India’s Free Trade Agreement with the European Union is being sold as a diplomatic breakthrough. Some in Europe have called it the “mother of all deals”. India should treat it as something else: a compliance test that can be turned into a growth lever only if domestic systems are fixed first.
That is why the hard work begins in logistics. This is the plumbing of trade. If India wants the India-EU FTA to lift exports and draw deeper into value chains, it must reduce the time and cost of moving goods across borders. The fastest route is dull but decisive: fully digital, paperless trade processes that work across ports, ICDs, land customs stations, and state jurisdictions.
READ | India-EU FTA: Carbon rules, value chains, and export strategy
Cross-border data interoperability
This push is not happening in a vacuum. It sits neatly within the WTO Trade Facilitation Agreement, especially Articles 7 and 10, and aligns with regional efforts such as the UN/ESCAP Agreement on Cross-border Paperless Trade. The intent is clear: predictable, interoperable data flows that reduce discretion and friction at the border.
But the self-congratulation is premature. The claim that India is “fully ready” to lead paperless trade overlooks structural bottlenecks that have not moved fast enough. Legal misalignments persist. Digital platforms remain fragmented. Border infrastructure is uneven. The real question is not whether India should pursue digital trade leadership. It is whether policy ambition is finally matched by institutional readiness to deliver digitally authenticated cross-border commerce that is accepted abroad.
Paperless trade infrastructure gaps
The optimistic story collapses at the state level and at smaller border points. Paperless processes may work on a few major corridors. They are not universal across India’s border crossings.
Many locations still run on unreliable internet connectivity, patchy digital infrastructure, and inconsistent local practices. In such settings, electronic documentation is a fair-weather promise. The moment a consignment moves beyond the port gate, traders revert to paper because the system cannot be trusted end-to-end.
TIR transit system and India’s limited access to European corridors
The same mismatch shows up in transit facilitation. The TIR initiative has a clear logic: faster movement across multimodal corridors with lighter customs burdens. India has made it technically operational with some neighbouring partners. Yet it has not been able to deploy TIR for shipments to its principal export markets in Europe, where the commercial payoff would be larger.
READ | India-EU trade deal: CBAM compliance becomes competitiveness
So India still does not enjoy the “single-seal, single-exit” transit that established corridors offer. That limits TIR’s strategic value and exposes a wider gap: India’s transit facilitation ecosystem is not yet built for scale across key trade partners.
Cross-border paperless trade compliance risks for small traders
There is also a distributional problem that policy often forgets. Strict digital compliance requirements can sideline the very actors who dominate India’s cross-border trade in many regions: informal and small-scale traders.
Along borders with Nepal, Bhutan, Bangladesh, and Myanmar, commerce often runs on low-bandwidth connectivity, limited digital literacy, and minimal formal documentation. If digital submissions become mandatory without a transition ramp, this segment could be excluded altogether. That would be an own goal. A reform meant to improve inclusion would deepen exclusion and damage subregional integration and livelihoods.
Interoperability across Customs, DGFT, GSTN and port systems
The belief that paperless trade will yield quick efficiency gains is also economically naïve. Digital systems pay off over time, but they demand heavy upfront investment: training, redesigned procedures, system integration, cybersecurity, and continuous fixes.
India’s trade architecture is still split across incompatible platforms and workflows. Customs, DGFT, GSTN, port systems, and state agencies do not behave like one system. Interoperability is the difference between digitisation and digital trade. Without harmonised rules on e-signatures, authentication, electronic transferable records, and cross-border recognition of digital documents, India may only create digital paperwork that fails legal tests abroad.
Policy flexibility and strategic autonomy
Finally, timing matters. Premature accession to strict cross-border paperless trade commitments could constrain policy flexibility at a moment when strategic autonomy is not a slogan but a requirement.
READ | India-EU trade is set to grow; its environmental costs may grow faster
Binding obligations on standards and timelines can push India into choices that do not match regulatory capacity, development needs, or security priorities. A move branded as progress towards “Viksit Bharat” could, if rushed, reduce India’s room to innovate and protect domestic interests in a fast-evolving global digital trade regime.
The real test for India-EU FTA
Cross-border paperless trade can power India’s next leap. But only if the tracks are laid before the train is flagged off.
Rushing ahead without strengthening interoperability, legal harmonisation, and small-trader readiness risks derailing the gains the India-EU FTA is expected to deliver. The practical agenda is clear. Build digital capacity across all ports and border points. Align laws and recognition frameworks so documents are valid across jurisdictions. Make inclusion a design feature, not a speech line.
The question is not whether India should board the digital train. It is whether the rails are inclusive, resilient, and strong enough to carry every segment of India’s trade economy into the future.
Sanjib Pohit is a Professor, and Sovini Mondal is a Research Associate at the National Council of Applied Economic Research. Views expressed here are personal.