Indian Treaty Series

The Government of the Republic of India and the Central People's Government of the People's Republic of China, animated by the common desire to develop trade between the two countries and to strengthen further the friendship that already exists between the Governments and the peoples of India and China have, on the basis of equality and mutual benefit, reached agreement as follows

Article I

The two contracting parties being desirous of adopting all appropriate measures for the expansion of trade between the two countries agree to give the fullest consideration to all suggestions for the promotion of such trade.

Article II

The two contracting parties agree that all commercial transactions between the two countries shall be carried out in accordance with the Import, Export and Foreign Exchange Regulations in force from time to time in their respective countries.

Article III

The two contracting parties agree to accord, subject to the laws and regulations of the two countries for the time being in force, facilities for the import and export of the commodities mentioned in the attached Schedules "A" and "B".

Article IV

The present Agreement will not preclude the two contracting parties from facilitating trade in commodities not mentioned in attached Schedule'A'and 'B'.

Article V

The Trade between the Republic of India and the Tibet Region of the People's Republic of China will be conducted in accordance with the provisions of the Agreement between the Republic of India and the People's Republic of China on Trade and Intercourse between Indian and the Tibet Region of China signed in Peking on the 29th April, 1954.

Article VI

The Government of the Republic of India agree that on request by the Government of the People's Republic of China, they will, subject to the regulations in force, accord reasonable facilities for the entry into the Port of Calcutta, and subsequent movement to the Tibet Region of the People's Republic of China, of such commercial goods as cannot be obtained in India. These facilities will be accorded only to goods of Chinese origin.

Article VII

All commercial and non-commercial payments between the Republic of -India and the People's Republic of China may be effected in Indian rupees or in pounds sterling as may be mutually convenient. For the purpose of facilitating such payments, the People's Bank of China will open one or more account(s) with one or more commercial bank(s) in India authorised to deal in Foreign Exchange to be called account(s) "A". In addition, the People's Bank of China will, if necessary, open another account with the Reserve Bank of India to be called account "B". All payments between the two countries will be made through account(s) "A". Account "B" will be used only for replenishing the balance(s) in account(s) "N' whenever necessary. Payments to be made by residents of India to residents of the People's Republic of China will be effected by crediting the amounts of such payments to the above-mentioned account(s) "A". Payments to be made to residents of India by residents of the People's Republic of China will be effected by debiting the said account(s) "A". The account(s) "A" will be replenished as and when necessary by one of the following methods, namely

(i) by transfer of funds from another account "A" of the People's Bank of China with another commercial bank, or from account "B" with the Reserve Bank of India;

(ii) by sale of sterling to the bank concerned. Account "B" will be replenished either by sale of sterling to the Reserve Bank of India or by transfer of funds from account(s) "A".

2. Article VII of this Agreement covers the following payments (i) Payments for the commodities imported or exported under the present Agreement; (ii) Payments connected with commercial transactions and covering insurance, freight (in case of shipments of goods by the ships of either country), port charges, storage and forwarding; (iii) Payments for distribution of films, for incomes and expenses of cultural performances and other exhibitions (iv) Payments of expenses on account of tours of delegations of commercial, cultural, social or official nature; (v) Payments for the maintenance of the Embassy, Consulates and Trade Agencies of the Republic of India in China and for the maintenance of the Embassy, Consulates and Trade Agencies of the People's Republic of China in India; (vi) Other non-commercial payments on which agreement is reached beteen the Reserve Bank of India and the People's Bank of China.

3. Any balances on the credit side of the account(s) "A" or Account "B" maintained by the People's Bank of China will be convertible on demand into sterling at any time at the usual Bank's selling rate for sterling as fixed from time to time by the Indian Exchange Bank's Association. The above mentioned balances will be convertible into sterling even after the expiry of this Agreement.

L Payments for Border Trade between the Republic of India and the People's Republic of China, however, will be settled according to the customary practice.

