News / A smoother road ahead for freight as India joins TIR Convention

© Daniel Prudek

India is set to further simplify its road transport sector after being approved to use the UN TIR Convention.

The decision allows India to harmonise its transport with global standards and boost overland trade and integration across south Asia.

In combination with the likely implementation of the federal Goods and Services Tax (GST) in July, costs should reduce while transport will get faster.

TIR, the streamlined international system for the movement of goods by road, will support India’s international North-South transport corridor, a key trade route between Central Asia and the CIS in the north and India’s southern ports and others beyond, such as Chabahar in Iran.

“This landmark decision puts India firmly on the road to adopting harmonised global transport standards,” said IRU secretary general, Umberto de Pretto. “India will soon reap the benefits of more efficient and faster freight transit, boosting trade and helping businesses across the country prosper.”

TIR’s single transit document also significantly reduces the risk of presenting inaccurate information, while only approved transporters and vehicles are allowed to operate.

The Indian government has also greenlighted the next step for GST, which is expected to alleviate costs and end transport delays caused by stoppages at numerous Customs points across India.

A 2015 joint report by the Transport Corporation of India and Indian Institute of Management revealed that the stoppage expense – the average expense incurred due to the stops along the way, such as check-posts and customs – per tonne-km has increased from ₹0.16 per tonne-km to ₹0.28, a 75% increase between 2011-12 and 2014-15.

TIR will also be critical in helping India implement the WTO’s Trade Facilitation Agreement, which came into force last month.

In a separate move, Bangladesh, Bhutan, India and Nepal have signed a Motor Vehicles Agreement to improve cross-border transport.