Indian Treaty Series

Berlin, 11 November 1971

The government of INDIA

AND

The Government of German Democratic Republic

(hereinafter called the “parties”),

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

DESIROUS of increasing and diversifying the existing trade and expanding and strengthening economic co-operation between the two countries,

HAVE agreed as follows :

Article I

Both Parties will further develop and strengthen on the basis of equality and mutual benefit, the economic and trade relations between India and the German democratic Republic. They will study and with utmost goodwill, take decisions on the suggestions which either of them would like to present for consideration of the other for the purpose of achieving closer trade and economic relations.

Article II

(1) Each Party shall within the framework of its laws, rules and regulations, facilitate to the maximum extend possible the export of goods to and the import of goods from the other country.
(2) During the period of validity of this protocol the total value of the imports will be equal to the total value of the exports effected by either country, taking into account the volume of all payments of a commercial and non-commercial nature. Further, for this purpose and for periodic reviews, imports and exports whether on deferred payments terms of on cash basis, relating to the contracts concluded and to be concluded on the basis of this and earlier agreements, as well as all payments of a commercial and non-commercial nature, will be taken into account as and when payments are made.

Article III

During the validity of this Protocol, the export of goods from India to the German Democratic Republic and from the German Democratic Republic to India will be effected on the basis of the attached Schedule A (list of goods available) for export from the German Democratic Republic to India and Schedule B (list of goods available for export from India to the German Democratic Republic), which from an integral part of this Protocol
The schedules may be modified or supplemented by mutual agreement.

Article IV

The import and export of goods under this Protocol will be effected in accordance with the import, export, foreign exchange and other laws and regulations in force, from time to time in India and the German Democratic Republic, respectively, and on the basis of contracts to be concluded between authorized natural and juridical persons in the two countries.

Article V

(1) Both Parties will accord to each other most favoured nation treatment with regard to all matters concerning mutual trade of two countries.
(2) The provisions of para I shall not, however, apply to:
(a) Advantages which are or may be accorded by either Party to contiguous countries in order to facilitate frontier trade;
(b) Preferences and advantages and accorded by either Party to any third country, which are in force at the time of the coming into effect of this Protocol or in replacement thereof;
(c) Advantages and preferences and accorded under any arrangement for the expansion of trade and economic co-operation between developing countries, to which India is or may become a Party;
(d) Advantages and privileges resulting from a customs union and/or free trade area of which either Party is or may become a member.

Article VI

All payments of a commercial and non-commercial nature between India and the German Democratic Republic shall be effected in non-convertible Indian Rupees. Consequently, all contracts, invoices and other relevant documents will be made out in the Indian Rupees.
Exception to the above payments mechanism concerning specific transactions will be subject to agreement between both Parties.
(2) For this purpose, the Deutsche Aussenhandels bank AG, Berlin acting on behalf of the Government of the German Democratic Republic, will maintain with the Reserve Bank of India a “Central Clearing Account GDR-India”
Moreover, the Deutsche Aussenhandels bank AG, Berlin will maintain one or more accounts with one or more commercial banks in India, authorized to deal in foreign exchange.
(3) The “Central Clearing Account GDR-India” maintained by the Deutsche Aussenhandels bank AG, Berlin, with the Reserve Bank of India will be used for depositing the Rupee holdings of the Deutsche Aussenhandels bank AG, Berlin, for replenishing the accounts of the Deutsche Aussenhandels bank AG, Berlin, with the commercial banks in India, authorised to deal in foreign exchange and for operating any technical credit which may be mutually agreed upon between the two Parties.
(4) The accounts maintained by the Deutsche Aussenhandels bank AG, Berlin, with commercial banks in India will be used for carrying out all operations of a commercial and non-commercial nature, except those pertaining to the Central Clearing Account as mentioned above.
(5) “The Central Clearing Account GDR-India” will be replenished by transfer of funds in India Rupees from the accounts maintained by the Deutsche Aussenhandels bank AG, Berlin with authorised commercial banks in India. The accounts with the authorized commercial banks in India will be replenished by inter-transfer of funds from accounts maintained with these banks and from the “Central Clearing Account GDR-India”.
(6) The payments permitted in accordance with the Indian foreign Exchange Control laws, rules, regulations and procedures will be effected on the basis of this Protocol to natural and juridical persons residing in India by crediting the amounts of such payments to the accounts of the Deutsche Aussenhandels bank AG, Berlin with authorized commercial banks in India. Likewise, the payments which are to be effected by natural and juridical persons residing in India in accordance with the foreign Exchange Control laws, rules, regulations and procedures in force in the German Democratic Republic will be effected by debiting the accounts maintained by the Deutsche Aussenhandels bank AG, Berlin, with authorized commercial banks in India under instructions from the Deutsche Aussenhandels bank AG, Berlin.
(7) The Reserve Bank of India and the Deutsche Aussenhandels bank AG, Berlin, will arrange the banking details necessary for the implementation of this Protocol.

