| AGRICULTURAL COMMODITIES AGREEMENT BETWEEN THE GOVERNMENT OF INDIA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE AMENDING
AGREEMENT EFFECTED BY EXCHANGE OF NOTES New Delhi, 1 May 1962 and 17 May 1962 The Government of the United States of America and the Government of India; RECOGNIZING the desirability of expanding trade in agricultural commodities between their two countries and with other friendly nations
in a manner which would not displace usual marketing of the United States of America in these commodities or unduly disrupt world
prices of agricultural commodities or normal patterns of commercial trade with friendly countries; CONSIDERING that the purchase for Indian rupees of agricultural commodities produced in the United States of America will assist
in achieving such an expansion of trade;
CONSIDERING that the Indian rupees accruing from such purchase will be utilized in a manner beneficial to both countries;
DESIRING to set forth the understandings which will govern the sales, as specified below, of agricultural commodities to India pursuant
to Title I of the Agricultural Trade Development and Assistance Act, as amended (hereinafter referred to as the Act), and the measures
which the two Governments will take individually and collectively in furthering the expansion of trade in such commodities;
HAVE agreed as follows Article I SALES FOR INDIAN RUPEES 1. Subject to issuance by the Government of the United States of America and acceptance by the Government of India of purchase authorizations
and to the availability of commodities under the Act at the time of exportation, the Government of the United States of America undertakes
to finance the sales for rupees, to purchasers authorized by the Government of India, of the following : Commodity Export Market Value (Millions) Tobacco $2.9 Yellow Corn $6.4 Ocean Transportation (estimated) $1.8- Total $ 11.1 2. Applications for purchase authorizations will be made within 90 calendar days of the effective date of this Agreement, except
that applications for purchase authorizations for any additional commodities or amounts of commodities provided for in any amendment
to this Agreement will be made within 90 days after the effective date of such amendment. Purchase authorizations will include provisions,
relating to the sale and delivery of commodities, the time and circumstances of deposit of the Indian rupees accruing from such sale,
and other relevant matters. 3. Purchase and shipment of the commodities mentioned above will be made within 18 calendar months of the effective date of this
Agreement., Article II USES OF RUPEES The rupees accruing to the Government of the United States of America as a consequence of sales made pursuant to this Agreement will
be used by the Government of the United States of America, in such manner and order of priority as the Government of the United States
of America shall determine, for the following purposes, in the amounts shown : A. For United States expenditures under subsections (a), (b), (d), (e), M and (h) through (r) of Section 104 of the Act, or under
any of such subsections, fifteen per cent of the rupees accruing pursuant to this Agreement. B. For a loan to the Government of India under Section 104 (g) of the Act for financing such projects to promote economic development
as may be mutually agreed, eighty-five per cent of the rupee accruing pursuant to this Agreement. The terms and conditions of the
loan and other , provisions will beset forth in a separate loan agreement. In the event that agreement is not reached on the use
of the rupees for loan purposes within three years from the date of this Agreement, the Government of the United States of America
may use the rupees for any purpose authorized by Section 104 of the Act. Article III DEPOSIT OF RUPEES 1. The amount of rupees to be deposited to the account of the Government of the United States of America shall be the equivalent
of the dollar sales value of the commodities and ocean transportation costs reimbursed or financed by the Government of the United
States of America (except excess costs resulting from the requirement that United States flag vessels be used) converted into rupees,
as follows : (a) at the rate for dollar exchange applicable to commercial import transactions on the dates of dollar disbursements by the United
States, provided that a unitary exchange rate applying to all foreign exchange transactions is maintained by the Government of India,
or (b) if more than one legal rate for foreign exchange transactions exists, at a rate of exchange to be mutually agreed upon from time
to time between the Government of the United States of America and the Government of India. 2. In the event that a subsequent Agricultural Commodities Agreement or Agreements should be signed by the two Governments under
the Act, any refunds of rupees which may be due or become due under this Agreement more than two years from the effective' date of
this Agreement would be made by the Government of the United States of America from funds available from the most recent Agricultural
Commodities Agreement in effect at the time of the refund. Article IV GENERAL UNDERTAKINGS 1. The Government of India will take all possible measures to prevent the resale or trans shipment to other countries or the use
for other than domestic purposes (except where such resale, trans-shipment or us--) is specifically approved by the Government of United States of America) of the agricultural commodities purchased
pursuant to the provisions of this Agreement, and to assure that the purchase of such commodities does not result in increased availability
of these or like commodities for export from India. 2. The Governments will take reasonable precautions to assure that all sales or purchases of agricultural commodities pursuant to
this Agreement will not displace usual marketing of the United States of America if these commodities or unduly disrupt world prices
of agricultural commodities, or materially impair trade relations among countries of the free world. 3. In carrying out this Agreement, the two Governments will seek to assure conditions of commerce permitting private traders to function
effectively and will use their best endeavours to develop and expand continuous market demand for agricultural commodities. 4. The Government of India will furnish, upon request of the Government of United States of America, information on the progress of
the program, particularly with respect to the arrival and condition of commodities, and information relating to exports of the same
or like commodities. Article V CONSULTATION The two Governments will, upon request of either of them, consult regarding any matter relating to the application of this Agreement,
or to the operation of arrangements carried out pursuant to this Agreement. Article VI ENTRY INTO FORCE The Agreement shall enter into force upon signature. IN WITNESS WHEREOF, the respective representatives, duly authorized for the purpose, have signed the present Agreement. DONE at New Delhi in duplicate this Ist day of May, 1962. For the Government of the United States of America. Sd /-
C. TYLER WOOD Sd /-
For the Government of India.
