The live trade finance transaction involved the export of steel by Tata Steel, India to Universal Tube & Plastic Industries, UAE, the steel producer informed via release today.
The 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.
The Letter of Credit (LC) was issued by HSBC UAE for Universal Tube & Plastic Industries, UAE (importer) with HSBC India as the advising and negotiating bank for Tata Steel, India (exporter).
This transaction validates the commercial and operational viability of blockchain as an alternative to conventional exchanges for paper-based documentation.
Tata Steel has also signaled its intent to explore similar opportunities in other geographies in future.
“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,” Peeyush Gupta, vice president (steel marketing & sales), Tata Steel was quoted as saying.
With trade documents digitised, corporates can reduce the costs associated with handling paper-based documents, its reconciliation and streamline their processing flow. The use of blockchain technology in trade finance enables comprehensive visibility for all involved parties and enhanced security. Importantly, it helps to significantly reduce the document negotiation and banking transaction cycle times from week(s) to a few days, thereby aiding unlocking of working capital for businesses. It also helps to increase the velocity of trade, particularly in situations where shipping routes are relatively short.