The Indian government’s draft electronic trade documents bill has been praised as a “comprehensive” approach to digitising trade finance.
India’s commerce and industry ministry published the draft legislation on February 9, saying that “the existing legal framework does not fully recognise electronic trade documents or provide a comprehensive basis for cross-border digital trust services”.
The draft law says electronic trade documents should be given equal legal footing to the traditional paper versions, provided a “reliable method” is used to identify and secure the documents.
The proposal “is a very welcome step” by the government “to further strengthen the position of India as a global trade and commerce hub, adopting progressive policies to enhance the efficiency, safety and transparency of trade into and from the country”, said Standard Chartered’s head of trade and working capital for South Asia, Tarandeep Singh Lamba.
Similarly to other jurisdictions that have passed electronic trade document laws, the proposed bill hews closely to the UN Commission on International Trade Law’s Model Law on Electronic Transferable (MLETR).
The list of documents the law applies to was not released but typically includes instruments such as bills of lading and bills of exchange.
India’s interpretation is broader than legislation in other countries that have aligned with MLETR by also proposing a framework for identity and trust services that allow people and companies to verify their identities digitally.
The “proposed legislation goes beyond incremental reform by establishing a comprehensive legal architecture for digital trade”, said Tianmi Stilphen, who leads legal reform efforts at the International Chamber of Commerce’s (ICC) Digital Standards Initiative.
“From a global legal perspective, what stands out is the integration of both electronic transferable records and digital identity/trust services within a single framework,” she said. “This reflects a comprehensive approach to digital trade reform and signals clear intent to operationalise paperless trade at scale.”
Only a handful of countries have passed or are in the process of passing MLETR-compliant legislation, according to a tracker maintained by the ICC.
Among those, France went further than the model law by issuing a decree last year on how issuers of digital documents can assess whether a platform or system meets the definition of “reliable”. But some experts warned that the approach might make it difficult for French parties to align with international approaches.
India’s draft law stipulates that a digital document “shall not be denied legal effect” just because it was issued or used outside India, and also affords recognition to identity management methods that have been recognised by countries with an equivalent level of reliability assurance.
The government is seeking feedback on the bill until March 11.
