India’s cabinet ratifies customs convention on border trade

India on Monday ratified a convention that 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.

The union cabinet chaired by Prime Minister Narendra Modi gave its approval for India's accession to the Customs Convention on International Transport of Goods under cover of TIR Carnets (TIR Convention) and for completion of necessary procedures for ratification, for its entry into force.

A "carnet" or ATA carnet is an international customs and temporary export-import document. It is used to clear customs in 86 countries and territories without paying duties and import taxes on merchandise that will be re-exported within 12 months.

Joining the convention obviates the need for inspection of goods at intermediate borders as well as physical escorts en route due to reciprocal recognition of customs controls.

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 will ensure enhanced security in the supply chain as only approved transporters and vehicles are allowed to operate in terms of the convention. As the TIR carnet represents a guarantee for customs duties and taxes and traffic in transit, 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.

The TIR convention can be an instrument for movement of goods along the International "North-South" Transport (INSTC) Corridor and 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.

The Customs Convention on International Transport of Goods under cover of TIR Carnets, 1975 (TIR Convention), is an international transit system under the auspices of the United Nations Economic Commission for Europe (UNECE) to facilitate the seamless movement of goods within and amongst the parties to the convention. At present, there are 70 parties to the convention, including the European Union.