Article VIII

The two contracting parties agree to consult with each other on questions that may arise in the course of the implementation of the pesent Agreement.

Article IX

This Agreement will come into force from the date of its signature nd will remain valid for a period of two years. This Agreement can be extended or renewed by negotiation between the two contracting parties to be commenced three months prior to its expiry.

DONE in duplicate in New Delhi on the fourteenth day of October 1954, in Hindi, Chinese and English languages, all texts being equally authentic.

(Sd.) KUNG YUAN. (Sd.) H.V.R. IENGAR.

On behalf of the Government
of the People's Republic of China. On behalf of the Government of the Republic of India.

SCHEDULE A

GOODS AVAILABLE FOR EXPORT FROM CHINA TO INDIA

1. Cereals- (1) Rice. (2) Cereals other than rice. (3) Green beans. (4) Soyabeans--green and black.

2. Machinery- Including Planning and shaping machines, Drilling Machines, Other machine tools, inclinable notching press, Steam Engines, Harvester, Road Roller (Road Marshall), Electric Pump, Air Compressor, Concrete Mixer, Rock Crusher, Printing Machinery, Moulding Machine, Trandormers, Pump, Motors Electric, Sowers, Gear Grooving machines, Cotton Textile Machinery, Jute Textile Machinery, Telephone Exchange Control, Rubber Insulated Wire, Ventilator, Equipments for Steam Generator, D.C. and A.C. Welder, Medical Apparatus.

3. Minerals-- (1) Antimony, Crude and Regulus. (2) Gypsum. (3) Graphite. (4) Fluorspar. (6) Sulphur. (6) Realgar (Munsell). (7) Orpiment. (8) Borax. (9) Naphathalene Refined. (10) Clay. (11) Arsenolite (Arsenic Oxide).

4. Silk and Silk piecegoods- (1) White and Yellow Raw Silk, Steam Filature. (2) Spun Silk. (3) Tussah Silk (Wild Silk). (4) Douppion Silk. (6) Silk piecegoods. (6) Fuji Silk piecegoods. (7) Tussah Silk piecegoods.

5. Animal Products- (1) Wool. (2) Skins and Hides, (3) Duck Feathers, Goose Feathers. (4) Woollen Yam. (5) White Wax. (6) Honey.

6. Paper and Stationery. (1) Newsprint. (2) Mechanical Pulp free printing paper. (3) Packing paper. (4) Stencil paper. (5) Blotting paper. (6) Fountain pen. (7) Pencil. (8) Ink. (9) Printing ink. (10) Numbering machine.

7. Chemicals- (1) DinitrochlorD-Benzene. (2) Sodium Phosphate. (3) Carbolic Acid (Phenol). (4) Potassium Carbonate. (5) Mono-chloro@benzene. (6) 666 Insecticide. (7) Bleaching Powder.

8. Oils- (1) Tung Oil (Wood oil). (2) Cinnamon Oil (3) Peppermint Oil. 9. Miscellaneous- (1) Camphor. (2) Cassia Laignea. (3) Musk. (4) Nutgall. (5) Aniseed start (start anise). (6) Menthol Crystal. (7) Apricot Kernel. (8) Galangal. (9) Resin. (10) Vegetable Medicinal substances. (11) Hair not. (12) Fluorescent tubes. (13) Paint. (14) Bicycles. (15) Sports goods. (16) Porcelain. (17) Glass and glassware. (18) Printed matter and books. (19) Canned goods. (20) Torch lights. (21) Vacuum flasks. (22) Buttons. (23) Lacquer ware. (24) Fire crackers. (25) Hosiery needles. (26) Stitching needles. (27) Fish and sea products. (28) Dried fruits. (29) Vegetables and vegetable products. (30) Garlic. (31) Vern-deelli. (32)Chinese film (exposed).

SCHEDULE B

Part I

GOODS AVAILABLE FOR EXPORT FROM INDIA TO CHINA INCLUDING TIBET FOOD PRODUCTS AND TOBACCO

(1) Grams, Rice and Pulses. (2) Kyanite Ore.