Article VII

(1) Any debts or balances in the Rupees accounts of the Deutsche Aussenhandels bank AG, Berlin shall be utilized upon expiry of the agreement signed in New Delhi on 23 January, 1969, and upon the coming into force of this Protocol, in accordance with the stipulations laid down in the present Protocol. What has been stated about “balances” shall equally apply to all amounts of the technical credit drawn by the Deutsche Aussenhandels bank AG, Berlin, and which remain outstanding on the close of business on 31 December, 1971.
(2) Any debts or balances in the Rupee accounts of the Deutsche Aussenhandels bank AG, Berlin, or any debt of the Deutsche Aussenhandels bank AG, Berlin, in connection with the granting of a technical credit, shall be used upon expiry of this Protocol during the following 12 months for the purchase of Indian goods and services or goods and services of the German Democratic Republic, as the case may be, or for other payments of a commercial or non-commercial nature between India and the German Democratic Republic.
(3) Payments arising from contracts concluded before the expiry of this Protocol but falling due after the expiry of this Protocol shall be effected, notwithstanding the expiry of this Protocol, in accordance with Article VI of this Protocol and be utilized for the purchase of Indian goods and services or goods and services of the German Democratic Republic, as the case may be, or for payments of a commercial or non-commercial nature between India and the German Democratic Republic during a period of twelve months, counted from the date the said payment is made.
In both cases, after the expiry of the said twelve month period, any balances outstanding will be settled in such a manner as may be agreed upon between the Parties.

Article VIII

With the object of increasing and diversifying trade between the two countries both Parties agree to promote and support close co-operation between the natural and juridical persons mentioned in Article Iv of this Protocol by direct contracts, participation in fairs and exhibitions held in the territory of either Party, supply of other’s requirements and consumer needs.

Article IX

Both Parties agree to promote trade between the two countries by identifying new sectors of industrial and technological co-operation, development and better utilization of resources and production facilities in both countries on a mutually beneficial basis as well as joint marketing in third countries.

Article X

Both Parties, recognizing the importance of efficient and economical shipping services for the implementation of the Annual Trade Protocols and promotion of trade between the two countries consider it necessary that their national shipping lines should co-operate with each other to the maximum extend possible in the field of shipping. To this end, while detailed arrangements for cooperation in the shipping sector are or will be indicated in separate agreements on shipping between the two countries, both Parties agree to direct their national shipping lines conclude by mutual consultations and agreements, the necessary arrangements on all matters concerning transportation of the cargoes moving between the two countries under the Annual Trade Protocols.

Article XI

Each Party will recommend to the natural and juridical persons in its country to agree in the commercial contracts to be concluded within the framework of this Protocol to refer all disputes resulting from these contracts to arbitration.

Article XII

Subject to the rules, regulations and laws of the respective country, juridical and natural persons of either Party shall enjoy the most-favoured-nation treatment in respect of personal protection and protection of property when engaged in commercial activities in the territory of the other.

Article XIII

(1) Juridical persons having been set up under the law of either country and having their registered office in that country shall be recognized as legal entities in the territory of the other country.
(2) The natural and juridical persons of either country working within the framework of this Protocol in the territory of the other, shall enjoy the same rights of access to courts of law and tribunals, and of legal protection as are admissible under the laws of the other country to its own nationals.
Neither of the Parties shall be responsible for liabilities of its natural and juridical persons arising from commercial transactions.

Article XIV

Unless otherwise specifically and mutually agreed upon, all goods exported from India to the German Democratic Republic and from German Democratic Republic to India are meant only for internal use and domestic consumption in India and in the German Democratic Republic, respectively, and both Parties agree to take all possible measure to the effect that these goods are not re-exported or diverted to any other country or territory.

Article XV

In order to facilitate the implementation of this Protocol and in order to adopt additional measures for the promotion of bilateral trade between the two countries, the two Parties will consult each other as and when need arises. For this purpose, if required, the representatives of both Parties will meet at the request of either Party at a place and time to be mutually agreed upon, the meeting being held on a date within 45 days of the request.

