India’s 2026 Digital Trade Facilitation bill: The legal legwork behind electronic trade documents

It is generally agreed that adoption of electronic trade documents will lead to efficiency – both in terms of time and costs. 

Let’s consider the example of a bill of lading (BL). A BL is a transport document which is issued by a carrier to a shipper, serving as a document of title over the goods being carried. The shipper will usually also be the seller of these goods. The seller will generally only release the BL to the buyer on payment, and the buyer can only collect the goods from the carrier by producing the BL.

Electronic BLs (eBLs) facilitate faster, more secure transactions at lower costs, leading to the avoidance of disputes. 

Most commercial transactions require financing. The seller will send the BL to their export bank, which in turn will send it to the buyer’s (import) bank, before being finally passed to the buyer. When digitised, this process can be done in a matter of hours, as opposed to days when done with paper documents. 

With measures such as digital authentication technologies, centralised ledgers, and blockchain, eBLs also improve security against forgeries and misuse. 

Substantial costs are incurred to process paper documents and verify their authenticity. This means considerable time and costs are involved, not only in the actual transportation of the goods, but also in the administrative holding and processing of documents. 

Goods often arrive at their port of destination before their documents have been processed. In these circumstances, it is usual to deliver the goods against a letter of indemnity (LOI) and without the production of a BL. 

This practice often leads to misdelivery claims. For instance, a bank may claim that it is the lawful holder of the BL, and therefore was the party to whom the goods should have been delivered; that the delivery of the goods against the LOI was a ‘misdelivery’. The use of electronic bills with faster transmission and a secure transfer will go a long way in avoiding such disputes.

This exemplifies the legal issues which may arise when dealing with electronic trade documents. 

Harmonising the Asian legal framework 

India’s Directorate General of Foreign Trade has initiated a public consultative process on the draft of ‘The Digital Trade Facilitation Bill, 2026’ (henceforth the Bill). 

This follows the enactment of the 2023 Electronic Trade Documents Act (ETDA) in the UK, as well as other global efforts to harmonise the legal framework. 

The Hong Kong government published a consultation paper in December 2025, aiming to gather industry opinions on the proposed legislative amendments to facilitate the digitisation of trade documents in Hong Kong.

Singapore, on the other hand, enacted most of the United Nations Commission on International Trade Law’s (UNCITRAL) Model Law on Electronic Transferable Records (MLETR) provisions in 2021 – although with modifications. 

Amid this divergence, there are three potential issues the Government of India (GOI) may wish to address in the Bill. 

Issue 1: Interoperability 

A practical problem in introducing and using electronic trade documents is the issue of interoperability. Interoperability, in the context of electronic trade documents, means the ability of different digital trade systems, platforms, and technologies to exchange and legally recognise electronic trade documents across national and technological boundaries, without requiring every party to use the same system.  

Interoperability is not just technical; it must also allow legal recognition across jurisdictions. The GOI may wish to include a list of recognised frameworks, requiring platforms to support the import or export of documents using such frameworks. It may also wish to require platform providers to comply with open interoperability standards as a condition for licensing or recognition.

Without interoperability, users could become locked into systems that no longer work for them. Interoperability requires uniform standards, not just in a technical sense, but also in a legal sense. This is to ensure that the obligations and liabilities undertaken by the parties (particularly the issuer of the document) are not affected by the movement of the document between platforms.  

Issue 2: Reliability 

There has always been a reliability requirement in Indian legislation and common law, which formed part of the law of evidence. Namely, computer evidence is required to be reliable before it can be admitted in court.      

This requirement comes into effect ‘ex-post’, that is, after the system has already been deployed and a dispute has already arisen. 

With the Bill, a question arises as to whether it is intended to introduce a non-evidentiary ‘ex-ante’ reliability requirement, that is, one that must be fulfilled before a system could be used for the purposes set out in the Bill. 

Section 6 of the Bill requires information equivalence, reliable methods, and an audit trail. However, baseline reliability standards are left entirely to the Rules. The GOI may consider introducing a minimum set of non-negotiable reliability criteria in the Bill. 

The consensus among all commercial parties seems to be that without reliability standards comparable to paper processes, adoption would be risky. Thus, there is a need for reliability tests. Even under the proposed Rules, it is likely that a technology-neutral approach would be adopted (as has been done under both ETA and ETDA in Singapore and the UK, respectively). This approach will encourage innovation and allow for commercial arrangements to be agreed. 

Section 11 of the Bill provides for court-determined reliability, but lacks explicit benchmarks. Determination by court may take time and, in the interim, lead to ambiguity. The GOI may consider permitting pre-certification of reliable methods by a designated authority and/or an accreditation body. 

ETA provides that if an electronic transferable record is issued, transferred, controlled, presented, and stored by an accredited electronic transferable records management system – provided by a provider that is registered, licensed, accredited or recognised – the methods used by that system are considered ‘reliable’. However, Singapore has yet to introduce such an accreditation system. ETDA altogether refrains from a government-led mechanism, which may prove an uphill battle for the GOI.

Issue 3: Possession and control 

The Bill deals with the issue of ‘possession’ by way of an explanation under Section 8: 

“For the purposes of this Bill or any other law for the time being in force, the establishment of control over an electronic trade document by a reliable method shall be deemed to confer possession of the document and shall carry the same legal consequences as possession of a paper trade document.”

Generally, the right to claim performance of an obligation recorded in the document relates to the person in possession of the document. The right can be transferred by the (physical) transfer of possession of the document. 

One of the questions extensively discussed by the UK Law Commission in the lead up to the ETDA was the ‘possession problem’ – the law of England & Wales (and many common law jurisdictions) does not recognise intangible things as being amenable to possession. 

To overcome this problem, Section 3(1) of the ETDA provides that a person may possess, indorse, and part with possession of an electronic trade document. This section is intended to remove the legal hurdle that has historically prevented electronic trade documents from being possessed. 

What constitutes possession will be assessed as a matter of common law and facts. Generally, the dual concept of factual control and intention would be relevant. 

Section 8 of the Bill equates digital ‘control’ with possession, but lacks explicit criteria. The definition of ‘control’ under Section 2 (b) is generic. Adding statutory minimums, such as singularity, tamper-evidence, distinguishability from copies, and demonstrable control, would reduce disputes and strengthen legal certainty. 

The draft defines ‘control’, but it still needs clarity on the operational test, particularly how systems prove exclusive control, divestment, and endorsement equivalents. The overall practical aim is that electronic trade documents must be on a system that ensures that no more than one person (or group of persons, acting together) has control of the electronic document at any given time. 

To tie it to the ‘possession’ issue, identifying who has possession of something at any one time will depend on the type of control they have, in respect of the document and their intentions in relation to it. 

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International trade involves the movement of goods across multiple jurisdictions. This also means that in each transaction, there may be various involved parties, spread across multiple jurisdictions. 

In this context, the adoption of electronic trade documents has many benefits. However, there is also the real risk of a ‘domino effect’. A single party resisting such change has the potential to derail the entire process. 

Global harmonisation of the legal framework dealing with electronic trade documents may lead to more certainty and less resistance. The ETA, ETDA, the Bill, and other standardisation efforts will go a long way in facilitating global trade.