(3) Tobacco unmanufactured.

Raw materials and articles mainly unmanufactured Ores and Concentrates- (1) Chrome Ore. (2) Kyanite Ore. (3) Manganese Ore. (4) Tin and Zinc concentrates. Oils, Vegetable- (1) Grouncinut oil. Oils, Essential-- (1) Lemon grass oil. (2) Sandalwood oil. Textile fibre&-- (1) Cotton raw. (2) Wool raw.

Wood and Timber- Sandal wood. Hides and skins- Raw goat skins and sheep skins of heavier variety and hides and skins tanned. Miscellaneous- (1) Myrobalan and Myrobalan extracts. (2) Paraffin wax. (3) Art Shellac.

Articles mainly manufactured Chemicals, chemical products and drugs and medicines-

(1) Chemicals (Bichromates, Calcium Chloride, Chromic Acid, Glycerine, Magnesium Chloride, Magnesium Sulphate, Naphthalene, Potassium Bromide, Potassium Nitrate, Sodium Bromide, Sodium Sulphide, Sodium Sulphite). (2) Electric lamps. (3) Processed dyes. (4) Shark liver oil. Instruments, apparatus and appliances- (1) Clinical thermometers. (2) Electric lamps. (3) Electric insulating materials. (4) Electro-medical apparatus. (5) Mathematical instruments. (6) Surgical instruments. (7) X-Ray equipment. (8) Telephone. (9) Electric Fans. Machinery- (1) Ball and Roller bearings. (2) Generators. (3) Motors. (4) Textile Machinery including Spindles, ring frames, carding engines, looms and finishing machinery. (5) Boilers. Machine Tools: including Centre Lathe, Drilling Machine, Shaping Machines, Slotting Machines, Planing Machines, Hack sawing machines, Mechanical Power Presses, Lathe Chuks, Drill Chucks, Lathe Centres and Lathe mandrills, Machine Vices, Plain Drill Sleeves, Wood Thiclmess Planers, Round Collects, Acetylene Generators, Round seaming machines, Power operated belt driven guillotine shearing machines, Live Centres, Hand Presses and Foot Presses, Treadle guillotine shearing machines, Plan Milling Machine. Metal manufactures- (1) Aluminium, brass and copper wares. (2) Iron and Steel manufactures excluding containers. (3) Non-ferrous metal products. Textiles- (1) Cotton piecegooda and cotton manufactures. (2) Cotton twist and yarn. (3) Flax manufactures. (4) Sisal ropes and twine. (5) Jute manufactures.

Vehicles- (1) Bicycles. (2) Motor Cars. Miscellaneous- (1) Indian films exposed. (2) Light engineering goods: centrifugal pumps, G.I. buckets, hurricane lanterns, sewing machines. (3) Plastic manufactures. (4) Shellac. (5) Mica. (6) Asbestos cement sheets. (7) Cement. (8) Hume pipes. (9) Builder's hardware. (10) Tyres and tubes. (11) Belting for machinery. (12) Paper. (13) Bituminous composition. (14) Agricultural implements. (15) Disinfectants.

Part III

GOODS AVAILABLE FOR EXPORT FROM INDIA TO THE TIBET REGION OF CHINA FOOD PRODUCTS AND TOBACCO

(1) Confectionery.

(2) Hydrogenated Oil.

(3) Tlmned fruits and vegetables. (4) Cigarettes.

Raw materials and articles mainly unmanufactured Oils, Vegetable- (1) Castor oil. (2) Kardiseed oil. (3) Linseed oiL (4) Mustard oil. (5) Nigerseed oil. (6) Rapeseed oil. Textiles- Apparel.

Miscellaneous- Gums other than gum arabic.

Articles mainly manufactured

Instruments, apparatus and appliances,- (1) Accumulators. (2) Electric wires and cables. (3) Scientific instruments. (4) Transmission line equipment. (5) Wireless instruments.

