This agreement, signedOin January 22, 1957, accords to each other’s commerce the most favoured nation treatment. It also provides for border trade in the east within a ten mile belt of the border between West Bengal, Assam and Tripura on the one hand and East Pakistan on the other.
Negotiations between the Trade Delegation from Pakistan and the representatives of the Government of India for strengthening and developing commercial relations between the two countries began in New Delhi on January 15th,1957, The negotiations resulted in a Trade Agreement which was signed on January 22nd, 1957, on behalf of the Government of India by Shri S. Ranganathan, Secretary, Ministry of Commerce and Consumer Industries, and on behalf of the Government of Pakistan by Mr. Azis Ahmed, Secretary, Ministry of Commerce. The Governments of India and Pakistan ratified the Trade Agreement, which came into force from February 1st, 1957 It is likely to remain in force for three years.
Under the Agreement, the two Governments have undertaken to explore all possibilities for expansion of trade between the two countries on the basis of mutual advantage. They have agreed to facilitate imports and exports of commodities specified in the two schedules attached to the Agreement, to the extent permitted by their laws, regulations and procedures.
The items available for export from India to Pakistan include coal, chemicals, drugs and medicines, mill-board and straw board, machinery and mill work, workshop equipment, electrical instruments, cinema films, sugar, tea for blending, coffee, betel leaves, bidis and hooka tobacco and bidi leaves. The items available for export from Pakistan to India include raw jute, hides and skins, fish, poultry and eggs, betel nuts, spices, honey, cinema films, machine tools, bicycles and spare parts, surgical instruments and sports goods.
Export or import of commodities not listed in the schedules will also be permitted in accordance with the laws, regulations or procedures of either country. The two Governments have agreed to enter into special arrangements for commodities listed in a separate schedule, up to quantities or values specified for each item. These include coal, hard and soft wood, stone boulders and sea salt for export from India and rock salt and forest produce for export from Pakistan to India.
The two Governments have also agreed to accord to each other’s commerce the most favoured nation treatment. In order to meet the day-to-day requirements of the people living within a ten-mile belt of the border between East Pakistan on the one hand and West Bengal, Assam and Tripura on the other, the two Governments have agreed that border trade will be allowed in the commodities specified in a separate schedule. These commodities include items of daily consumption like fish, poultry and eggs, soap, vegetables and fresh fruits, milk and milk products, kerosene, betel leaves, fodder and firewood. It has been agreed that after six months from the date the present Agreement comes into force, this trade will be carried on only through specified routes.
The working of the Agreement would be reviewed every six months and the schedules of commodities would be subject to revision before the beginning of each calendar year
The text of the Agreement and the letters are given below:
TRADE AGREEMENT BETWEEN INDIA AND PAKISTAN
The Government of India and the Government of Pakistan being desirous of strengthening and developing commercial relations between their respective countries have agreed as follows:-
Article – I
The two Governments recognising the needs and requirements of each other for foreign exchange in the context of their developing economies and having regard to the present disequilibrium in their trade and payments position undertake to explore all possibilities for expansion of trade between the two countries on the basis of mutual advantage.
Article – II
With regard to commodities goods mentioned in Schedules A and B attached to this Agreement, the two Governments shall facilitate imports from and exports to each other’s territories to the extent permitted by their respective laws, regulations and procedures.
Article – III
Import and exports of the commodities/goods mentioned in Schedules ‘A’ and ‘B’ shall normally take place through ordinary commercial channels, except where either Government finds it necessary to buy or sell part or whole of the quantity /value of any item on Government account.
Article – IV
With respect to commodities/goods mentioned in Schedules ‘A’ and ‘B’ export or import shall also be permitted in accordance with the laws, regulations and procedures in force in either country from time to time.
Article – V
Each Government shall accord to the commerce of the country of the other Government treatment no less favourable than that accorded to the commerce of any third country.
Article – VI
The provisions of Article V shall not apply to:
(a) Any advantage which either country has accorded or may accord at any time during the period of validity of this Agreement to other bordering countries in order to facilitate frontier traffic,
(b) Any advantages accorded in connection with a customs union or free zone of which either country may become a member,
(c) Preferences or advantages accorded by either country to any third country prior to the 15th August 1947 or in replacement thereof.
Article – VII
The two Governments recognising the need for entering into special arrangements as contemplated by Article XXIV (11) of the General Agreement on Tariffs and Trade agree to enter into such arrangements. The commodities covered by such special arrangements and the nature and scope thereof are set out in Schedule C.
Article – VIII
In order to meet the day-to-day requirements of the people living within a ten mile belt of the border between West Bengal, Assam and Tripura on the one hand and East Pakistan on the other and with a view to providing facilities to those people to dispose of their goods, border trade shall be allowed in the commodities specified in accordance.
Article -IX
In order to facilitate the implementation of this Agreement, the two Governments shall consult with each other as and when necessary and in any case review the working of the Agreement every six months.
Article – X
Subject to the approval of the Governments of India and Pakistan this Agreement shall come into force with effect from the 1st February 1957. It shall remain in force up to the 31st January 1960, provided that after the expiry of the first year it may be terminated by either party giving six months notice in writing to the other. The Schedules attached to the Agreement will be subject to revision by mutual consultation before the commencement of the years 1958 and 1959.
Done at New Delhi this Twenty-second day of January 1957.
AZIZ AHMED S. RANGANATHAN
For the Government of Pakistan For the Government of India
* The Governments of India and Pakistan ratified the Trade Agreement which came into force from February 1,1957.
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