The government has introduced the Track and Trace system, mandating unique identifiers to authenticate product batches
In an era where supply chains are becoming increasingly global and complex, India faces challenges related to product safety, quality, sourcing, and movement, which can hamper its competitiveness as an exporter. Blockchain technology has emerged as a transformative tool in supply chain management, offering a decentralised and tamper-proof ledger that enhances transparency and accountability across various industries.
Enhancing Safety in the Food & Beverage Industry
The Indian food and beverage sector often grapples with issues such as chemical residues, counterfeit products, and substandard items. Modern consumers demand transparency regarding food origin, ingredients, and safety. Blockchain-supported traceability systems provide a verifiable digital trail of products, boosting accountability at each stage and enhancing food safety. Stored records about safe farming and processing practices ensure that food products and beverages meet quality standards. Moreover, standards-based unique identifiers can verify the authenticity and sourcing of food products, effectively curbing counterfeit items and ensuring compliance with global safety standards.
Quality Assurance In Livestock & Dairy Industry
India, being the highest milk producer globally, contributes 25 per cent of the world’s milk production. However, quality issues such as pesticide contamination in livestock feed and milk, and adulteration of dairy products like ghee, have affected consumer trust. Integrating blockchain technology can enable real-time tracking across the supply chain. For instance, in livestock, blockchain systems can monitor feed quality and animal health. In the dairy segment, the technology can track products and their handling processes, preventing adulteration and helping identify sources of contamination. By providing an immutable and transparent ledger of all transactions, blockchain ensures that every step in the dairy supply chain, from farm to consumer, can be recorded and verified.
Ensuring Transparency In Apparel & Cosmetic Industry
India’s textile and garment industry, contributing approximately 2.3 per cent to the nation’s GDP, faces increasing scrutiny over sustainability and ethical sourcing. A report titled “The State of Consumer Spending: Gen Z Shoppers Demand Sustainable Retail” found that 62 per cent of Gen Z consumers prefer sustainable brands, and 73 per cent would pay more for sustainable products. Similarly, the USD 1.35 billion Indian cosmetics market faces concerns about quality, ethical sourcing, and sustainability. Blockchain systems can address these issues by boosting transparency across the supply chain and helping trace the origin of products and raw materials. By enabling consumers to track the origin of products and ingredients, brands can meet safety standards and attract buyers who seek cruelty-free, eco-friendly, and safe cosmetic products.
Proving Authenticity In Pharmaceutical Industry
India’s pharmaceutical sector meets 40 per cent of the US’s generic drug demand and 25 per cent of all medicines in the UK. Being a key exporter, India cannot risk being associated with counterfeits or substandard medicine. The government has introduced the Track and Trace system, mandating unique identifiers to authenticate product batches. The Unique Device Identification (UDI) system aims to create a unique identity for each product in the medical supply chain for enhanced traceability. Integrating UDI and blockchain systems can help build a transparent digital record of a medical device’s movement, handling, and use. Furthermore, by storing UDI data, the technology can help ensure compliance with regulatory standards such as the Drugs and Cosmetics Act and Good Manufacturing Practices (cGMP). Tamper-proof records for clinical trials can improve future outcomes and lower the risk of counterfeit products in transit.
S. Swaminathan, CEO of GS1 India, emphasises the importance of integrating blockchain technology into supply chains to enhance transparency and trust. He states, “GS1 India is actively embracing technology to drive innovation in the supply chain sector. To fulfil this objective, the company has set up a software development lab in Chennai that serves as a centre for creating business solutions.” He further adds, “GS1 India focuses on creating solutions for efficient product master data management and is also exploring the integration of AI technology to streamline operations, provide predictive analytics, and enhance decision-making capacity.”
The integration of blockchain technology into supply chains is not without challenges. A study published in the International Journal of Information Management highlights that the adoption of blockchain in supply chain management is influenced by factors such as effort expectancy, social influence, facilitating conditions, and trust.Addressing these factors is crucial for the successful implementation of blockchain solutions.
Conclusion
Blockchain technology has the potential to revolutionise Indian supply chains by enhancing transparency, ensuring product authenticity, and building consumer trust. Implementing blockchain-based traceability systems across various industries can help overcome common supply chain concerns and improve India’s reputation as an exporter and commercial hub. Companies should explore the benefits of blockchain by conducting pilot projects and, based on the outcomes, move towards full-scale deployment. Grassroots-level efforts backed by government support and industry participants to integrate blockchain-backed traceability systems would be crucial in this journey.