Technology is making trade more trendy

In past decades, global trade grew with consistent investment in infrastructure such as ports, shipping lines and cargo facilities. Now, global trade will be driven by high-tech and digitization

Login to the ICEGATE portal of the Indian Customs department and a chatbot named Vaani pops up to support the user — a new-age support for a centuries-old business. Indian Customs Electronic Data Interchange Gateway (ICEGATE) is the national portal of India’s Central Board of Indirect Taxes and Customs (CBIC), which provides e-filing services to the trade, cargo carriers and other trading partners electronically.

CBIC says that ICEGATE serves as an interface between trade users and the Customs department, and acts as a hub for exchanging information with external trading partners involved in international trading. According to the government, ICEGATE has aided in collection of customs duty worth Rs 1.3 trillion annually. The department has also implemented an internal automation of the Custom House for “a comprehensive, paperless, fully automated customs clearance system that makes the functioning of Customs clearance transparent and efficient.”

Similarly, the National Logistics Portal (marine) is a single window for all trade processes of the logistics sector spread across the country, covering all modes of transport in waterways, roadways and airways, along with an e-marketplace to provide a seamless end-to-end logistics service coverage.

India is trying to accelerate the digitisation of trade-related services. These efforts are part of a global shift involving the use of emerging technologies for global trade. Digitisation of trade documentation can save billions of dollars. Trade documentation is a paper-intensive and resource-consuming process. A McKinsey analysis indicates that the bill of lading accounts for between 10 and 30 per cent of total trade documentation costs. An electronic bill of lading could save $6.5 billion in direct costs and enable $40 billion in global trade, McKinsey says. The Digital Container Shipping Association (DCSA) says its nine ocean-carrier members are committed to 100 per cent adoption of an electronic bill of lading by 2030. 

 

A report by the World Trade Organisation (WTO) identifies the 5 Gs of trade-tech, which play a critical role in supporting trade digitalisation and its wide-scale adoption:

• Global data transmission and liability frameworks 
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• Global legal recognition of electronic transactions and documents 
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• Global digital identity of persons and objects 
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• Global interoperability of data models for trade documents and platforms 
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• Global trade rules access and computational law.

“New technologies and business models are changing how services are produced and supplied, blurring already grey distinctions between goods and services and modes of delivery and introducing new combinations of goods and services. A smart fridge requires market access not only for the good, but also for the embedded service. And an article produced by 3D printing, for example, may cross a border as a design service, but becomes a good at the moment of its consumption,” says an OECD paper. 

India has submitted two papers to the WTO to discuss consumer protection, digital infrastructure and e-commerce. India is keen that binding rules on e-commerce and the use of trade technology should be advantageous to developing countries. 

The EU and India set up a Trade and Technology Council on digital governance earlier this year. This group will work jointly on areas of mutual interest, such as digital connectivity, artificial intelligence, 5G/6G, high-performance and quantum computing, semiconductors, cloud systems, cybersecurity, digital skills and digital platforms. 

In past decades, global trade grew with consistent investment in physical infrastructure like ports, shipping lines and cargo facilities. In the new era, global trade will be driven by new technologies and digitisation. The rise of cross-border e-commerce will not just be limited to products. The trade in digital services and metaverse solutions will drive a new dimension of globalisation.