HSBC and AM/NS India successfully execute a blockchain-enabled, paperless trade transaction
ArcelorMittal Nippon Steel India the latest among global corporates to adopt digital supply chain
Mumbai / Bhubaneswar 4th Oct 2021 : HSBC India and HSBC UAE have successfully executed a blockchain enabled, live trade finance transaction between ArcelorMitttal Nippon Steel India Limited (AM/NS India)and Universal Tube & Plastic Industries Ltd.(UAE).
The success of this transaction reinforces the commercial and operational viability of blockchain as an alternative to conventional exchanges for paper-based documentation. The solution applied in this transaction is a significant upgrade for organisations engaged in international trading of goods, as it allows all parties to use a single unified platform thereby streamlining and simplifying the process.
With AM/NS India as the seller of steel goods to Universal Tube & Plastic Industries, UAE, the end-to-end paperless transaction was executed over the Contour platform. Contour, which has been built on blockchaintechnology,facilitates comprehensive digitisation of the end-to-end ‘Letter of Credit’(LC) transaction, including the e-presentation of trade documents via the interface with essDOCS’ CargoDocs platform.
In this case, the LC was issued by HSBC UAE for the importer, Universal Tube & Plastic Industries, UAE with HSBC India acting as the advising and negotiating bank for the exporter, AM/NS India.
How it works
Contour enables the underlying LC trade transaction to be fully digitised from the LC issuance stage to the final presentation of documents. It also allows transaction parties to transfer, manage and present electronic Bills of Lading (eB/Ls) and supporting documents seamlessly within its platform via the Contour-CargoDocs interface.
Benefits
The use of blockchain technology in trade finance has been instrumental in enhancing transparency and security for all parties. It helps to significantly reduce the document negotiation cycle time from as much as a week to around one day, thereby aiding unlocking of working capital for businesses. Digitisation also reduces costs associated with paper-based documents, reconciliation and streamlining the processing flow. Increasing the velocity of trade, particularly in situations where shipping routes are relatively short is another advantage.
Mr. Dilip Oommen, Chief Executive Officer, ArcelorMitttal Nippon Steel India (AM/NS India), said, “We are committed to providing smarter steel solutions for a better world. As a leading steel player inNew Digital India, the company is continuously exploring avenues to strengthen its capabilities to automate and digitise the processes. Implementing Blockchain is a step in this direction and gives us a competitive advantage. The future of trade, both international and domestic, is increasingly going to be more dependent on innovations, such as blockchain platforms”
