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Official Website of the Indian Embassy of Budapest, Hungary

Bilateral

Economic and commercial relations between India and Hungary
Economic co-operation between India and Hungary has a long history. Co-operation in this field was institutionalised in 1949 with the signing of a Rupee Trade Agreement which operated through the negotiation of annual protocols which fixed the products to be traded and the amounts thereof, with the trade being canalised through government agencies. This trade pattern continued till 1990 with the only modification being that in 1979 hard currency trade terms were introduced to replace the rupee payment / barter system that had been in operation till then. The inter-governmental Joint Commission was established in 1973.
Before the change over in Hungary in 1990, India was Hungary’s major partner in Asia both in trade and economic collaboration, even though this covered only a small proportion of Hungary’s international economic interaction. Hungary provided a useful first European market for several non-traditional Indian products including Maruti cars and Mopeds. Bilateral trade during the 1980’s remained above USD 100 million and in some years even touched $ 200 million. The major items of export from India before 1990 were tea, tobacco, pepper and other spices, de-oiled cakes, finished leather and shoe uppers, iron ore and pellets, cotton and jute goods, engineering goods, Maruti vehicles, chemicals and chemical products. Imports from Hungary included steel and steel products, chemicals, machine tools, pulses, peas, newsprint and engineering goods, especially for railways and power projects. Over 60 collaborations had also been established in India by Hungarian companies.
Sweeping reforms were undertaken at the beginning of the 1990’s in both India and Hungary with a view to integration with the world economy which changed the rules of the game in both countries but more dramatically in Hungary. As far as India was concerned, the economic changes in Hungary have meant that the old commercial links have virtually dissolved and new trading relations to replace them have been slow to emerge due to various reasons. While deregulation and liberalisation of the economies have thrown up fresh opportunities in both countries for enhanced and meaningful commercial and economic co-operation, there has not yet been any significant utilisation of these opportunities. However, in the last few years bilateral trade has once again increased.