India plans to use blockchain to track cotton from farms to consumers
Piyush Goyal, Union Minister for Textiles, Commerce and Industry, has urged stakeholders in the cotton industry to explore the use of blockchain technology to ensure consumers get the highest quality.
“Blockchain technology to improve traceability of cotton from farm to overseas is under consideration and it will be tried on a small scale first and later scaled up,” Goyal said during the Federation of Telangana Chambers of Commerce and Industry (FTCCI) conference.
The use of blockchain or DLT to track goods from production to shelves has picked up steam in recent years due to the inherent nature of the technology. Immutability and transparency enable users to see the history of a product through every step of the manufacturing process.
Several projects have been initiated to use DLT in the supply chain process using RFID or QR codes. Non-modifiable commodities such as cotton may have difficulty being documented on distributed ledgers, but the use of advanced smart contracts can turn the tide for such commodities.
In 2020, the United Nations Economic Commission for Europe (UNECE) conducted a pilot in collaboration with Hugo Boss, Burberry and other firms to use DLT to improve the traceability of cotton in the clothing industry. UNECE noted that the purpose of the pilot “was not to create a software or a commercial solution, but to provide an open source solution freely available to all industry players.”
Goyal urged the participants of the FTCCI conference to earmark a minimum of 5% of the budget for the One District One Product (ODOP) scheme. India is one of the largest producers of cotton in the world, accounting for an impressive 22% of global production.
India’s growing reliance on blockchain
India’s Maharashtra government turned to DLT to combat certificate forgery and improve land registry processes. Telangana, a southern Indian state, is setting the pace for DLT adoption in the region, creating a regulatory sandbox that allows private participants to build innovative solutions using the technology.
“This sandbox will help create a meaningful dialogue between all stakeholders, including regulators, startups and policy makers to arrive at a nuanced approach to developing effective Web 3.0 frameworks,” said Jayesh Ranjan, Principal, Telangana IT & Industries.
The Indian state of Kerala had previously announced that it would use DLT to track the distribution of perishable goods such as milk, vegetables and fish through its Strategic Council for Development and Innovation. On a national scale, the country’s Finance Minister Nirmala Sitharaman has stated that she is looking at a 46% adoption of DLT within a few years.
See: The presentation of the BSV Global Blockchain Convention, Food Supply Chain & Blockchain
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