K.S. SUNDARA RAJAN I
The Minister for Economic Affairs and Director United States AID Mission to India, to the Joint Secretary, Department of Economic
Affairs, Ministry of Finance of India New Delhi, India May 1, 1962 Excellency I have the honor to refer to the Agricultural Commodities Agreement signed today between the Government of the United States of America and the Government of India (hereinafter referred to
as the Agreement) and, with regard to the rupees accruing to uses indicated under Paragraph A of Article II of the Agreement, to
state that the understanding of the Government of the United States of America is as follows : 1. Upon request of the Government of the United States of America, the Government of India will provide facilities for conversion
of two per cent of the rupees accruing from sales under this Agreement into other non-dollar currencies for purposes of Section 104(a)
of the Agricultural Trade Development and Assistance Act, as amended (hereinafter referred to as the Act). 2. The Government of the United States of America may utilize rupees in India to pay for goods and services, including international
transportation needed in connection with market development and other agricultural projects and activities in India and other countries.
Any convertibility involved in these transactions will be additional to the convertibility referred to in Paragraph 1 above.. 3. Five per cent of the rupees accrued under this Agreement will be used for loans to be made by the Agency for international Development
under Section 104(e) of the Act and for administrative expenses of the Agency for International Development in India incident thereto.
It is understood that (a) Such loans under Section 104(e) of the Act will be made to United States business firms and branches, subsidiaries, or affiliates
of such firms in India for business development and trade expansion in India, and to United States firms and Indian firms for the
establishment of facilities for aiding in the utilization, distribution, or otherwise increasing the consumption of and markets for
United States agricultural products. (b) Loans will be 'mutually agreeable to the Agency for International Development and the Government of India acting through the Department
of Economic Affairs of the Ministry of Finance. The Secretary, Department of Economic Affairs, or his designate, will act for the
Government of India, and the Administrator of the Agency for International Development, or his designate, will act for the Agency
for International Development. (c) Upon receipt of an application which the Agency for International Development is prepared to consider, the Agency for International
Development will inform the Department of Economic Affairs of the identity of the applicant, the nature of the proposed business,
the amount of the proposed loan, and the general purpose for which the loan proceeds would be expended. (d) When the Agency for International Development ~s prepared to act favourably upon an application, it will so notify the Department
of Economic Affairs and will indicate the interest rate and the repayment period which would be used under the proposed loan. The
interest rate will be similar to those prevailing in India on comparable loans and the maturities will be consistent with the purpose
of the financing. (e) Within -sixty days after the receipt of notice that the Agency for International Development is prepared to act favourably upon
an application the Department of Economic Affairs will indicate to the Agency for International Development whether or not the Department
of Economic Affairs has any objection to the proposed loan. (f) Unless within the sixty-day period the Agency for International Development has received such a communication from the Department
of Economic Affairs it shall be understood that the Department of Economic Affairs has no objection to the proposed loan. When the
Agency for International Development approves or declines the proposed loan, it will notify the Department of Economic Affairs. I shall appreciate receiving your Excellency's confirmation of the understanding of my Government as set forth in this note.
Accept, Excellency, the renewed assurances of my highest consideration. Sd /--
C. TYLER WOOD
Minister for Economic Affairs and
Director, U.S. AGENCY for International
Development Mission to India. Mr. K.S. SUNDARA RAJAN
Joint Secretary,
Department of Economic Affairs,
Ministry of Finance, Government of India, New Delhi.
The Joint Secretary, Department of Economic Affairs, Ministry of Finance of India, to the Minister for Economic Affairs and Director,
United States AID Mission to India. New Delhi, India May 1, 1962 Excellency: I have the honour to refer to Your Excellency's note of today's date which reads as follows : "I have the honor to refer to the Agricultural Commodities Agreement signed today between the Government of the United States of America
and the Government of India (hereinafter referred to as the Agreement) and, with regard to the rupees accruing to uses indicated
under Paragraph A of Article II of the Agreement, to state that the understanding of the Government of the United States of America
is as follows : 1. Upon request of the Government of the United States of America, the Government of India will provide facilities
for conversion of two per cent of the rupees accruing from sales under this Agreement into other non-dollar currencies for purposes
of Section 104(a) of the Agricultural Trade Development and Assistance Act, as amended (hereinafter referred to as the Act). 2. The Government of the United States of America may utilize rupees in India to pay for goods and services,
including international transportation needed in connection with market development and other agricultural projects and activities
in India and other countries. Any convertibility involved in these transactions will be additional to the convertibility referred
to in Paragraph 1 above. 3. Five per cent of the rupees accrued under this Agreement will be used for loans to be made by the Agency for International Development
under Section 104(e) of the Act and for administrative expenses of the Agency for International Development in India incident thereto.