Article XVI

(1) This Protocol shall come into force on 1 January 1972, and remain valid until 31st December 1975. It shall automatically remain in force for a further period of one year, unless one of the Parties gives notice in writing of its intention to at least 3 months before the expiry of the period of its validity.
This Protocol may be further extended or renewed by mutual consent between the two Parties.
(2) Any addition or amendment to this Protocol may be made by mutual consent in writing of both Parties
(3) The provisions of this Protocol shall apply also to those contracts which have been concluded during the validity of this Protocol but not fulfilled before its expiry.

DONE and signed in Berlin on 11 November 1971, in two originals in the English language, both being equally authentic.

Sd/- Sd/-
V.S.MISRA E.KATTNER
For the Government of For the Government of
India the German Democratic Republic

Schedule A

LIST OF GOODS AVAILABLE FOR EXPORT FROM THE GERMAN DEMOCRATIC REPUBLIC TO INDIA

1. Ships:
Cargo ships
Fishing trawlers
Special ships
Equipment for ships
Ship radio and navigation engineering

2. Metallurgical Equipment:
Equipment for rolling mills
Ore dressing plants
Metallurgical cranes
Scrap presses

3. Chemical plants and equipment:
Plants and equipment for the production of organic and inorganic chemicals
Plants for the extraction of vegetable oils and fats and alcohol
Plants for the production of plastics, elastics and resins
Plants for the production of technical gases

4. Conveying equipment:
Harbour equipment
Conveying and handling equipment

5. Processing machines for plastics and elastics

6. Rolling stock:
Diesel locomotives
Electric locomotives
Passenger coaches
Refrigerator cars
Containers

7. Construction and ceramic machinery:
Construction and road building machinery
Construction machinery
Equipment for the production of the fine and heavy ceramics

8. Machine tools:
Gear cutting machines
Drilling machines
Lathes
Milling machine
Grinding machines
Machine tools for non-cutting shaping

9. Printing machinery:
Rotary machines
Letter press printing machine
Flexographic printing machines
Book binding and cutting machines
Complete printing plants
Reproduction equipment

10 Machinery and equipment for the foodstuffs and packing industries:
Machines and equipment for the:
Long keeping pastry industry and bakeries, beverage industry
Packaging industry
Fruit and vegetable processing, confectionery industry
Rice and wheat mills
Silos and silo equipment

11. Agricultural machinery:
Harvesting combines
Soil tilling machines
Pest control equipment
Milking equipment

12. Motor car parts and accessories:
Electrical and Mechanical parts for motor vehicles
Spare parts and accessories

13. Diesel engines, air and refrigeration engineering:
Diesel engines
Pumps and compressors
Equipment for air and refrigeration engineering

14. Scientific and technical instruments and medical engineering:
Measuring and precision measuring engineering
Photogrammetric instruments
Cameras and projection equipment
Microscopes
Surveying instruments
Astronomical instruments
Planetariums
Opto-physical measuring instruments
Nuclear physical measuring instruments
Micro reproduction instruments
Medical instruments
Laboratory equipment
Teaching and instruction aids

15 Office and data processing machinery:
Electric typewriters
Automatic typewriters
Balancing machines
Electromechanic calculating machines
Electronic calculating machines
Automatic invoicing and accounting machines
16 Electro-technical equipment
Electric engines
Generators
High and low voltage instruments
Welding sets
Electric furnaces
High and medium frequency equipment
Electrical measuring and testing equipment
Electrical signal and control equipment
Carrier terminal sets

17. Steel products

18. Potash products
Potash fertilizer
Potash for industrial application

19. Chemical products:
Flavours, essences, scents
Inorganic and organic chemicals
Laboratory and fine chemicals
Plant protection and pest control agents
Pharmaceutical products
Finishing products for the textile and leather industry
Dye intermediates and dyestuffs

20. Photochemical products:
Black and white and colour films
Medical X-ray films
Technical X-ray films
Photo plates
Photo chemical

21 Books, newspapers, periodicals and stamps

22 Glass and ceramic goods:
China ware
Crystal glass
Technical glass
Laboratory glass

23. Industrial consumer goods

SCHEDULE B

LIST OF GOODS AVAILABLE FOR EXPORT FROM INDIA TO THE GERMAN DEMOCRATIC REPUBLIC

1. Agricultural products and materials:
Fresh and processed fruits, fruit juices
Cashew kernels
Pepper
Other spices
Deoiled cakes and rice bran
Groundnuts
Walnuts
Tea
Coffee
Tobacco
Coir and Palmyra fibre
Coir and sisal yarn and ropes
Cotton waste
Cotton linters
Natural resins
Castor oil
Essential oils and aromatics
Medicinal plants and herbs
Bones (crushed)
Hides and skins (tanned and semi-tanned)
Bristles and animal hair
Animal casings
Bone meal

