Context: Pandemic has made it necessary to digitise procedures and lower human intervention to facilitate trade across borders. Recognizing digitisation of procedures and lower human intervention as the two major pillars that drive trade across borders, India has embarked on multiple reforms.
Steps taken by government to digitise cross border trading

• Post India’s ratification of the Trade Facilitation Agreement of the World Trade Organization in April 2016, following reforms focused on infrastructural upgradation, digitisation and automation.

Direct Port Entry and Direct Port Delivery
Radio Frequency Identification system and Single Window Interface

• The Port Community System: It is aimed at seamlessly integrating all maritime trade-related stakeholders on a single platform.
• e-SANCHIT (e-Storage and computerised handling of indirect tax documents): Aimed at reducing human intervention.Pandemic effect:

India’s exports in April 2020 have contracted by 60% year-on-year.

• There has been a drastic drop in the cargo handled by the Jawaharlal Nehru Port in April 2020 as compared to April 2019 which is indicative of the drop in India’s trade.
• The slump in international trade due to the pandemic is understandable. As countries slowly emerge out of this, new demand and supply chains will form, which will be located in countries that re-orient their existing trade structures.
• The significance of a more digitised trading environment, with minimal manual touchpoints, will increase.
• With the current crisis, there will be the demand for a greater leap in trade facilitation measures to expedite the movement, release and clearance of goods.

Challenges

• While different interventions of the government have positively developed the logistics sector, there are still some gaps that need to be bridged.
• Some of the delays in moving to a paperless trade ecosystem can be attributed to gaps in the effective implementation of digital platforms. The shortcomings in the functionality of the digital system and technical glitches result in limited use of the system.
• The lack of connectivity/message exchanges between different stakeholders’ systems results in delayed cargo clearance.
• The lack of awareness, acceptability and adaptability of new initiatives among the users is a concern, due to issues with respect to training and capacity building amongst the users, restricting the optimal utilisation of digital platforms.
• There is also the issue of standardisation and coordination of processes across ports.

Suggestion

• The present crisis presents an opportunity to develop new systems and enhance existing platforms.
• Measures to facilitate and expedite the clearance process to make it more automated, online and paperless should be promoted.
• There is a need to further augment the digital infrastructure in the trade ecosystem.
• Enhanced integration of systems and coordination between the different stakeholders with the sharing of input data between them on a real-time basis should be promoted.
• Promoting the use of a multi-stakeholder single platform like the Port Community System can streamline EXIM procedures.
• These efforts will be instrumental towards improving India’s trading ecosystem and achieving the desired target of Ease of Doing Business (ranking under 50). The more digitised our trade facilitation infrastructure, the more immune we will be to future disruptions.