It is understood that (a) Such loans under Section 104(e) of the Act will be made to United States business firms and branches subsidiaries, or affiliates
of such firms in India for business development and trade expansion in India, and to United States firms and Indian firms for the
establishment of facilities for aiding in the utilization, distribution, or otherwise increasing the consumption of and markets for
United States agricultural products. (b) Loans will be mutually agreeable to the Agency for International Development and the Government of India acting through the Department
of Economic Affairs of the Ministry of Finance. The Secretary, Department of Economic Affairs, or his designate, will act for the
Government of India, and the Administrator of the Agency for International Development, or his designate, will act for the Agency
for International Development. c) Upon receipt of an application which the Agency for international Development is prepared to consider, the Agency for International
Development will inform the Department of Economic Affairs of the identity of the applicant, the nature of the proposed business,
the amount of the proposed loan, and the general purpose for which the loan proceeds would be expended. d) When the Agency for International Development is prepared to act favourably upon an application, it will so notify the Department
of Economic Affairs and will indicate the interest rate and the repayment period which would be used under the proposed loan. The
interest rate will be similar to those prevailing in India on comparable loans and the maturities will be consistent with the purpose
of the financing. (e) Within sixty days after the receipt of notice that the Agency for International Development is prepared to act favourably upon
an application the Department of Economic Affairs will indicate to the Agency for International Development whether or not the Department
of Economic Affairs has any objection to the proposed loan. (f) Unless within the sixty-day period the Agency for International Development has received such a communication from the Department
of Economic Affairs it shall be understood that the Department of Economic Affairs has no objection to the proposed loan' When the
Agency for International Development approves or declines the proposed loan, it will notify the Department of Economic Affairs. I shall appreciate receiving your Excellency's confirmation of the understanding of my Government as set forth in this note. Accept, Excellency, the renewed assurances of my highest consideration." I have the honor to inform you that the contents of your note represent the understanding of the Government of India. I would request your Excellency to accept the renewed assurances of my highest consideration. Sd /-
K.S. SUNDARA RAJAN
Joint Secretary,
Department of Economic Affairs,
Ministry of Finance, Government of India.
Mr. C. TYLER WOOD,
Minister for Economic Affairs and Director,
U.S. Agency for International Development Mission to India,
Embassy of the United States of America,
New Delhi. The American Ambassador to the Secretary, Department of
Economic Affairs, Ministry of Finance of India New Delhi, India
May 17, 1962 Excellency :I have the honor to refer to the Agricultural Commodities Agreement entered into by our two Governments on May 1, 1962, providing
for the financing of certain agricultural commodities under Title I of the Agricultural Trade Development and Assistance Act, as
amended, and propose that it be amended as follows : 1. In Article I, at the request of the Government of India, include cotton upland under Commodity, export market value $ 27.0 million,
increase ocean transportation (estimated) to $3.0 million and raise the total value of the Agreement to $ 39.3 million. It is understood
that the Government of India will continue usual commercial imports of cotton from free world sources during United States of America
fiscal year 1963 at not less than 350,000 bales (480 pounds net weight). 2. In Article II, reduce the amount for United States of America expenditures under paragraph A from 15 to 11 percent of sales proceeds
and increase the amount for a section 104(g) loan under paragraph B from 85 to 99 per cent. 3. In the notes exchanged in connection with the May 1, 1962, Agricultural Commodities Agreement, change the opening phrase of numbered
paragraph 3 to read one per cent, and add a new numbered paragraph 4 to read as follows: "Upon request of the Government of the United States of America, the Government of India will make available facilities for conversion
to other currencies of the Rupee equivalent of up to $500,000 for purposes of section 104(H) of the Act. These funds are intended
to be used for educational exchange activities of the Government of the United States of America in other countries. If you concur in the foregoing, I propose that this note and your affirmative reply thereto shall constitute an agreement between
our two Governments to enter into force on the date of your note in reply. Accept, Excellency, the renewed assurances of my highest consideration. I have the honour to inform you that the foregoing amendments are acceptable to the Government of India. I agree that your letter
together with this reply shall constitute an Agreement between our two Governments effective on the date of this reply. Accept, Excellency, the renewed assurances of my highest consideration.
Sd /-- L. K. JHA His Excellency JOHN KANNETH GALBRAITH
Ambassador of the United States of America,
New Delhi.
| 