The TIR system is the international customs transit system with the widest geographical coverage.
As other customs transit procedures, the TIR procedure enables goods to move under customs control across international borders without the payment of the duties and taxes.
TIR Convention is more than a transport agreement and has a strong foreign policy element.
In a world where China’s ‘One Belt One Road’ (OBOR) is the dominating project straddling economics and geopolitics, India has no option but to play a better game if it wants to be counted as a serious rising power.
Welcoming India into the global transport arrangement, Umberto de Pretto, the secretary general of IRU which manages the TIR Convention, told TOI from Geneva that India’s accession would have a big impact on regional connectivity. “TIR can help implement the Bangladesh-Bhutan-India-Nepal (BBIN) Motor Vehicles Agreement by addressing policy incompatibility among the BBIN group. For example, Bangladesh does not recognise insurance policies made in India, Nepal or Bhutan. With TIR, there would be no need for bilateral arrangements as guarantors are covered by the global guarantee chain.”
One of the persistent problems for India’s connectivity projects has been the disconnect between transport and customs systems with different countries.
Once the systems are integrated with global norms, India reckons it will become easier to service African and Asian markets when the DMIC (Delhi-Mumbai Industrial Corridor) comes online.
China joined the TIR in 2016 when its giant inter-regional connectivity projects began to take off. As India ramps up its connectivity ambitions this is a necessary step. For instance, the BBIN motor vehicles agreement needs this convention to make it operational.
“BBIN MVA lacks any guaranteeing mechanism to protect customs revenue in the event of goods getting diverted to the national territory of the state through which it is passing. Without such mechanism, the MVA could not be operational,” he said.
Joining the convention “would be a major economic boost to South Asia, eventually connecting the region to the rest of the world. It could become a key link between South and South-East Asia, particularly as China is already a TIR member, and connects transit routes east to Myanmar, Thailand, Laos, Cambodia and beyond”.
He added it can link India to maritime transport routes across the entire Asia-Pacific region.
A statement from IRU (International Roads Union) said this was “part of India’s multi-modal transport strategy that aims to integrate the economy with global and regional production networks”.
(This article was originally published in The Times of India