Singapore and India have launched the TradeTrust Framework, a joint initiative to enable interoperable Electronic Bill of Lading (eBL)-backed Letters of Credit (LC) transactions between banks and companies in Singapore and India. The project was carried out in close collaboration with government agencies (Ministry of Trade and Industry, NITI Aayog, Enterprise Singapore and Infocomm Media Development Authority) and industry partners (DBS Bank, ICICI Bank, Maptrasco, Jindal Stainless and AP Moller) of – Maersk).
The Trade Trust Framework is a major milestone in the digitization of trade between Singapore and India and will pave the way for more efficient, secure and transparent cross-border trade and boost economic growth in both countries.
what is it? An electronic bill of lading is a digital version of a traditional paper bill of lading. It is a document that serves as a receipt for goods shipped and a contract between the shipper and the carrier. Electronic bills of lading are used to replace paper bills of lading and offer several advantages.
First, it increases efficiency, as e-bills of lading can be exchanged electronically, eliminating the need to physically transport paper documents. This saves time and money, and also reduces the risk of errors. Second, enhanced security, as electronic bills of lading are stored in a secure database, which makes them less vulnerable to fraud and tampering. Finally, it increases transparency as all parties involved in a trade transaction have access to the same information on the electronic bill of lading, increasing transparency and reducing the risk of disputes.
The TradTrust framework is based on distributed ledger technology that records transactions securely and transparently. This makes it possible to track the progress of trade transactions in real time and ensures that all parties involved have access to the same information. This will help reduce fraud and errors and increase the speed and efficiency of trade transactions. Additionally, the framework is also interoperable with other trade finance platforms, which will facilitate trade between Singapore and India.
The launch of the trade trust framework is expected to boost trade between Singaporean and Indian small and medium enterprises (SMEs), which are the main drivers of economic growth in both countries. In the past, trade between Singapore and India was often hampered by a lack of trust and transparency. This is due to the use of paper documents, which are often lost or misfiled.
The framework will help address this challenge by providing a secure and transparent platform for trade transactions. While many banks and companies in Singapore and India have already conducted digital transactions, further adoption of digital transactions by more businesses is expected in the coming years as the framework becomes the standard for trade finance in the region. The framework will help boost economic growth in both countries by making trade transactions more efficient, secure and transparent.
The proposed innovative framework is interoperable with other trade finance platforms. This means it can be used to connect businesses in Singapore and India with those in other countries. Furthermore, the measure is expected to be used by a wide range of businesses, including banks, SMEs and large corporations.
The launch of the Trade Trust Framework is a major milestone in the digitization of trade between Singapore and India.
Saravanan is a professor of finance and accounting at IIM Tiruchirappalli and Williams is an analyst at Sernova Financial
