India to allow vehicles coming from neighbouring countries

Written by Timsy Jaipuria | New Delhi | Updated: Feb 20 2014, 10:50am hrs
India will soon start issuing international permits for vehicles entering the country from some of its neighbours, in sync with the plan to build a dedicated international highway. According to sources, such permits would be issued to both commercial and passenger vehicles from Bangladesh and the facility will later be extended to other nations like Nepal, Bhutan and Mayanmar.

"An international permit would mean that both passenger and commercial vehicles from another country can enter India despite their being registered in their native country," said a senior road ministry official. The proposed international highway is expected to help increase intra-SAARC trade, which is now much below its potential.

Since such a system will have to be implemented with greater security, these permits would come with an IT tracker showing the movement of vehicles. "This plan has got an approval from the ministries of home, finance, defence and external affairs, and it is for the ministry of roads and transport to implement the same," the official added. For this, the finance ministry will have to improve customs check-post facilities.

The move comes after India committed at the SAARC summit that it would encourage road connectivity and allow vehicles from some SAARC nations to enter the country, to boost the exchange of culture and trade.

Increasing rail, port and air connectivity among SAARC countries is also on the cards. "There is huge infrastructural constraint in the region, and we need to address that though greater land and air connectivity and creating port linkages. We need to have freight corridors that will be able to bring down transit costs and road is the first phase of this step," the official said.

The official said the first permit can be issued as early as 2016.

Experts say such a step would have a multiplier effect on the revenues of India, be it in terms of increase in collections of excise and customs duties, or in terms of imports, exports, and the revenues earned by transport division for these permits.

"A decision is already in place by the Trade & Economic Relations Committee for a calibrated approach to improve trade between SAARC countries, and India is working towards first increasing the connectivity within the region," the official said.

SAARC is an eight-nation group that includes Afghanistan, Bangladesh, Bhutan, India, Maldives, Sri Lanka, Pakistan and Nepal. The SAFTA agreement on goods came into force on January 1, 2006, which required the developing countries India, Pakistan and Sri Lanka to bring down their customs duties to 20% in the first phase of the two-year period ending in 2007, and to zero by 2016 in phases.

Also, the negotiations for the Agreement on Promotion and Protection of Investment are also on.