Smoother global trade: India to pitch an alternative to Swift at G20 meet

India will table an international banking transaction system similar to Swift at the G20 meet, The Economic Times (ET) has reported. This is expected to support paperless transactions for cross-border trade.

A government official told the newspaper that a system like this can add great value to global trade while also providing insights about the transactions to all stakeholders. The system will be based on an electronic bill of lading (a digital version of the traditional paper documents).

This will allow an easy flow of data and information across systems and applications being used in various countries. The official said that the Swift system facilitates communication for cross-border financial systems, and we need a similar mechanism to smoothen global trade.

The Society of Worldwide Interbank Financial Telecommunications (Swift) allows global financial institutions to communicate with each other using a messaging network that is quick, accurate, and secure. It is used to conduct cross-border financial transactions.

The whole endeavour is a push towards paperless cross-border transactions, which will be a big step in supporting global trade. It would ensure that shipping companies, the insurance sector, and banking entities have a single common interface. The government official quoted by ET said that the effort is to develop a template that is easy to adopt for any country.

When operational, the system is expected to significantly reduce transactional costs, which can act as a multiplier for global trade.