Customs Convention on International Transport of Goods (TIR Convention)
India has signed accession to this convention. By joining the convention, Indian traders will get 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.
What is TIR Convention?
- TIR Carnets, 1975 (TIR Convention) is an international transit system under the auspices of the United Nations Economic Commission for Europe (UNECE).
- It facilitates the seamless movement of goods within and amongst the Parties to the Convention.
- At present there are 70 parties to the Convention, including 69 states and the European Union.
- It covers customs transit by road and other modes of transport (e.g., rail, inland waterway, maritime transport), as long as at least one part of the total transport is made by road.
- It also serves as a Customs declaration, and hence it precludes the need to file multiple declarations satisfying national laws of the different transiting countries.
Why has India joined it now?
- India’s decision to join the convention is part of its multi-modal transport strategy that aims at integrating Indian economy with global and regional production networks through better connectivity.
- To counter China’s OBOR effect.
- It will help India in implementing the World Trade Organization’s Trade Facilitation Agreement which it has already entered into this year.
- It will improve India’s cross-border road transport.
- On the eastern front, it will help in integrating with Myanmar, Thailand, Bangladesh, Bhutan and Nepal.
- On the western front, it will help in transporting cargo along the International North-South Transport Corridor via Chabahar port in Iran.
- Further, it will give access to landlocked Afghanistan and the energy-rich Eurasian region.
- It can help in implementing the Bangladesh-Bhutan-India-Nepal (BBIN) Motor Vehicles Agreement by addressing policy incompatibility issues among the BBIN nations.
What are the benefits of joining this convention?
- The need for inspection of goods at intermediate borders as well as physical escorts en route shall be obviated by joining the TIR Convention, due to reciprocal recognition of Customs controls.
- It will avoid clearances at Border Crossing Points and ports that may often be congested, as under the convention customs clearance can take place at internal Customs locations.
- Movement under the TIR is allowed by only checking the seals and the external conditions of the load compartment or the container.
- Thus, it will play important role in reducing border delays, transport and transaction costs thereby leading to increased competitiveness and growth for the trade and transport sectors.
- Compliance with the Convention will ensure enhanced security in the supply chain as only approved transporters and vehicles are allowed to operate under it.
- It also represents a guarantee for Customs duties and taxes and traffic in transit, so there is no need for payment of such taxes and duties en route.
- It can serve as an instrument for movement of goods along the International “North-South Transport Corridor (INSTC) particularly using ports in Iran like the Chabahar port.
- It will be helpful in boosting trade with the Central Asian Republics and other Commonwealth of Independent States (CIS).