated in accordance with the laws, rules and regulations relating to imports, exports and foreign exchange applicable in India.

Article VI

The Government of India agrees to provide foreign exchange to the extent possible for import into Bhutan of such items as are essential for the diversification and growth of Bhutan’s economy.

Article VII

The subjects of Bhutan and the citizens of India will have the right to carry on trade in each other’s country, subject to such exceptions as may be mutually agreed upon.

Article VIII

To ensure the effective and harmonious implementation of this Agreement, the two Governments undertake to consult each other periodically so that such difficulties ass may arise in its implementation are resolved satisfactorily and speedily. The Royal Government of Bhutan also agrees to consult the Government of India in regard to its commercial, economic and trade relations with foreign countries.

Article IX

The Agreement shall come into force upon signature. It shall remain in force for a period of 10 years. It shall continue to be in force thereafter for a further period of 10 years unless terminated by either Party by giving notice in writing of not less then one year.

DONE at Thimphu on the Seventeenth day o f January 1972, in two originals in the English language, both texts being equally authentic.

Sd/- Sd/-
B.S. DAS NAMGYAL WANGCHUK,
Representative of India His Royal Highness
in Bhutan,(Ambassador extraordinary Minister for Trade and Industry
and plenipotentiary)
For the Government of India Royal Government of Bhutan
For the Royal Government of Bhutan

EXCHANGE OF LETTERS

NANGYAL WANGCHUK

Minister for Trade & Industry.
Thimphu, January 17, 1972

Your Excellency,
I have received your letter dated January 17, 1972, which reads as follows :

“Article I of the Agreement on Trade and Commerce provides for free trade within the territories of the Government of India and the Government of Bhutan. In pursuance of this provision, goods imported from India will already have paid the excise duties levied by the Central Government and will not, therefore, be liable to further taxes on consumption in Bhutan. Having regard to this position and the development needs of Bhutan, the Governments of India and Bhutan agree that the former shall pay to the letter an annual sum of Rupees on crore for each year for the duration of the Agreement.

I should be grateful if your Royal Highness will Kindly confirm that the above sets out the understanding reached between us”.
I confirm that the foregoing correctly sets out the understanding reached between us.
Accept Your Excellency the assurances of my highest consideration.

Yours sincerely,
Sd/-
NAMGYAL WANGCHUK

His Excellency Shri B.S. DAS,
Representative of India in Bhutan,
Thimphu


India Bilateral

Ministry of External Affairs, India


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