SMART WAY TO MAN­AGE KYC

EKYC en­ables cus­tomers to sub­mit their KYC de­tails just once to ODEX and share the same with mul­ti­ple stake­hold­ers. This pro­vides a con­sid­er­able sav­ing in terms of cost and time for all the par­ties in­volved

Maritime Gateway - - Contents -

The In­ter­na­tional North South Trans­port Cor­ri­dor (INSTC), a multi-mo­dal net­work of sea, rail, and road for mov­ing freight and pas­sen­ger be­tween In­dia, Cen­tral Asian coun­tries, Rus­sia and Eu­rope was es­tab­lished in Septem­ber 2000. It was a joint ini­tia­tive of In­dia, Iran and Rus­sia, which came into ef­fect in 2000 and was rat­i­fied in 2002. Azer­bai­jan joined the agree­ment in 2005. After al­most 18 years what has been the progress? Can INSTC be a re­al­ity? What is there for In­dia?

Fed­er­a­tion of Freight For­warders As­so­ci­a­tion of In­dia had re­cently or­gan­ised a sem­i­nar on INSTC. It was at­tended by del­e­gates from mem­ber states and from Gov­ern­ment of In­dia.

The INSTC has been de­scribed as In­dia’s re­sponse to China’s Belt and Road Ini­tia­tive. At present, it has 10 mem­ber coun­tries apart from In­dia, Iran, Rus­sia and Azer­bai­jan. They are Be­larus, Ukraine, Kaza­khstan, Uzbek­istan, Kyr­gyzs­tan, Ta­jik­istan, Turkey, Ar­me­nia, Syr­ian Arab Repub­lic and Oman; Bul­garia is an ob­server mem­ber.

Shankar Shinde, Manag­ing Direc­tor Global Ex­press Mul­til­o­gis­tics & ECM FFFAI said the cor­ri­dor would be vi­able only if the costs and the time are com­pet­i­tive to the con­ven­tional route.

Prin­ci­pally there would be two routes. One would be from Bandar Ab­bas to Bandar An­zali on the Caspian Sea in Iran and the other from Bandar Ab­bas to Amirabad also on the Caspian Sea in Iran. With these two ports on the Caspian Sea ex­porters from In­dia can reach out to mul­ti­ple Cen­tral Asian coun­tries and Rus­sia and Azer­bai­jan, cov­er­ing a to­tal dis­tance of 7200 kms.

There are very ob­vi­ous ad­van­tages in mov­ing freight along this route.

The tran­sit time to the euro­pean coun­tries would al­most be half of the tra­di­tional route via the Suez chan­nel. The trans­porta­tion cost and the tran­sit time is ex­pected to be 30% and 40% less re­spec­tively. Few coun­tries ex­ist along the route which would make the bor­der cross­ings bu­reau­crat­i­cally less cum­ber­some.

Dr. Anup Wad­hawan, Com­merce Sec­re­tary, Gov­ern­ment stated that the project to be ef­fi­ciently op­er­a­tional, it would have to have the state of art in­fra­struc­ture. It should be able to flaw­lessly ac­com­mo­date mul­ti­modal oper­a­tions across sea ports. It has to be cost ef­fec­tive. The pro­ce­dures such as those re­lat­ing to Cus­toms, the doc­u­men­ta­tion re­lated to clear­ances, the ap­provals all have to be mod­ernised or digi­tised and pa­per­less such that the trans­ac­tion costs are min­imised and the obli­ga­tions im­posed on the users are min­imised.

But there are other hard re­al­i­ties that need to be cir­cum­vented. The Azer­bai­jan Am­bas­sador to In­dia, Asharaf, un­equiv­o­cally stated that the role of Iran in this project was cen­tral to the whole agree­ment. He hoped that the sanc­tions im­posed by the US would only be tem­po­rary. The Amer­i­can stance on Iran have made pri­vate sec­tor in­vestors wary about the INSTC project.

The rail link be­tween Asthara in Azer­bai­jan and Rasht in Iran is yet to be es­tab­lished.

On the tech­ni­cal side the dif­fer­ent sizes in the rail­way gauges be­tween the rail­ways of the par­tic­i­pat­ing coun­tries con­tin­ues to pose a ma­jor prob­lem. New rail­way lines need to be con­structed to make the cor­ri­dor vi­able.

Since cur­rently there is no rail link be­tween Asthara in Azer­bai­jan and Rasht in Iran, the ship­ping lines are re­luc­tant to come for­ward to is­sue a through Bill of Lad­ing upto the des­ti­na­tions. Na­tional car­ri­ers should be en­cour­aged to carry freight on the sea route be­tween In­dia and Iran. NVOCCS would be more likely to come for­ward to han­dle the end to end lo­gis­tics.

In 2014 when a dry run was made from JNPT to Rus­sia via Bandar Ab­bas it was found that the cost was al­most dou­ble of the ex­ist­ing route. Fur­ther many of the pro­ce­dures re­lat­ing to se­cu­rity, bank­ing, Cus­toms, sin­gle win­dow clear­ance re­mained to be threshed out.

Once fully func­tional, INSTC will sub­stan­tially re­duce time taken and cost for trans­port of goods be­tween In­dia and Eu­rope and the Cen­tral Asian coun­tries. There would be a sig­nif­i­cant in­crease in eco­nomic ac­tiv­i­ties be­tween In­dia and Rus­sia and other coun­tries in the neigh­bour­hood. In the next five years, the Rus­sian rail­ways in­tend to in­crease the con­tainer vol­umes to 1.6 mil­lion con­tain­ers per year. Of which a sig­nif­i­cant amount would be through the INSTC.

There is still a long way to go. Digi­ti­sa­tion, pa­per­less trans­ac­tions, track­ing cargo on line of the cargo is now the norm. The users would ex­pect all these fa­cil­i­ties to be up and run­ning. These are achiev­able be­cause many of the par­tic­i­pat­ing coun­tries are sig­na­to­ries to the Trade Fa­cil­i­ta­tion Agree­ment (TFA). There are how­ever still miles to go for

INSTC to be op­er­a­tional.

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