Machinery- Control and transmission gear.

Metal manufactures- (1) Bolts and nuts. (2) Enamelware. (3) Wood Screws. Stationery includingpaper- Paper and stationery. Vehicles- (1) Trucks. (2) Carriages and carts. (3) Wheels and shafts for carts. Miscellaneou&- (1) Candles. (2) Clocks. (3) Coral manufactured. (4) Matches. (5) Soaps and washing powders. (6) Toilet requisites. (7) Lard. (8) Pork. (9) Sugar. (10) Rain coats. (11) Rubber shoes. (12) Reinforcement steel bars. (13) Galvanised iron wire. (14) Barbed wire. (15) Steel plates and sheets, (16) Road Rollers. (17) Gasoline, Kerosene, Diesel and Engine Oils. (18) Galvanized iron sheets, plain and corrugated. (19) Leather and leather goods. (20) Safety razor blades. (21) Biscuits. (22) Rubber manaufactures other than tyres and tubes. (23) Sheet glass and glasswares. (24) Sports goods. (25) Hard wood.

LETTERS

No. 1.

Dear Mr. KUNG,

In the course of the discussions that have led to the conclusion of the Trade Agreement between the Government of the Republic of India and the Government of the People's Republic of China, it was agreed that the intentions of the two Governments regarding Article VI and the procedure for its implementation should be placed on record by an exchange of letters.

2. On the basis of equality and mutual benefit, both Governments desire to maintain and develop the existing customary trade between India and the Tibet Region of the People's Republic of China.

3. The Government of the Republic of India appreciate that the Tibet Region of the People's Republic of China may need certain commercial goods that cannot be obtained in India and are, therefore, willing to give reasonable facilities for the clearance of such goods through Calcutta for movement to the Tibet Region of the People's Republic of China, provided the goods are of Chinese origin.

4. It is agreed that the following broad lines of procedure may be adopted for the clearance and movement of the goods mentioned in the preceding paragraphs : (i) With a view to facilitating clearance and transport, the Government of the People's Republic of China will give advance intimation to the Government of India of such goods to be transported to theTibet Region of the People's Republic of China, in order to ascertain with reference to the availability of such goods in India, whether clearance and movement facilities can be accorded. Matters pertaining to the transportation of such goods will be discussed and settled between the Chinese Embassy in New Delhi and the Government of India. (ii) The goods agreed to be cleared shall, on import, be entered at the Custom House in the Port of Calcutta. (iii) Subject to the Indian Customs Regulations, and on a deposit being made as required by the Customs Authorities, the goods will be cleared under Customs seal for onward despatch to the Tibet Region of the People's Republic of China by the agreed routes. (iv) The goods will be produced with the Customs seals intact before the Land Customs Officer at the point of final exit and cleared for export to the Tibet Region of the People's Republic of China.

(v) The Land Customs Officer will, if the goods are received with seals intact, clear the goods and grant a certificate to that effect. (vi) On presentation of such certificate to the Customs Authorities at the Port of Calcutta, the deposit shall be returned with such deductions for incidental charges as may be mutually agreed upon.

5. This letter and your confirmation will be treated by both Governments as forming part of the Agreement.

Yours sincerely,
H.V.R. IENGAR.

His Excellency Mr. KUNG YUAN,

Vice Minister for Foreign Trade and Leader of the Chinese Trade Delegation, New Delhi.

No. 2.

New Delhi, the 14th October, 1954

Shri IYENGAR,

I have today received with thanks your letter dated the 14th October, 1954 which reads as follows : (Here follows the text of letter No. 1) I agree to the contents stated in your aforesaid letter on behalf of the Central People's Government of the People's Republic of China. Your letter and this confirmation will be treated as forming part of the agreement.

Yours sincerely,
KUNG YUAN.

Shri H.V.R. IYENGAR,

Secretary to the Government of India, Ministry of Commerce and Industry, New Delhi.

