Electronic Negotiable Warehouse Receipt (eNWR) [UPSC Notes]

Electronic Negotiable Warehouse Receipts (eNWR) can make farmers financially empowered and hence helps reduce farmer distress. In this article, you can read all about Electronic Negotiable Warehouse Receipts (eNWR), their potential benefits and how they can help Indian agriculture. This topic is relevant for the Indian economy and agriculture segments of the UPSC syllabus.

Electronic Negotiable Warehouse Receipt (eNWR)

• eNWR is a digital warehousing receipt issued by registered warehouses regulated and governed by a statutory body — the Warehousing Development and Regulatory Authority (WDRA) of India.
• eNWR can be used as a three-in-one instrument (finance, trading, and settlement).
• eNWR is recorded and managed through regulated repositories, allowing finance and trading to take place without the need to physically exchange goods.
• The introduction of the ‘Spot Market of eNWRs’ can bring all three markets (primary, secondary, and tertiary) together where farmers and agri-participants can participate easily through WDRA-registered warehouses.
• eNWR ensures that trading on the Exchange as well as the Spot Market is as transparent as possible.

Benefits of eNWR

• Trust, Transparency, and Security: The eNWR is an ecosystem that is regulated by the WDRA and hence provides trust, transparency, and security. It ensures the traceability of the eNWR at each stage by disseminating data in real-time.
• Centralised Online Real-time Recordkeeping: The eNWR provides centralized online real-time record-keeping, ensuring transparency, traceability, and security.
• Easy Transfer and Splitting of eNWR: The transfer and splitting of eNWR are made easy, leading to a decrease in paperwork and eliminating the requirement to physically transport goods.
• Standardised Warehouses: To ensure the safety of commodities, the WDRA regulates that warehouses issuing eNWRs meet safety parameters and are standardized.
• Easy Finance Options: With no additional cost for collateral monitoring or surveillance, banks provide easy finance options at comparatively lower interest rates, instilling confidence.
• Better Price Realisation: The representation of commodities through eNWR allows for their sale on registered online electronic platforms, resulting in improved price realisation and generating possibilities for arbitrage and hedging.
• Efficient Price Discovery: The use of eNWR enables the co-movement of spot-futures prices to be fair and ultimately converge, resulting in efficient price discovery.
• Scientific Storage and Maintenance of Quality and Quantity: By implementing new technologies, scientific storage and preservation of quantity and quality can be attained.
• Strong Negotiable and Security Instrument: With its comprehensive features, eNWR has the potential to become a robust negotiable and secure instrument, formalizing trade and finance in agriculture.

Conclusion: The Indian government’s vision of digitizing the agricultural supply chain has led to the introduction of the Electronic Negotiable Warehouse Receipt (eNWR). This technology can provide farmers with easy access to finance, efficient price discovery, and transparent trading, making agriculture a more profitable and secure sector. By embracing eNWR, the Indian government can empower farmers and create a more sustainable and prosperous agricultural economy.

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