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India is on the move towards digitisation in trade. Our attendance at this year’s GTR India Trade and Treasury Conference in Mumbai certainly confirmed that. With delegates from more than 120 companies and the key banks in the region all energetically networking, we had an excellent opportunity to establish new contacts, strengthen existing relationships and take the pulse of the Indian market.
From our perspective, India looks very positive, advancing towards the national government’s target of increasing digitisation in all spheres of life, whether through a massive rollout of internet access, electronic payments and digital ID systems, or more importantly for us, through increasing readiness to convert to electronic presentation in trade documentation.
A strong sense of the upbeat approach to digitisation came in a panel I moderated looking at “Trade digitisation and its application for India: successfully implementing fintech into your company model”. This involved a discussion between Rugved Dhumale, Deputy Treasurer, Petrochemicals at Reliance Industries, and Rakesh Patwari Head of Business Development, Global Trade and Receivables Finance at HSBC India.
The pair reflected on the first digital transaction between Reliance and a customer in Italy, supported by HSBC and which was completed using the Bolero platform. Since it was also the first document exchange of its kind in India, they also discussed the potential benefits and challenges of wider trade digitisation for the country as a whole.
Rugved explained that the transaction had been two years in the planning, but it was the first step in the growing acceptance of digital trade documentation. Although there were various technologies available, the advent of Bolero meant the time for digitisation had arrived, given its ability to accommodate complexity and the differing nature of each transaction for the benefit of all of the counterparties.
Rakesh said digitisation was part of a “generational shift” in international trade and part of HSBC India’s role as a facilitator. “Our purpose is to make the process simpler and smoother, and this (Bolero) brings visibility to every single stakeholder,” he explained.
Having the backing of such huge and respected Indian companies and institutions such as Reliance Industries and HSBC India is very significant step to help to increase digitisation in trade documentation. At Bolero we already have important Indian banks as members of our community and after speaking to many of the corporate representatives at the event, it became clear that our digital innovation is now resonating very well among the country’s exporters.
There clearly is a groundswell of interest, encouraged by the recent report from Maersk and the Confederation of Indian Industry. Entitled Stimulating India’s EXIM by reducing costs of trade this report showed how Indian exports could be boosted by between five and eight per cent if greater priority were given to infrastructure improvements, digitisation and the reduction of regulatory burdens and delays. It demonstrated that inefficiencies can account for anything between 38 and 47 per cent of the total logistics cost. A reduction of 10 per cent in these costs could yield more than $5 billion cost savings each year, a figure that should catch the eye of Indian regulators as well as the country’s corporates.
Although India is not currently as advanced as China in trade digitisation, the potential is huge, given that export growth projections for the country are considerably more than seven per cent for 2017-2018. In China, where Bolero already has many important customers, the realisation that exports will be required to sustain stellar growth rates has prompted the government to push the pace with a series of steps including the establishment of export credit facilities.
Nonetheless, in India, there is now a real desire to embrace digitisation, led by companies with the vision and enthusiasm such as Reliance. There was no doubt that there is an upbeat mood in this fast-developing economy and trade digitisation should be very much at the centre of this remarkable country’s rapid emergence as one of the world’s great exporting economies.