No. 3.

Dear Mr. KUNG,

During the course of the negotiations which have led to the conclusion of the present Trade Agreement between India and China, both the Delegations recognised that the problems concerning inspection, surveys, shipping, insurance and travel by businessmen should be considered and solved in a practical manner so that the objectives of the Agreement are better achieved and trade relations between the two countries further strengthened. These problems relate to questions of detail rather than of principle and the two Delegations have accordingly agreed to defer the discussion on these matters to a later date. It is hoped that in these subsequent discussions our two Governments will be able to arrive at constructive solutions that will help to encourage and stimulate the smooth flow of trade between our two countries.

2. In the meanwhile, the trade between the two countries will continue to be conducted on such basis as may be agreed upon between the importers and exporters concerned.

3. This letter and your confirmation will be treated by both Governments as forming part of the Agreement.

Yours sincerely,
H.V.R. IENGAR.

His Excellency Mr. KUNG YUAN, Vice Minister for Foreign Trade and Leader of the Chinese Trade Delegation, New Delhi.

No. 4.

New Delhi, the 14th October, 1954

Shri IENGAR,

I have today received with thanks your letter dated the 14th October, 1954, which reads as follows : (Here follows the text of letter No. 3) I agree to the contents stated in your aforesaid letter on behalf of the Central People's Government of the People's Republic of China.

Your letter and this confirmation will be treated as forming part of the Agreement.

Yours sincerely,
KUNG YUAN.

Shri H.V.R. IENGAR,

Secretary to the Government of India, Ministry of Commerce and Industry, New Delhi.

EMBASSY OF THE PEOPLE'S REPUBLIC OF CHINA IN INDIA
New Delhi, the 25th May, 1957.

Dear Mr. RANGANATHAN,

I have the honour to refer to the recent discussions regarding promotion of trade between the People's Republic of China and India when it was agreed that the trade relations between our two countries will continue to be regulated by the terms and conditions embodied in the Trade Agreement concluded on the 14th October, 1954 for a further period ending 31st December, 1958, subject to the substitution of Article VII of the old Agreement by the following Article --

"All commercial and non-commercial payments between the People's Republic of China and the Republic of India may be effected in Indian rupees. For the purpose of facilitating such payments, the People's Bank of China and/or other commercial banks in China will open one or more account(s) with one or more commercial bank(s) in India authorised to deal in foreign exchange. In addition, the People's Bank of China will open another account with the Reserve Bank of India. All payments between the two countries will be made through the account(s) maintained with the commercial bank(s). Payments to be made by residents of India to residents of the People's Republic of China will be effected by crediting Ova amounts of such payments to the above-mentioned account(s) with the commercial bank(s) in India. Payments to be made to residents of India by residents of the People's Republic of China will be effected by debiting the said account(s) with the commercial bank(s) in India. The account(s) with the commercial bank(s) in India will be replenished as and when necessary by one of the following methods, namely :-

(i) by transfer of funds from another account(s) of the People's Bank of China or the commercial bank(s) in China with another commercial bank(s) in India, or

(ii) by transfer of funds from the account of the People's Bank of China with the Reserve Bank of India, or

(iii) by sale of sterling to the bank concerned.

The account of the People's Bank of China with the Reserve Bank of India will be replenished either by sale of sterling to the Reserve Bank of India or by transfer of funds from the account(s) of the People's Bank of China or the commercial bank(s) in China with the commercial bank(s) in India.

2. Article VII of this Agreement covers the following payments W Payments for the commodities imported or exported under the present Agreement; (ii) Payments connected with commercial transactions and covering insurance, freight (in case of shipments of goods by the ships of either country), port charges, storage and forwarding expenses and bunkering; (iii) Payments for distribution of films, for incomes and expenses of cultural performances and other exhibitions; (iv) Payments of expenses on account of tours of delegations of commercial, cultural, social or official nature; (v) Payments for the maintenance of the Embassy, Consulates and Trade Agencies of the People's Republic of China in India and for the maintenance of the Embassy, Consulates and Trade Agencies of the Republic of India in China; (vi) Other non-commercial payments on which agreement is reached between the Reserve Bank of India and the People's Bank of China.

