In recent years, probably the most talked-about promising technology is 'blockchain', which has primarily been linked to cryptocurrencies. But this technology has the potential to revolutionise a variety of industries, including finance and trade.
On 15 October, the Finance Ministry's Central Board of Indirect Taxes and Customs (CBIC) began a prototype Electronic Cargo Tracking System(ECTS) initiative based on blockchain technology. The initiative seeks to achieve secure container documentation and GPS-based tracking.
According to a recent tweet from Prasar Bharati News Services (PBNS), CBIC India “explores new frontiers for promoting #DigitalIndia by adopting blockchain for tracking movement of containers to a bonded warehouse”.
This warehouse is located in Delhi Customs' Inland Container Depot or ICD Tughlakabad Import Commissionerate. It was reported that the Finance Ministry has cooperated with the Asian Development Bank for this initiative.
The Quartz reported that a senior government official said: “The test run is being done within Delhi…for liquor [which] is a sensitive item, and it changes hands very frequently. It has been done in consultation with all stakeholders—the customs, the importers, the warehouse owners.”
The official also noted that the technology simplifies record-keeping and management, which has piqued the interest of all stakeholders.
As per the official, if the test run is successful, the project might be rolled out across India following an assessment of costs, time savings and compliance.
The Use Of Blockchain Technology
Since sensitive tracking data is cryptographically encrypted in real-time, blockchain-based tracking systems are believed to be the most reliable and unbreakable in terms of security. This protects data from unauthorised users, and any attempts to tamper with it can result in security alerts.
According to PNBS, zones can also be created for alerts when trucks enter specific locations or geographical areas. Notifications can be sent via email, text message, or voice call for security reasons.
Additionally, a data-driven efficient tracking system can be upgraded with capabilities such as route optimisation to save time and money. It is simple to locate the idling vehicle.
The report also highlighted the fact about Smart Contact, stating that this is one of the most intriguing Blockchain applications because they allow a large number of actions to be self-executed when certain conditions in the blockchain code are met.
For example, if a truck arrives at a warehouse or gives over the cargo to someone else along the way, a smart contract might notify everyone on the Blockchain, make the shipping document available to the next party, and release the payment in self-execution mode immediately.
In this way, Blockchain might replace the paper-based systems, which require forms to pass through many channels and approvals, increasing the risk of loss and fraud while also adding a significant amount of administrative work.
However, according to Quartz, Sharat Chandra, a Bengaluru-based emerging tech evangelist said: “All transactions related to consignment flow can be stored on a Blockchain with a timestamp and unique cryptographic signature in a tamper-proof manner.”
“With permission access, information can be accessed at any point in time during the transit, thereby, reducing fraud and revenue leakages,” Chandra added.
The International Chamber of Commerce's 2020 Global Trade Survey found that the Covid-19 pandemic caused lockdowns and working from home are hastening the migration to digital commerce solutions, such as Blockchain.
It noted that 44 per cent of surveyed banks said that as they aim to assure future growth, technologies like Blockchain, digital trade, and online trading platforms are important areas of development and strategic focus in the near term. More than half of those polled agreed that a growing number of document types used in trade might be digital.
However, earlier this year, 15 Indian banks formed the Indian Banks' Blockchain Infrastructure Co to support blockchain-enabled projects, while one of them is anticipated to employ Infosys' blockchain-based infrastructure to process letters of credit, GST invoices, and e-way bills.
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