1974 India-Czechoslovak trade pact mandates equal import-export values in non-convertible rupees

The parties agreed to maintain equal import and export values, utilize specific banking mechanisms for payments in non-convertible Indian Rupees, and exchange goods based on attached schedules.

Who it concerns: The agreement involves the Government of India and the Government of the Czechoslovak Socialist Republic. It affects Indian and Czechoslovak physical and juridical persons, including state-owned organizations and authorized trading entities. Specific institutions named include the Reserve Bank of India and Ceskoslovenska obchodni banks A.S. Praha (Commercial Bank of Czechoslovakia Ltd.). Sectors include manufacturing, shipping, agriculture, mining, and various industrial goods listed in Schedules A and B.

What was agreed

• Total value of imports must equal total value of exports during the agreement's validity.
• Payments are to be effected in non-convertible Indian Rupees.
• The Commercial Bank of Czechoslovakia Ltd. will maintain a Central Account with the Reserve Bank of India and accounts with Indian commercial banks.
• Goods are to be traded based on attached Schedules 'A' (Czechoslovak exports to India) and 'B' (Indian exports to Czechoslovakia).
• Exported goods are for domestic use in the importing country and shall not be re-exported.
• Both countries agree to utilize vessels owned or chartered by their respective shipping organizations to the maximum extent possible.
• The agreement comes into force on 1st January, 1975, and remains valid for five years.

Also in the document

• The agreement mandates that all commercial and non-commercial payments between residents of the two countries be made in non-convertible Indian Rupees.
• A specific banking framework is established where the Czechoslovak Commercial Bank maintains a Central Account with the Reserve Bank of India to facilitate rupee settlements.
• Balances in Rupee accounts or debts related to technical credit upon expiry of the agreement must be used for purchasing goods within 12 months.