3. Any balance in the Rupee account maintained by the People's Bank of China with the Reserve Bank of India will be convertible on demand into sterling at the usual Banks selling rate for sterling as fixed from time to time by the Indian Exchange Banks' Association. The above-mentioned balance will also be convertible into sterling after the expiry of this Agreement.

4. Payments for Border Trade between the People's Republic of China and the Republic of India, however, will be settled according to the customary practices." The new Article VII will come into force with effect from the 1st July 1957. I shall be glad if you will please confirm that the above correctly sets out the understanding reached between us.

Yours sincerely,
Sd/- PAN T'zu-Li

Ambassador Extraordinary and Plenipotentiary of the People's Republic of China to India.

Shri S. RANGANATHAN, I.C.S.

Secretary to the Government of India,

Ministry of Commerce and Industry, New Delhi.

Dear Mr. PAN Tzu-Li,

I write to acknowledge the receipt of your letter dated May 25, 1957, which reads as follows : (Not reproduced) I confirm that the foregoing correctly sets out the understanding reached between us.

Yours sincerely,
(Sd.) S. RANGANATHAN, Secretary to the Govt. of India.

H.E. Mr. PAN TZU-LI,

Ambassador Extraordinary and Plenipotentiary of the People's Republic of China, New Delhi.

Dear Mr. TU YU-YUN,

In the course of discussions which we had recently regarding further development of trade between the People's Republic of China and India, it was agreed that the Government of the People's Republic of China will encourage the State Trading Corporations of China to establish and strengthen contacts to the extent practicable with the State Trading Corporation of India in those commodities which are handled by the State Trading Corporation of India. I shall be grateful if you would kindly confirm that the foregoing correctly sets out the understanding reached between us.

Yours sincerely,
(Sd.) K.B. LALL, Joint Secretary to the Government of India.

Mr. TU YU-YUN,

Counsellor for Commercial Affairs,

Embassy of the People's Republic of China, New Delhi.

Dear Mr. LALL,

I have the honour to acknowledge the receipt of your letter of today's date which reads as follows : (Not reproduced)

I confirm that the foregoing correctly sets out the understanding reached between us.

Yours sincerely,
(Sd.) Tu YU-YUN. Counsellor for Commercial Affairs, Embassy of the People's Republic of China in India.

Shri K.B. LALL,

Joint Secretary to the Government of India, Ministry of Commerce and Industry, New Delhi.

New Delhi, May 25, 1959

Dear Mr. TU YU-YUN,

With reference to Article IX of the Trade Agreement between the Republic of India and the People's Republic of China concluded on the 14th October, 1954 and the recent discussions regarding the promotion of trade between the two countries, I have the honour to say that the two contracting parties have agreed that the present Trade Agreement as modified by the letters exchanged on the 25th May, 1957, shall remain valid up to the 31st December, 1959.

Yours sincerely,
(Sd.) K.B. LALL. Additional Secretary to the Government of India. MR. TU YU-YUN, Counsellor for Commercial Affairs, Embassy of the People's Republic of China, New Delhi.

Dear Mr. LALL,

With reference to Article IX of the Trade Agreement between the People's Republic of China and the Republic of India concluded on the 14th October, 1954 and the recent discussions regarding the promotion of trade between the two countries, I have the honour to say that the two contracting parties have agreed that the present Trade Agreement as modified by the letters exchanged on the 25th May, 1957, shall remain valid up to the 31st December 1959.

Yours sincerely,
(Sd.) Tu YU-YUN Counsellor for Commercial Affairs. MR. KB LALL, I.C.S.,

Additional Secretary to the Government of India, Ministry of Commerce and Industry, New Delhi.