The block-chain-enabled end-to-end paperless trade transaction, executed over the Contour platform was made possible by a unique collaboration pivoted by Tata Steel across the spectrum over the Contour and essDOCS platforms
A block-chain-enabled end-to-end paperless trade transaction, a global first for the steel industry, has been successfully executed by Tata Steel and HSBC involving the export of steel by Tata Steel, India to Universal Tube & Plastic Industries, UAE.
The block-chain-enabled end-to-end paperless trade transaction, executed over the Contour platform was made possible by a unique collaboration pivoted by Tata Steel across the spectrum over the Contour and essDOCS platforms. As HSBC India is the advising and negotiating bank for Tata Steel, India (exporter), HSBC UAE had issued the Letter of Credit (LC) for Universal Tube & Plastic Industries, UAE (importer).
As an alternative to conventional exchanges for paper-based documentation, the block-chain-enabled end-to-end paperless trade transaction validates the commercial and operational viability of block-chain. To explore similar opportunities in other geographies in the future, Tata Steel has also signalled its intent.
Peeyush Gupta, VP (Steel Marketing & Sales) at Tata Steel, said, “We continuously leverage our in-house potential and that of the external ecosystems through carefully curated partnerships to drive innovation. Adoption of this platform is in line with our objective of agility and enabling a faceless yet trustworthy all-time interface to better customer experience. This unique initiative, executed in collaboration with HSBC, demonstrates our continued efforts to lead technology led disruptions by challenging the status quo and reimagining the global trade set-up”.
Commenting on the block-chain-enabled end-to-end paperless trade transaction, Hitendra Dave, Head-Global Banking & Markets at HSBC India, said, “Having pioneered the deployment of Blockchain technology in trade finance, we are focused on enhancing its utilisation across a wider spectrum of trade finance transactions. We’re delighted to partner with Tata Steel in this landmark transaction for the steel industry. This transaction is a significant step towards the mass commercialisation and adoption of this technology and we look forward to its transformative impact on trade finance”.
Including the e-presentation of trade documents, contour, which has been built on block-chain technology, has enabled comprehensive digitisation of the end-to-end Letter of Credit transaction. Contour enables the underlying LC block-chain-enabled end-to-end paperless trade transaction to be fully digitised from the LC issuance to the presentation of documents. It also enables the parties of block-chain-enabled end-to-end paperless trade transaction to transfer, manage and present electronic Bills of Lading (eB/Ls) and supporting documents within its platform via the interface with essDOCS’ CargoDocs platform.
With trade documents digitised, corporates can reduce the costs associated with handling paper-based documents, its reconciliation and streamline their processing flow. To aid unlocking of working capital for businesses, it helps to significantly reduce the document negotiation and banking transaction cycle times from weeks to a few days. Particularly in situations where shipping routes are relatively short, it also helps to increase the velocity of trade.
Increased economic collaboration between UAE and India is expected to further drive up their bilateral trade, as UAE is India’s third largest trade partner. The administrative paperwork can delay their delivery of goods physically transferred between the two countries. With block-chain-enabled end-to-end paperless trade transaction, the reduced transaction times will help boost the efficiency of trade in the India-UAE corridor that is characterised by many close-proximity shipping routes.
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