Trade agreement lists cotton, tea, coal, and railway materials for exploration

Who it concerns: The agreement involves the Governments of India and Pakistan, specifically their Ministries of Commerce, government-controlled trade corporations, commercial banks (State Bank of India and National Bank of Pakistan), and relevant enterprises and organizations in both countries.

What was agreed

• Trade to be conducted on a Government-to-Government basis or through Government-controlled Trade Corporations.
• Most favoured nation treatment to be accorded in trade regulations in accordance with GATT provisions.
• Payments and charges to be effected in freely convertible currency.
• Goods exported must be of the exporting country's origin and not re-exported to third countries.
• A joint Committee of representatives to be established to meet at least once a year to review implementation and solve problems.
• The agreement is valid for one year, automatically extending for two years unless terminated with three months' written notice.
• Banking arrangements to use irrevocable documentary letters of credit, initially confined to the State Bank of India and the National Bank of Pakistan.
• Delegations scheduled to meet at the end of January 1975 to explore trade in cotton.
• Government-controlled corporations to meet in March or April 1975 in New Delhi to explore trade in engineering goods, jute manufactures, tea, coal, iron and steel products, rice, bidi leaves, and railway track materials.

Also in the document

• The agreement specifically lists commodities for exploration including cotton, engineering goods, jute manufactures, tea, coal, iron and steel products, rice, bidi leaves, and railway track materials.
• Initial banking transactions are restricted to the State Bank of India and the National Bank of Pakistan to avoid multiplicity of banks.
• The agreement was signed in Islamabad on 23 January 1975.