What is Blockhain’s potential for Indian economy

By Saurabh Ambwani

Blockchain has been around for a while now and has cemented its place on the list of technologies that have the potential to transform the world around us. Much of the attention it has received has come from the volatility of cryptocurrencies, disruptions caused by decentralized finance (DeFi) or the speculative nature of digital assets in the form of NFTs. That said, there is much more that technology can deliver, especially for countries like India.

For the world’s largest democracy, and by some estimates the world’s most populous country, digital transformation across public services can bring accessibility, inclusion and convenience to the daily lives of the masses. Blockchain can further add a layer of transparency and can be a very effective way to counter corruption, fraud and red tape. For example, consider the transformational benefits of moving land records on a decentralized ledger. It is estimated that nearly 25% of all cases in the country’s Supreme Court relate to land disputes, clogging up an already overburdened and frustratingly slow legal system.

According to the Center for Policy Research, a non-profit, independent institution, the average pendency of a land acquisition dispute case is 20 years from creation to resolution. Given that a Blockchain-based land registration system would not magically eliminate all disputes, it could provide verifiability and trust in the system and effectively discourage bad actors. Although some states have made progress in digitizing land records on Blockchain, we are far from a large-scale nationwide implementation.

Blockchain technology can also bring significant improvements to the financial sector, especially for the large unbanked population or people who do not have access to traditional banking services. Blockchain technology can create a more inclusive financial system by providing affordable banking services to these individuals. For example, blockchain-based microfinance platforms can enable small business owners to access credit and other financial services without the need for a traditional bank account.

Blockchain has long been explored by financial institutions in both the public and private sectors. Banks collaborate by forming consortia and participating in Blockchain networks with the common goal of improving efficiency and enhancing the customer experience. An example of this is a recent example of the Indian arm of a major MNC bank that just tested a letter of credit transaction on the Blockchain, which reportedly cut processing times by 90%.

Another area where blockchain technology has a significant impact is supply chain management. It can be an effective way to create transparency and accountability across the value chain and help address issues of supply chain theft, counterfeiting, contamination and non-compliance with local laws, to name a few. Together with other technologies such as NFC (Near Field Communication) and the Internet of Things, Blockchain technology can provide consumers with assurance of ethically and sustainably sourced raw materials, which is becoming more important as our focus shifts towards environmental well-being.

A suitable application is the traceability of goods with Geographical Indication (GI) tags. A GI mark is applied to products that come from a specific geographical location and have the characteristics or reputation derived from that origin. Blockchain technology can be the right platform to provide the provenance of certain goods coming from India, which can help strengthen demand and inspire confidence in buyers on a global stage. It’s great to see progress being made by some states, but the opportunity is ripe for much wider adoption.

In conclusion, the use of blockchain technology will certainly play a crucial role in India’s quest to become more digitally advanced. However, success will depend on various factors, including regulatory frameworks, infrastructure and digital competence. It is important for businesses and policy makers to work together to create an enabling environment that can maximize the potential of blockchain technology in India.

The author is practice leader – Metaverse and Blockchain, LTIMindtree

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