United Nations TIR convention: India on Monday became the 71st country of the world to have joined the United Nations TIR Convention (Or, the Convention on International Transport of Goods Under Cover of TIR Carnets). TIR stands for Transports Internationaux Routiers or International Road Transport. PM Narendra Modi-led Union Cabinet had given its approval for India’s accession to TIR Convention and completion of necessary procedures for ratification, for its entry into force, in March this year.
The ratification of the international treaty is expected to boost India’s status as a trade transit hub in Asia and also help counter the impact of China’s OBOR (One Belt, One Road) project on India’s prospects as an emerging power. The TIR procedures allows the movement of goods under customs control across the international borders with the need of paying duties and taxes. The multilateral convention is in effect a kind of transport agreement among participating nations and also serves as a strong foreign policy statement.
As China moves ahead with OBOR project, India needs to play smartly to protect its economic strategic strengths. New Delhi is engaged with the US, Japan and Russia in three separate infrastructure projects that will help India grow. The most significant of the three is the North-South Corridor project in collaboration with Russia. The TIR Convention can be an instrument for movement of goods along the International “North-South” Transport (INSTC) Corridor, which India is developing along with Russia.
Moreover, it would be helpful in boosting trade with the Central Asian Republics and other Commonwealth of Independent States (CIS), particularly using ports in Iran like the Chabahar port.
Here are some important things to know about the TIR convention:
- The Customs Convention on International Transport of Goods under cover of TIR Carnets, 1975 (TIR Convention), is an international transit system under United Nations Economic Commission for Europe (UNECE).
- The convention facilitates seamless movement of goods within and amongst the parties to the Convention.
- Along with India, now there are 70 parties to the Convention, including the European Union.
- According to a March release by the Union Cabinet, the Convention will help Indian traders to have access to fast, easy, reliable and hassle free international system for movement of goods by road or multi-modal means across the territories of other contracting parties.
- By joining the convention, the need for inspection of goods at intermediate borders as well as physical escorts en route shall be obviated due to reciprocal recognition of Customs controls.
- As per the Convention, Customs clearance can take place at internal Customs locations thereby avoiding clearances at Border Crossing Points and ports that may often be congested.
- Movement under the TIR can be allowed by checking only the seals and the external conditions of the load compartment or the container thereby reducing border delays, transport and transaction costs thereby leading to increased competitiveness and growth for the trade and transport sectors.
- Compliance with the Convention ensures enhanced security in the supply chain as only approved transporters and vehicles are allowed to operate in terms of the Convention.
- The TIR Carnet represents a guarantee for Customs duties and taxes and traffic in transit. Hence, there is no need for payment of such taxes and duties en route.
- The TIR carnet also serves as a Customs declaration, and hence it precludes the need to file multiple declarations satisfying national laws of the different transiting countries.
- Becoming a member of the Convention does not result in any direct financial implication for the Government of India as it pertains to India’s accession to an international convention.