New Delhi
2 February 1966

The American Ambassador to the Indian Secretary, 
Department of Economic Affairs

New Delhi, 
February 2, 1966

Excellency :

I have the honor to refer to the Agreement effected by the exchange of notes of September 19, 1957, as, amended by the exchange of notes of December 7, 1959, between our two Governments relating to the investment guaranties which may be issued by the Government of the United States of America for investments in activities in India. After the conclusion of these agreements, legislation has been enacted in the United States of America modifying and augmenting the coverage to be provided for investors by investment guaranties that may be issued by the Government of the United States of America.

In the interest of facilitating and increasing the participation of private enterprise in furthering the economic development of India, the Government of the United States of America is prepared to issue investment guaranties providing such coverage as may be authorized by the applicable United States legislation for appropriate investments in activities approved by your Government provided that your Government agrees that the undertakings between our respective Governments contained in the aforementioned agreements will be applicable to such guaranties.

Upon receipt of a note from your Excellency indicating that the foregoing is acceptable to the Government of India and that such undertakings shall apply, the Government of the United States of America will consider that this note and your reply thereto constitute an Agreement between our two Governments on this subject, the Agreement to enter into force on the date of your note in reply.

Accept, Excellency, the renewed assurances of my highest consideration.

Sd /- 
CHESTER BOWLES

His Excellency
S. BHOOTHALINGAM, 
Secretary, 
Department of Economic Affairs, 
Ministry of Finance, 
Government of India,
New Delhi.

The Indian Secretary, Department of Economic Affairs,
to the American Ambassador

GOVERNMENT OF INDIA 
MINISTRY OF FINANCE
DEPTT. OF ECONOMIC AFFAIRS.
 

New Delhi, 
February 2, 1966

Excellency,

I have the honour to refer to Your Excellency’s note of even date which reads as follows :

“I have the honor to refer to the Agreement effected by the Exchange of Notes of September 19, 1957 as amended by the Exchange of Notes of December 7, 1959, between our two Governments relating to the investment guarantees which may be issued by the Government of the United States of America for investments in activities in India. After the conclusion of these agreements, legislation has been enacted in the United States of America modifying and augmenting the coverage to be provided investors by investment guarantees that may be issued by the Government of the United States of America.

In the interest of facilitating and increasing the participation of private enterprise in furthering the economic development of India, the Government of the United States of America is prepared to issue investment guarantees providing such coverage as may be authorized by the applicable United States legislation for appropriate investments in activities approved by your Government provided that your Government agrees that the undertakings between our respective Governments contained in the aforementioned agreements will be applicable to such guarantees.

Upon receipt of a note from your Excellency indicating that the foregoing is acceptable to the Government of India and that such undertakings shall apply, the Government of the United States of America will consider that this note and your reply thereto constitute an Agreement between our two Governments on this subject, the Agreement to enter into force on the date of your note in reply.

Accept, Excellency, the renewed assurances of my highest consideration.”

I have the honour to inform Your Excellency that the foregoing provisions are acceptable to the Government of India and it is our understanding that Your Excellency’s note and this reply constitute an Agreement between the two Governments on this subject, to enter into force from today.

Accept, Excellency, the renewed assurances of my highest consideration.

Sd /- 
S. BHOOTHALINGAM
Secretary to the Government of India.

His Excellency Mr. CHESTER BOWLES 
Ambassador of the United States of America, 
Shanti Path, Chanakya Puri,
New Delhi.

The Indian Secretary, Department of Economic Affairs,
to the American Ambassador
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPTT. OF ECONOMIC AFFAIRS

   New Delhi 
February 2, 1966 

Excellency, 

By Exchange of Notes on September 19, 1957 and December 7,  1959, the Government of India and the Government of the United  States of America agreed to institute the Investment Guarantee  Programme for guarantees against inconvertibility and expropriation. 

2. The Government of the United States of America is now preparing   to employ the full range of investment guarantees authorized by   law to encourage investments of United States nationals in   projects approved by the Government of India and has proposed   by its note of today’s date an amendment to the above-mentioned   exchanges of notes which would enable the Government of the   United States of America to issue such additional forms of   guarantees to which the Government of India has agreed. 

