Trade agreement between India and Pakistan signed on January 23, 1975 is a follow-up of an earlier agreement signed in 1974 facilitating trade between the two countries. It contains a Memorandum of Understanding setting out details of financial transaction.

The Government of Pakistan and the Government of India,
Desiring to develop, extend and strengthen the commercial relations between the two countries on the basis of equality and mutual benefit,
Have agreed as follows:
Article – I
The two Governments shall, subject to the laws, regulations and procedures in force in their respective countries from time to time, take all appropriate measures to facilitate, strengthen and diversify trade between the two countries.
Article – II
In order to advance the objectives of Article I of this Agreement, the two Governments shall also encourage relevant enterprises and organizations of their respective countries to explore the scope for long-term contracts and where appropriate, to conclude such contracts.
Article – III
The two Governments undertake to grant import/export licenses in accordance with their respective laws and regulations relating to import/export and foreign exchange. To begin with, and unless otherwise agreed, trade will be conducted on Government-to-Government basis or through Government controlled Trade Corporations of the two countries.
Article – IV
The two Governments shall accord to each other in their trade regulations the most favoured nation treatment in accordance with the provisions and decisions of the GATT.
Article – V
The two Governments agree to cooperate effectively with each other to prevent infringement and circumvention of the laws, rules and regulations of either country in regard to matters relating to foreign exchange and foreign trade.
Article – VI
In order to advance the objectives of this Agreement each Government shall, subject to the laws and regulations in force in its country encourage and facilitate the holding within its territory of trade and fairs exhibitions by enterprises and organizations of the other country.
Article – VII
All payments and charges in connection with trade between the two countries shall be effected in freely convertible currency in accordance with the foreign exchange regulations in force from time to time in each country.
Article – VIII
The goods exported from Pakistan and India under this Agreement will be of Pakistan and Indian origin and for consumption in India and Pakistan respectively. The said goods shall not be re-exported to third countries.
Article – IX
For the purpose of promoting the aims of this Agreement a Committee of representatives to be designated by the respective Governments shall be established.
The Committee shall meet at least once a year, or as often as may be mutually agreed upon alternatively in India and Pakistan.
The Committee shall:
(a) Review the implementation of the provisions of this Agreement;
(b) Examine and recommend measures for the solution of problems, which may arise in the implementation of this. Agreement or in the course of the development of trade between the two countries;
(c) Consider proposals made by either of the Governments, within the framework of this Agreement, aimed at further expansion and diversification of trade between the two countries.
Article – X
This Agreement shall come into force on the date of signature and shall be valid for a period of one year. Thereafter, it shall automatically be extended for two years unless, within a minimum period of three months prior to the expiration of the initial period of validity of one year, either Government gives to the other a written notice of its intention to terminate the Agreement.
Done at Islamabad on twenty-third day of January 1975 in two originals in English both texts being equally authentic.
For the Government of India For the Government of Pakistan
Secretary to the Govt. of Secretary to the Govt. of
India Pakistan

Ministry of Commerce Ministry of Commerce
Leader of the Indian Delegation Leader of the Pakistan Delegation

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