How NERL is transforming India’s commodity market and ensuring smooth continuity with OCI

In 2017, NERL was set up for creation and management of electronic Negotiable Warehouse Receipts (e-NWRs). This was the onset of orderly growth in the sector. ENWRs are held in repository accounts that make it easy to do transfer of ownership and also reduce other risks and hassles. In an interaction with CXOToday, Siddhartha Sinha, Head of IT, National E-Repository Limited explains how NERL is transforming India’s commodity market and is ensuring smooth continuity with OCI.

• Current state of adoption of NERL services in the commodity market and customer feedback

Commodity and Agriculture space in India is extremely vibrant and rapidly innovating with time. With the help of emerging technologies, far reaching digitalization and constant government focus, this market is shaping itself for better and seamless experiences to consumers and market players. Agricultural commodities goes through pre-harvest and post-harvest cycle where these stages are equally important for the real growth. NERL plays an important role in post-harvest stage and focuses on digitalising the management of commodities stored in the warehouses.

Prior to the NERL, warehouses were having option to issue paper-based warehouse receipts to their customers for the commodities stored in the warehouse. This cause substantial problems like bad delivery, mutilation, duplication while also impacting overall utilization and ease of doing business. To resolve this challenge, the Electronic Negotiable Warehouse Receipts (ENWR) were introduced. These ENWRs enables stakeholders to handle these receipts digitally in much faster, secured and transparent ways.

NERL, one of the Repository in India, regulated by Warehousing Development and Regulatory Authority (WDRA), established in 2017 has created a state-of-the-art technology that handles commodities held and settled in dematerialized form in the Indian commodity market. Using innovative and flexible technology systems, NERL supports clients, warehouses, banks/FI, exchanges and various other markets in the commodity/agricultural ecosystem. In the Repository eco-system, Electronic Negotiable Warehouse Receipts (ENWR) are held in repository accounts, which is similar to holding funds in bank accounts. Transfer of ownership of ENWR is done through settlement instruction or simple transfer. These ENWR are financed from banks and Financial Institution through repository platform.

By using innovative and flexible technology systems, NERL is able to support and provide significant value to farmers, traders, processors and value chain participants in the commodity markets as end user customer. NERL is also adding value to entire ecosystem by integrating and onboarding banks, commodity exchanges and spot markets by providing pledging and settlement platform.  Our intention is to build this ecosystem to make the business through ENWR effortlessly and bring ease of doing business through technology innovation and implementation.

• Insights into technology adoption considering NERL operates in a heavily regulated market

NERL is a young organisation. It is contributing in creating a new ecosystem of electronic negotiable warehouse receipts (ENWR) in the Indian commodity space by providing a platform to trade in commodities electronically. Looking at the exponential growth in the Indian digital technology and market potential of the commodity market, NERL required a strong IT backbone to be address these challenging scenarios. We strategized and focused on modern technologies which can support this rapid growth and build an ecosystem that the market can rely on.

NERL started their journey on cloud which enabled them to quickly setup their technology backbone without worrying much on establishing their own data-centers. We realised earlier on that we need to focus on our core business and leave technology experts to manage our IT, and that’s how we opted to embrace Cloud Infrastructure. With continuous focus and adoption of technology, NERL is currently created a robust system infrastructure where disaster recovery (DR) has been established with much advanced RTO and RPO on Oracle Cloud Infrastructure.

NERL is also using the power of micro services which are further helping them in integrations with various other systems and ensuring high availability. Security is also a key aspect which NERL is fulfilling by leveraging various security fundamentals at various level from network till the application and its operations.

• What Oracle Cloud solutions are being deployed at NERL

At NERL, we are creating a large ecosystem where system uptime is critical for the business and the market. A highly resilient system is therefore required to meet business goals and uninterrupted services and operations. Hence, NERL used Oracle Cloud Infrastructure (OCI) as a disaster recovery site to ensure high level of redundancy and better business continuity. Currently we have deployed our core systems workload on OCI and may expand further with other services.

• Pre deployment challenges 

In today’s world, Technology is changing and evolving at rapid pace and their adoption across industries is one of the key challenge. The acceleration of technology adoption during pandemic has exponentially increased. In earlier times, hosting of systems were relying mostly on in-premise data-centres and later cloud based services become more popular. Although cloud attracted the industry but its adoption is challenging. For any such adoption or changes, organisation must do right level of evaluation, assessment, planning and preparations to reap the real benefit of such technology seamlessly.

We have started our journey on cloud in 2017 and currently operating on a multi cloud environment. While deciding on Oracle cloud, our major hurdle were lack of skills, unaware of system performance as well as its management. With conscious approach, Oracle proposed to conduct POC on their platform and deployed their team. This POC was for hosting Disaster Recovery on their Oracle OCI and the major challenge was to achieve desired RPO (Recovery Point Objective), means data replication in multi cloud environment. Teams conducted the POC successfully and taken NERL to a concluding level in considerable short duration of time.

• How does Oracle Cloud support compliance mandates

We are in regulated space and regulatory compliance is one of the important aspect for the organisation. By leveraging Oracle OCI, we were able to host our workload on Ministry of Electronics and Information Technology (MeitY) empanelled data-center which was one of the requirement, achieved required RTO (Recovery Time Objective i.e. a defined amount of by which systems should be recovered) and RPO (Recovery Point Objective i.e. a point beyond that data loss should not happen) as per regulatory guidelines. Along with this, we ensured our primary workload and the disaster recovery were at a considerable distance away from each other to avoid the impact of any seismic issues, made us in mitigating location based risk. Our Multi-cloud setup has also helped in reducing service provider based risk to a great extent and enabled us to provide robust infrastructure to our business.

• Other benefits of deploying Oracle Cloud Infrastructure – pls elaborate w.r.t NERL and end-user (customer) benefit

Since we are providing settlement services through STP (Straight Through Processing) to the commodity exchanges as well as other spot markets, system uptime is crucial due to high level of integration and any disruption may impact the customers as well the market significantly. Considering the criticality of the business, we have hosted our systems on oracle OCI as a disaster recovery to provide highly resilient system which can facilitate uninterrupted services to our business and stakeholders.

By choosing Oracle (OCI), we have managed to reduce our cost by more than 30% and at the same time able to provide robust system architecture to the business.

• Role of technology in your business: what are the challenges and what’s nex

Addressed in previous questions

Currently we are exploring disruptive technologies i.e. block chain technology, analytics, AI/ML and usage of IOT devices for warehouse modernisation.

We also understand that one way technology give you the super highway for growth but on other hand you can’t avoid the security risk which is always lurking, so we are continuously working towards securing our system.

• Future plans w.r.t business innovation and new opportunities

We are playing a significant role in building an ecosystem in Indian commodities market which can provide an aggregated platform to the market players in leveraging various integrated services related to commodities. Our focus is to exponentially increase the market participation and penetration in commodity sector which can provide greater visibility, realistic and transparent information which can help in managing commodities procurement and disbursement in a scientific way and so, in rationalization in demand and supply. This will also help in the reaping better prices of the produce to the farmer or the producer.

With this vision, NERL is focusing to provide trust building technology and planning to leverage blockchain and other emerging technologies. Market and commodity data is playing key role in this ecosystem, so data analytics can provide an important insight for making appropriate decision. Since integration is a key driver of this ecosystem to be successful hence we are building services which can be used by various entities to connect with us.

We are working to create model warehouses which can be integrated with IOT enabled devices with our platform and help in bridging the gap between physical and digital commodity management.