2. Minerals and allied products:
Iron ore
Manganese ore
Ferro-silicon
Quartz
Silemanite, ilmenttite, kyanite
Steatite
Other mineral products such as black sands, non-ferrous ores
Mica and mica products

3 Manufactures of non-ferrous metals, iron and steel
Aluminum sheets, circles, tubes and rods,
Bolts, nuts and nails
Cast iron pipes and fittings
Castings and forgings
Wire ropes
Builder’s hardware
Tin plates and products
Railways, tract materials

4. Machinery, electrical apparatus and appliances and other engineering goods;
Knitting machines and components
Printing machines and components
Handtools
Twist drills and accessories for drilling machines
Ball and roller bearings
Machine tools and accessories
Textile machinery
Leather manufacturing machinery
Pumps and compressors
Mining machinery
Pressure lamps
Foundry equipment
Valves
Reduction gears and parts batteries
Batteries
Torches
Electric wires and cables
Electric starters and switches
Electric accessories
Electric parts for automobiles and tractors
Automobile parts

5. Chemicals, pharmaceuticals and allied products;
Various organic chemicals
Various inorganic chemicals
Textile chemical auxiliaries
Paints
Varnishes
Drugs and medicines
Pharmaceutical products
Processed minerals
Refractories
Plywood and plywood products
Cosmetics and toiletries

6. Other manufactured goods:
Cotton textiles
Jute manufactures
Coir manufactures
Knitware
Carpets
Linoleum
Leather footwear
Leather products
Sports goods
Cigarettes
Lock and padlocks
Sanitary fittings
Stamps
Periodicals
Books
Silk fabrics and garments
Handloom goods
Cottage industry products
Handicrafts
other consumer durables and industrial goods

LETTERS

The Head of the
Government Delegation
of India
Berlin, 11 November, 1971

EXCELLENCY,
I acknowledge the receipt of your letter of today reading as follows:

“As a result of the negotiations held between the Government delegations of the German Democratic Republic and India on the Trade and Payments Protocol signed today, the following has been agreed upon”.
Both Parties will recommend to the natural and juridical persons in their respective countries to include the following “Gold Clause” in the commercial contracts under the said Protocol :

“The price specified in this contract is based on the current par value of the Indian Rupee (now contains 0.118489 gramme of fine gold). In the event of any change in the per value of the India Rupee, the amounts still due for the goods already delivered under the contract and the prices of goods still to be delivered under the contract will be adjusted in proportion to change in the per value of the Indian Rupee.
There shall not, however be any such adjustment if and to the extend, the change in the per value of the Indian rupee is part of a uniform change in the per value of currencies as a result of revision of the international official price of gold.”
However, even in respect of those contracts where prices are indicated in pound Sterling or in US Dollar or in any other convertible currency payment will be effected in non-convertible Rupees at the official rate of exchange on the date of payment.
“I would be obliged to you, Excellency, if you confirm that the contents of this letter correctly set out the agreement reached between us.”

I confirm, Excellency, that the contents of your letter correctly set out the agreement reached between us.

Accept, Excellency, the assurances of my highest consideration.

Sd/-
V.S.MISRA

H.E.E. KATTNER
Head of the
Government Delegation of the
German Democratic Republic
Berlin.

Head of the Government Delegation of India
Berlin
11 November 1971

EXCELLENCY,
I acknowledge the receipt of your letter of today reading as follows:

“As a result of the negotiations held between the Government delegations of the German Democratic Republic and India on the Trade and Payments Protocol signed today, the following has been agreed upon:

Any purchase of goods from the German Democratic Republic and India by the natural and juridical persons of the German Democratic Republic and India and not included in schedules A and B attached to the said Protocol will be subject to mutual consent in writing between the Ministry of external economic relations, Government of the German Democratic Republic, on the other.
I would be obliged to you, Excellency, if you confirm that the contents of this letter correctly set out the agreement reached between us.”
I confirm, Excellency, that the contents of your letter correctly set out agreement reached between us.
Accept, Excellency, the assurances of my highest consideration.

Sd/-
V.S. MISRA

H.E.E. KATTNER
Head of the
Government Delegation of the
German Democratic Republic
Berlin.