(Japanese Note)

　New Delhi, July 22, 1998

　Excellency,I have the honour to refer to the Exchange of Notes dated July 16, 1996, between the Government of Japan and the Government of India concerning Japanese economic cooperation for the execution of the project for the Eradication of poliomyelitis (hereinafter referred to as "the Project").

　I have further the honour to refer to the recent discussions held between the representatives of the two Governments concerning additional Japanese economic cooperation to be extended with a view to strengthening friendly and cooperative relations between the two countries, and to propose on behalf of the Government of Japan the following arrangements:

1. For the purpose of contributing to the execution of the project by the Government of India, the Government of Japan will extend to the Government of India, in accordance with the relevant laws and regulations of Japan, a grant up to three hundred and ninety-two million yen (392, 000, 000) (hereinafter referred to as "the Grant").

2. The Grant will be made available during the period between the date of coming into force of the present arrangements and July 21, 1999, unless the period is extended by mutual agreement between the authorities concerned of the two Governments.

3.(1) The Grant will be used by the Government of India properly and exclusively for the purchase of polio vaccine necessary for the execution of the project and the services necessary for the transportation of the said polio vaccine to ports in India.

4. The Government of India or its designated authority will enter into contracts in Japanese yen with the United Nations Children's Fund (hereinafter referred to as "UNICEF") for the purchase of the polio vaccine and services referred to in paragraph 3. Such contracts shall be verified by the Government of Japan to be eligible for the Grant.

5.(1) The Government of Japan will execute the Grant by making payments in Japanese yen to cover the obligations incurred by the Government of India or its designated authority under the contracts verified in accordance with the provisions of paragraph 4 (hereinafter referred to as "the Verified Contracts") to an account to be opened in the name of the Government of India in a bank of Japan designated by the Government of India or its designated authority (hereinafter referred to as "the Bank")

(2) The payments referred to in sub-paragraph (1) above will be made when payment requests are presented by the Bank to the Government of Japan under an authorization to pay issued by the Government of India or its designated authority.

(3) The sole purpose of the account referred to in sub-paragraph (1) above is to receive the payments in Japanese yen by the Government of Japan and to pay to UNICEF that is the party to the Verified Contracts. The procedural details concerning the credit to and debit from the account will be agreed upon through consultation between the Bank and the Government of India or its designated authority.

6.(1) The Government of India will take necessary measures:

(a) to ensure prompt unloading and customs clearance pt ports of disembarkation in India and internal transportation therein of the polio vaccine purchased under the Grant;

(b) to exempt customs duties, internal taxes and other fiscal levies which may be imposed in India with respect to the supply of the polio vaccine and services under the Verified Contracts by UNICEF;

(c) to accord the personnel or persons concerned of UNICEF whose services may be required in connection with the supply of the polio vaccine and services under the Verified Contracts such facilities as may be necessary for their entry into India and stay therein for the performance of their work;

(d) to ensure that the polio vaccine purchased under the Grant be maintained and used properly and effectively for the execution of the Project; and

(e) to bear all the expenses, other than those covered by the Grant, necessary for the execution of the Project.

(2) With regard to the shipping and marine insurance of the polio vaccine purchased under the Grant, the Government of India will refrain from imposing any restrictions that may hinder fair and free competition among the shipping and marine insurance companies.

(3) The polio vaccine purchased under the Grant shall not be re-exported from India.

7. The two Governments will consult with each other in respect of any matter that may arise from or in connection with the present arrangements.

　I have further the honour to propose that this Note and Your Excellency's Note in reply confirming on behalf of the Government of India the foregoing arrangements shall be regarded as constituting an agreement between the two Governments, which will enter into force on the date of Your Excellency's reply.

　I avail myself of this opportunity to extend to Your Excellency the assurance of my highest consideration.

　(Signed) Hiroshi Hirabayashi
Ambassador Extraordinary and Plenipotentiary of Japan to India

　His Excellency
Mr. Montek Singh Ahluwalia
Finance Secretary of India

(Indian Note)

　New Delhi, July 22, 1998

　Excellency,I have the honour to acknowledge the receipt of Your Excellency's Note of today's date, which reads as follows:

"(Japanese Note)"

　I have further the honour to confirm on behalf of the Government of India the foregoing arrangements and to agree that Your Excellency's Note and this Note shall be regarded as constituting an agreement between the two Governments, which will enter into force on the bate of this reply.

　l avail myself of this opportunity to extend to Your Excellency the assurance of my highest consideration.

　(Signed) Montek Singh Ahluwalia
Finance Secretary of India

　His Excellency
Mr. Hiroshi Hirabayashi
Ambassador Extraordinary and Plenipotentiary of Japan to India