Improving Transnational Transport Corridors
In the OIC Member Countries: Concepts and Cases
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path. However FFFAI did not accept this and asked for reductions on charges and fees instead.
The Government of Iran cannot meet this expectation as it means that they need to convince
the Custom. In order to guarantee this, first it should be evident that the trade volumes from
India are significantly high to reduce the charges and fees.
Other efforts have been initiated by the Government of Iran to increase the attractiveness of
the corridor, such as:
1. Ports & Maritime Organization (PMO) is giving the maximum benefits to transit cargos,
in terms of tariffs, port services, and investments. The benefits among others are:
 In other countries, transit cargos normally have long waiting times to be cleared
due to the maximum quotas applied by the ports. This is not happening at the
Iranian ports as transit cargos are prioritized over captive cargos. Furthermore,
special yards are dedicated for transit and exports.
 PMO is ready to dedicate a piece of land to countries that are willing to set up
their factories in Iranian ports (free taxes and custom duties).
 In order to make transit cargos more attractive, PMO gives incentives to its port
service providers that are targeting transit cargos (lower price, longer contract).
Consequently, shippers of transit cargos also pay less.
2. The Railways of the Islamic Republic of Iran has initiated the following:
 Iran, Azerbaijan, and Georgia have an agreement to decrease the rail tariff and to
improve the speed of the trains.
 Iran, Azerbaijan, and Russia have an agreement for handling cargos from Mumbai
to Moscow. The agreement is focusing on transit time and tariff. In terms of transit
time, the strategies are to adjust the train timetables to create an efficient total
transit time and to reduce the waiting times at the borders. These three countries
have also decreased the tariff with more than 50%. In Iran, there is no price
increase since 2008 despite the inflation and economic situation. Iran has also
managed to convince the neighboring countries to have a fixed common railway
tariff in ton-km and container-km for INSTC.
3. The Government of Iran has created Port Special Economic Zones (SEZs) that offer
advantages and legal facilities such as entry and exit of cargo without being charged
(port dues, customs tariffs and commercial interests), exemption from all other tariffs
payable inside the country, and possibilities for extending cargo resting time within
these zones.
Yet the cargo traffic through INSTC is still very low, most probably due to issues like banking
connections and documentation and procedures for cargo.