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India to moot SWIFT-like transactions at G20 meet

India will propose a SWIFT-like system used in international banking at the G20 meet to facilitate similar paperless transactions for cross-border trade.

The system will be based on an electronic bill of lading in the form of an interoperable digital document that is expected to boost trade and investment.

"Such a system can greatly facilitate global trade and also provide end-to-end visibility to all stakeholders including the authorities," a government official told ET.
An interoperable digital document allows data and information flow across systems, applications, or components accessible across countries.

The official said just like SWIFT in which cross-border financial systems talk to each other, there is a need for a similar mechanism for cross-border trade.

The Society for Worldwide Interbank Financial Telecommunications (SWIFT) is a vast messaging network used by financial institutions to quickly, accurately, and securely send and receive information to facilitate global money transfers.

"The idea is to eliminate paper for cross-border transactions," the official said, adding that seamless paperless trade can be a complete game-changer for global trade.

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This would need shipping liners, insurance companies, and banking entities to have a single common interface, the official said, adding that the effort is to work on a template that can be easily adopted by any country.
A bill of lading is a document that provides proof of ownership of goods and forms the basis for the release of payment.

New Delhi is of the view that such a system will make global trade paperless, reduce transaction costs substantially, and boost trade.

The template also includes standardised certificates and mutually recognised standards to bring about meaningful simplification and ease in trade, another senior government official said.

The standardisation will allow one country's infrastructure to speak to another country's infrastructure, bringing down the time taken in a transaction and the release of payment.

Indian customs have already introduced paperless customs clearances for imports and the country is showcasing its impact on the ground to make its case at the G20 discussion. New Delhi assumed the G20 presidency in December.

India could also use the template provided by the United Kingdom, which introduced a draft electronic trade documents legislation, based on the United Nations Commission on International Trade Law or UNCITRAL Model Law on Electronic Transferable Records. It allows the legal use of electronic transferable records both domestically and across borders.

"This could be a starting point," the first official said, adding that even standardisation and adoption of common certification will help trade, especially in the developing world.

India, which sees itself as a voice of the global south, is of the view that mutual recognition of standards and common standards can ease trade for developing and least developed countries.

The Open Magazine of India by Artmotion Network (https://magazine.armotion.com/)

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