Government of India pilot testing blockchain technology to modernize logistic industry

The initiative aims to achieve secure documentation and GPS-based tracking of containers

The government of India started trials of using blockchain technology in domestic trade operations and services. 

The central board of indirect taxes and customs under the country’s finance ministry launched a pilot electronic cargo tracking system (ECTS) project based on blockchain technology. This aims to achieve secure documentation and GPS-based tracking of containers.

The test run is being carried out at the Inland Container Depot (ICD) of the Tughlakabad Import Commissionerate, which accounts for about 20% of the total tax revenues under Delhi Customs.

Once this test run is successful, the initiative may be launched across India after an assessment of costs, time savings, and compliances, a senior government official said.

The cargo traffic at all airports alone stood at 264,509 tonnes in August this year, according to data by the Airports Authority of India (pdf). At the country’s major ports, the figure was 57.59 million tonnes in the year-ago period, the Indian Ports Association said in a statement.

“The test run is being done within Delhi for liquor”. 

“Liquor 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.”

All stakeholders have shown keen interest as the technology eases record-keeping and management, the official added.

How does blockchain technology work for trade?

Analysts believe blockchain technology will ensure secure and seamless documentation among network participants as all details are recorded digitally.

“All transactions related to consignment flow can be stored on a blockchain with a timestamp and unique cryptographic signature in a tamper-proof manner,” Sharat Chandra, a Bengaluru-based emerging tech evangelist said. 

“With permission access, information can be accessed at any point in time during the transit, thereby, reducing fraud and revenue leakages.”

Conventional paper-based systems, besides being risky, pile up red tape, given the number of approvals involved.However, such new initiatives can be more secure if the blockchain nodes with each party are on a decentralised server.

A blockchain node is a digital ledger that records all cryptocurrency transactions and makes information available to everyone via a connected device. Its main purpose is to verify each batch of network transactions, called blocks.

For the initiative at ICD Tughlakabad Import Commissionerate, the finance ministry has partnered with the Asian Development Bank.

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Klever Cs | India
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