India plans to use blockchain in tracking cotton from farms to consumers

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Piyush Goyal, Union Minister of Textiles, Commerce and Industry, has urged stakeholders in the cotton industry to explore the use of blockchain technology to ensure that consumers get the highest quality.

“Blockchain technology for enhancing the traceability of cotton from Farm to Foreign is under consideration and it will be tried on a small scale initially and later expanded,” Goyal said during the Federation of Telangana Chambers of Commerce and Industry (FTCCI) conference.

The use of blockchain or DLT in tracking items from manufacture to shelves has picked up steam in recent years because of the inherent nature of the technology. Immutability and transparency make it possible for users to see the history of a product through every step of the production process.

Several projects have been launched to use DLT in the supply chain process with the help of RFID or QR codes. Non-modifiable goods like cotton might have a hard time being documented on distributed ledgers, but using advanced smart contracts could turn the tide for such goods.

In 2020, the United Nations Economic Commission for Europe (UNECE) carried out a pilot in collaboration with Hugo Boss, Burberry, and other firms to use DLT to improve the traceability of cotton in the garment industry. The 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 available free of charge to all industry actors.”

Goyal urged participants of the FTCCI conference to earmark a minimum of 5% of their budget towards the One District One Product (ODOP) scheme. India is part of the largest producers of cotton in the world and is responsible for an impressive 22% of global production rates.

India’s increasing reliance on blockchain

India’s Maharashtra government turned to DLT to combat certificate forgery and improve land registry processes. Telangana, an Indian state to the south, is setting the pace for DLT adoption in the region, creating a regulatory sandbox to allow private participants to build innovative solutions using the technology.

“This sandbox will help create a meaningful dialogue among all the stakeholders, including regulators, startups, and policymakers to arrive at a nuanced approach to evolving effective Web 3.0 framework,” said Jayesh Ranjan, Principal Secretary Telangana IT & Industries.

India’s state of Kerala had previously announced that it would use DLT to track the distribution of perishable items like milk, vegetable, and fish through its Development and Innovation Strategic Council. On a national scale, the country’s Finance Minister Nirmala Sitharaman has stated that she is eyeing a 46% adoption of DLT within a few years.

Watch: The BSV Global Blockchain Convention presentation, Food Supply Chain & Blockchain