Introducing interoperable electronic bills of lading will improve cross-border trade’s efficiency, security, and transparency.
In order to facilitate seamless electronic Bills of Lading (eBLs)-backed Letter of Credit (LC) transactions between Singaporean and Indian banks and businesses, Singapore and India jointly created the TradeTrust Framework. The Ministry of Trade and Industry, the NITI Aayog, Enterprise Singapore, the Infocomm Media Development Authority, and business partners DBS, ICICI Bank, Maptrasco, Jindal Stainless, and A.P. Moller-Maersk worked closely together on this project.
The TradeTrust Framework marks an important turning point in the digitalization of trade between Singapore and India. It will open the door to more effective, safe, and transparent cross-border trade, which will help both countries’ economies thrive.
E-Bills of Lading are electronic counterparts of the standard paper Bill of Lading. It is a document that functions as both a contract between the shipper and the carrier and a receipt for items that have been sent. eBLs are used in place of paper Bills of Lading and provide a number of benefits.
First, it improves the efficiency since eBLs can be exchanged electronically, which eliminates the need for paper documents to be physically transported. This can save time and money, and it can also reduce the risk of errors. Second, enhanced security, because eBLs are stored in a secure database which makes them less vulnerable to fraud and tampering. Finally, it improves the transparency since all parties involved in a trade transaction can access the same information about the eBL, which improves transparency and reduces the risk of disputes.
Based on distributed ledger technology, the TradTrust Framework enables the secure and open recording of transactions. As a result, it is possible to monitor a trade transaction’s development in real time and make sure that everyone engaged has access to the same information. This will increase the speed and effectiveness of trade transactions while lowering fraud and error rates. Additionally, the framework is compatible with other platforms for trade finance, facilitating trade between Singapore and India.
The introduction of the TradeTrust Framework is anticipated to increase trade between Singapore and India’s SMEs, which are important contributors to economic growth in both nations. Trade between Singapore and India used to be frequently impeded by a lack of transparency and confidence. This was brought up by the use of paper documents, which were frequently misplaced or lost.
By offering a safe and open platform for commercial transactions, the framework will aid in addressing this problem. The current framework is anticipated to be further embraced by more firms in the coming years as it becomes the standard for trade financing in the area, even if a number of banks and enterprises in Singapore and India already conduct digitalized trading. The framework will aid in accelerating economic growth in both nations by enhancing the efficiency, security, and transparency of trade transactions.
The cutting-edge framework that is being presented is compatible with various trade finance platforms. This implies that it can be used to link companies in Singapore and India with companies outside. Furthermore, a wide range of companies, including banks, SMEs, and major organisations, are anticipated to employ this strategy.
An important step towards the digitalization of trade between Singapore and India has been reached with the introduction of the TradeTrust Framework.
Williams works as an analyst at Sernova Financial, while Saravanan is a professor of finance and accounting at IIM Tiruchirappalli.
