Small steps of digitalization of trade and transport processes are shaping the foundations for seamless, cost-effective and collaborative cross-border connectivity in the subregion, promising big leaps in trade integration, efficiency and competitiveness.

In Eastern South Asia (ESA) - comprising of Bangladesh, Bhutan, India and Nepal – the cost of cross-border trade remains among the highest in the world. Long queues, poor infrastructure, excessive paperwork and inconsistent customs procedures increase costs and delays at borders, hurting especially small-scale perishable exporters. Digitalization of trade and transport processes through electronic data exchange, digital customs and cargo tracking can reduce delays, lower costs and boost efficiency and competitiveness.

An exporter in Nepal, for example, may spend days waiting for clearance of goods bound for markets in India or Bangladesh despite fulfilling all formalities, often due to repetitive inspections and lack of digital coordination between border control agencies. Digital solutions can break these bottlenecks by replacing manual checks with interoperable systems and enabling coordinated border management.

Current state of play

Progress is being made at the national level. India has rolled out “Turant Customs” to promote contactless, paperless and faceless clearance systems. Nepal has introduced paperless customs declarations through its National Single Window (NSW). Bhutan’s new Electronic Customs Management System now allows most traders to file documents digitally, while Bangladesh is working towards a comprehensive NSW integrating multiple agencies. These initiatives are building blocks for a broader digital ecosystem. 

However, Cross-border digital integration remains limited due to differing platforms, data security concerns, and absent legal frameworks. As a result, traders still rely on hard copies, reducing efficiency gains from national digital systems. Addressing this challenge requires gradual, trust-building steps to enable secure, interoperable data exchange between neighbouring countries.

One such step could be piloting exchanges of low-risk trade data between customs authorities. For example, trial projects on sharing electronic Certificates of Origin or Customs Transit Declarations could showcase the feasibility of cross-border data exchange without risking revenue leakage. Such pilots would also help countries test compatibility, build technical know-how and develop frameworks for secure digital exchange.

Building policymakers’ confidence in ESA is vital. Digital data exchange replaces hard copies, reducing duplication. Invoices and lorry receipts share HS codes, descriptions and prices digitally. Data security concerns are unfounded, as secure protocols enable data exchange without centralizing all information on a single platform or cloud.

Another area for incremental progress lies in interoperability. Countries are developing their own customs platforms, but unless these systems can “talk” to each other, trade will remain slow and costly. Developing common data standards, promoting API-based real-time messaging between systems and aligning with international frameworks such as the World Customs Organization’s Revised Kyoto Convention or the WTO’s Trade Facilitation Agreement can help harmonize procedures and enable seamless exchange of information.

Capacity building is essential for digitalizing cross-border trade. Border officials need skills in data management and risk assessment, while small traders require digital readiness. Subregional training and knowledge sharing support this. The private sector’s involvement ensures digital reforms address real challenges, especially in time-sensitive sectors like tea, spices and textiles.

Progress towards digitalization

Regional examples show digitalization’s benefits. India’s Land Port Management System streamlines truck booking, document uploads and customs clearance, reducing congestion. Bangladesh’s Terminal Operating System enhances vessel scheduling and yard management. Bhutan’s Risk Management System allows electronic cargo assessment, minimizing physical checks. These national successes offer models for broader subregional integration.

To accelerate this process, countries need to collaborate more closely on legal and institutional reforms. Harmonizing customs rules, product standards and digital certification processes is vital for seamless trade. Mutual recognition of testing certificates and digital signatures would eliminate redundant checks and reduce compliance burdens. Developing regional trust frameworks for secure data exchange could serve as the backbone of a digital trade ecosystem in ESA.

ESCAP has been supporting ESA countries through a series of capacity building workshops [Shillong, India (2023), Paro, Bhutan (2024), Kakarbhitta, Nepal (2025)] bringing together customs officials, trade ministries, private sector representatives, local stakeholders including women entrepreneurs and development partners to discuss practical solutions. At the most recent workshop, held at Kakarbhitta, Nepal, participants called for pilot exchanges of low-risk data to be initiated, addressing data security concerns, as a trust building measure.

Digitalization is not merely a technical upgrade; it is a strategic investment in regional integration and economic resilience. By embracing incremental progress and nurturing collaboration, the ESA subregion can move steadily towards a future where borders become gateways of opportunity rather than barriers to trade. The building blocks are already in place. What is needed now is the sustained will to piece them together into a full-fledged digital ecosystem for trade and transport connectivity in the subregion.