India gears up to ink pact for global customs transit system

Source: The Economic Times, Jan 16, 2017

NEW DELHI: India is gearing up to sign the Transports Internationaux Routiers (TIR), or the customs convention on the international transport of goods, as it eyes seamless trade connectivity with both Eurasian region and Southeast Asia.

This will allow India to take full benefit of International North South Transportation Corridor or INSTC, which enables access to Eurasian region via Iran, and Bangladesh-Bhutan-India-Nepal Motor Vehicles Agreement.

TIR is the only global customs transit system that provides easy and smooth movement of goods across borders in sealed compartments or containers under customs control from the customs office of departure to the customs office of destination. It plays an important role in boosting regional connectivity and facilitating cross-border trade flows, according to connectivity experts.

Since all members of INSTC, except India and Oman, are already signatories to TIR Convention 1975, custom issues and common documentation issues could be quickly resolved if India signs the convention and aligns its system with it, an official said. INSTC links Mumbai with St Petersburg through Iran and Azerbaijan.

It is a land- and sea-based 7,200 km long network comprising rail, road and water routes that is aimed at reducing costs and travel time for freight transport in a bid to boost trade between Russia, Iran, Central Asia, India and Europe. It will link South Asia to western and northern Europe.

A study conducted by the Federation of Freight Forwarders’ Associations in India showed that INSTC will be 30% cheaper and 40% shorter than the existing routes. The first test shipment between India and Russia through INSTC took place in October last year. Germany has also decided to trade with Iran via this connectivity project.

The TIR system operates with certain parameters – secure vehicles or container, international guarantee chain, TIR carnet, reciprocal recognition of customs controls, controlled access and TIR IT risk management tools. These elements guarantee that goods travel across borders with minimum interference en route and at the same time provide maximum safeguards to customs administration. The TIR system has a globally accepted electronic control system for integrated transit operations.

Aligning with the TIR system will also enable India to take full advantage of the Eurasian Economic Union (EEU). Negotiations for a free-trade agreement between India and EEU are expected to start early this year, according to officials.

EEU, comprising Russia, Kazakhstan, Belarus, Armenia and Kyrgyzstan, have an integrated single market of 183 million people and GDP of more than $4 trillion in purchasing power parity. The TIR system can also make Bangladesh-Bhutan-India-Nepal Motor Vehicles Agreement efficient for sub-regional cooperation on India’s eastern flank.

 

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