On the anvil: Virtual trade corridors to ease digital bottlenecks

India is pushing virtual trade corridors and paperless logistics with key partners as digital trade becomes central to FTA talks with the EU and the US

The government is working to establish seamless logistics networks with trading partners and remove digital bottlenecks through virtual trade corridors (VTCs), Shipping Minister Sarbananda Sonowal has said, as India moves closer to sign trade deals with the US and the European Union (EU). 

“There is a strong focus on digital trade, Customs cooperation, and interoperability of trade platforms,” Sonowal told Business Standard, citing the negotiations for the recently announced India-EU Free Trade Agreement (FTA). 

The virtual trade corridor and virtual trade agreement (VTA) framework is gaining traction, with the first agreement signed with the United Arab Emirates (UAE) in 2024. “In discussions with the EU negotiating team, both sides have already expressed interest in evolving beyond tariff liberalisation to include digital and paperless trade facilitation arrangements, very much in the spirit of the UAE VTA,” Sonowal said. 

A key element of this initiative is the Master Application for International Trade and Regulatory Interface (MAITRI), a middleware platform developed by the state-owned engineering consultancy firm RITES in partnership with the shipping ministry. 

The platform is designed to enable seamless and secure trade data exchange under the VTC framework and has been developed as a software building block for the India Middle East Europe Corridor (IMEC). “The success of the UAE VTA has provided a template for how digital facilitation can reduce friction, enhance compliance, and significantly shorten cargo dwell times,” he further said. 

India’s current deliberations include Customs cooperation frameworks with the EU and the Association of Southeast Asian Nations (Asean) that incorporate pre-arrival risk management, advance rulings and single-window integrations. These integrations aimed at simplified logistics include sectoral data-sharing protocols that support certification, sanitary and phytosanitary (SPS) clearances, and standards harmonisation. 

Last month, Foreign Secretary Vikram Misri said that the VTC has been pilot-tested at a bilateral level with the UAE and could be replicated at a larger scale thereafter. 

Leveraging digital trade facilitation mechanisms such as VTCs and VTAs is a central pillar of India’s evolving trade policy, Sonowal said. “The framework agreement we signed with the UAE in 2024, which includes a VTC enabling paperless trade, pre-clearance, and real-time data exchange, is just the beginning,” he said. 

MAITRI was launched during the visit of Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, to India in September 2024. It integrates existing trade portals, including the National Logistics Portal-Marine, the Indian Customs Electronic Gateway and the Unified Logistics Interface Platform, with corresponding platforms on the UAE side, providing seamless and paperless connectivity. 

According to the commerce ministry, bilateral merchandise trade between India and the EU has shown sustained growth, valued at ₹11.5 trillion in 2024-25, with India exporting roughly ₹6.4 trillion to the EU. The FTA with the EU was announced on January 27. 

The IMEC initiative was launched during the G20 Summit in New Delhi in 2023. It is intended to provide a seamless trade route through India, west Asia and Europe. The corridor will connect Indian ports such as Jawaharlal Nehru Port Authority, Mundra and Kandla in Gujarat with west Asian ports including Fujairah, Jebel Ali and Abu Dhabi in the UAE, as well as the Saudi Arabian ports of Dammam, Ras Al Khair and Ghuwaifat. The western leg of the corridor will then extend connectivity to Europe.