3. The understandings between the respective Governments in   respect of the said amendment are as set forth below. 

4. It is understood that there would be no claim for reimbursement   against the Government of India resulting from a payment made   by the Government of the United States on an extended risk   guarantee.

5. It is also understood that the procedures for intergovernmental  negotiations and arbitration contained in the prior exchanges of  notes would apply, with respect to any other additional forms of  guarantees only in the respect of losses attributable to acts of the  Government of India which involve questions of liability under  public international law.

6. It is further understood that the principle contained in paragraph   3 of the 1957 exchange of notes will be applied to any property   or commercial claims transferred to the United States in exchange   for compensation under a guarantee covering an investment in   an approved project. 

7. It is understood that when the risks covered by an extended risk   guarantee include those set forth in the 1957 and 1959 Exchanges   of Notes, the obligations of the Government of India and the Government of the United States for the risks covered in those exchanges of notes would remain unchanged. No other obligations would be required of the Government of India with respect to the additional forms of guarantees which the said amendment will allow to be written.

8. On receipt of a note from Your Excellency confirming that   this sets out the true understanding between the two   Governments in respect of the said amendment, this will   constitute an integral part of the agreement effected today   between our two Governments on this subject. 

9. Accept, Excellency, the renewed assurances of my highest   consideration.

Sd /- 
S. BHOOTHALINGAM
Secretary to the Government of India.

His Excellency Mr. CHESTER BOWLES 
Ambassador of the United States of America, 
Shanti Path, Chanakya Puri,
New Delhi.

The American Ambassador to the Indian Secretary,
Department of Economic Affairs

New Delhi, 
February 2, 1966

Excellency :

I have the honor to refer to Your Excellency’s note of even date which reads as follows :

By Exchange of Notes on September 19, 1957 and December 7, 1959, the Government of India and the Government of the United States of America agreed to institute the Investment Guaranty Program for guaranties against inconvertibility and expropriation.

2. The Government of the United States of America is now preparing to employ the full range of investment guaranties authorized by law to encourage investments of United States
nationals in projects approved by the Government of India and has proposed by its note of today’s date an amendment to the above-mentioned exchanges of notes which would enable the Government of the United States of America to issue such additional forms of guaranties to which the Government of India has agreed.

3. The understandings between the respective Governments in   respect of the said amendment are as set forth below. 

4. It is understood that there would be no claim for   reimbursement against the Government of India resulting   from a payment made by the Government of the United   States on an extended risk guaranty. 

5. It is also understood that the procedures for inter-   governmental negotiations and arbitration contained in the   prior exchanges of notes would apply, with respect to any   other additional forms of guaranties only in respect of losses   attributable to acts of the Government of India which involve   questions of liability under public international law.

6. It is further understood that the principle contained in   paragraph 3 of the 1967 Exchange of Notes will be applied   to any property or commercial claims transferred to the   United States in exchange for compensation under a guaranty   covering an investment in an approved project.

7. It is understood that when the risks covered by an extended  risks guaranty include those set forth in the 1957 and 1959  Exchanges of Notes, the obligations of the Government of  India and the Government of the United States for the risks  covered in those exchanges of notes would remain unchanged.  No other obligations would be required of the Government  of India with respect to the additional forms of guaranties  which the said amendment will allow to be written.

8. On receipt of a note from Your Excellency confirming that   this sets out the true understanding between the two   Governments in respect of the said amendment, this will   constitute an integral part of the Agreement effected today   between, our two Governments on this subject. 

9. Accept, Excellency, the renewed assurances of my highest   consideration.”

I have the honor to inform Your Excellency that the foregoing provisions are acceptable to the Government of the United States of America and it is our understanding that Your Excellency’s note and   this reply constitute an Agreement between the two Governments on  this subject, to enter into force from today.   Accept, Excellency, the renewed assurances of my highest  consideration.

Sd /-- 
CHESTER BOWLES