Need for Industry Verticalization for Global Trade: From HSN, Compliance to Clearance, Logistics

The global economy is unstable, interconnected, and influenced by rapid technological advancements and a changing geopolitical landscape. Digitalization has become a business necessity across sectors in this hyper-competitive landscape. Successful and forward-looking businesses are already using digital technologies to streamline operations, enhance productivity, and enable real-time decision making. The export-import (EXIM) sector is not exempt from this development. In fact, given its transactional nature, international dependencies, and time-sensitive operations, the industry has turned out to be an irresistible case study of how digital solutions can effect change.

Digitalization has been a long-proven prerequisite for steady operational efficiency and exponential growth in production. With the industry progressing towards its digital journey, the need for verticalization has become vital. It allows organizations to see and implement a roadmap specific to their requirements, speeding and measuring ROI. This is achieved through industry-specific procedures, compliance and clearance issues, integration needs, and reporting.

Digital revolution in EXIM

The increasing volumes of international trade demand digital infrastructure for documentation, compliance, tracking, forecasting, and inventory management. The manual paper-heavy import and export practices are being taken over by efficient digital platforms that ensure speed, transparency, and cost-effectiveness. Today, India's customs systems are fully functional digitally. Whether it is clearance documents submission or applications for the benefits of exports, businesses have to engage with online systems only.

Also read: 'Making Trade Credit Insurance a Guarantee Can Unlock India’s Trade Finance'

International trade policies such as the WTO's Trade Facilitation Agreement have further driven this pace by advocating for reduced paper usage, digital visibility, and mechanization, potentially generating more than $1 trillion in global trade benefits each year.

An illustration is the development of the Bill of Lading, an essential shipping document attesting to ownership and carriage of cargo. Historically paper-centric and sometimes delayed, it's now shifting towards eBLs or e-bills of lading. This transition alone can avert cargo delays, lower transaction costs, and facilitate quicker release of goods.

Evolution of trade dynamics: The Trump tariffs era

The winds of international trade are also shifting. The revival of tariff policies by the Trump administration in 2025 was a major game-changer. With a general 10% tariff for all U.S. imports and tariffs on specific countries, the global trade architecture is experiencing seismic realignments.  Such policies have been particularly unsettling for industry segments such as steel, crude oil, and pharmaceuticals.

The steel sector has experienced skyrocketing input costs, affecting downstream sectors such as auto and construction. In the oil sector, increased costs of imported steel and drilling gear are slowing major offshore projects and tightening margins for contractors. The pharma sector, heavily dependent on Chinese active pharmaceutical ingredients (APIs), faces the risk of price increases and life-threatening drug shortages.

The big three: Why steel, pharma, and crude oil require vertical solutions

Among the extensive network of traded products, crude oil, steel, and pharmaceuticals are globally essential and tightly regulated industries. Though their horizon is gigantic in these industries, their documentation is intricate and compliance frameworks are highly complex.

Steel, for example, is part of construction, infrastructure, automotive, electrical machinery, real estate, defense, and even medical device industries. From nails and cranes to screws and surgical tables, steel remains at the core. And yet, this one commodity has thousands of product variations, each with its own HS codes, trade restrictions, and import-export connotations.

With future regulatory requirements such as the European Union's Carbon Border Adjustment Mechanism (applicable from January 2026), Indian steel exporters will have to compute and report their carbon footprint per metric ton and buy carbon credits to settle their tax dues. This advances a new need for platforms handling documents and assisting in calculating environmental footprint, monitoring emissions, and enabling access to respectable carbon credit markets.

Pharma, in contrast, operates under a different universe of complexities such as global health laws, FDA clearances, batch traceability, and cold chain logistics. And for crude oil, geopolitical volatility in decision-making, price sensitivity, and the management of strategic reserves characterizes its operational universe. The imperative of verticalized EXIM solutions designed specifically for the nuances of each industry is fast becoming indisputable.

Why verticalization matters

Verticalization is the process of tailoring software or online platforms for individual industries, as opposed to creating one-size-fits-all tools. Verticalization is required to meet the following in-depth operational requirements:

Taxation: Industry-level tax regulations, such as carbon taxes in steel or VAT frameworks in pharma, demand customized systems for calculation, reporting, and reconciliation.

Transportation: Logistics requirements differ widely; steel requires heavy cargo infrastructure, pharma demands temperature-controlled supply chains, and crude oil involves complex tanker scheduling and hazardous material protocols.

Also read: Beyond Tariffs: How India’s SMBs Can Win Big in a Rebalancing Global Trade Order

Documentation and compliance: Approvals, licenses, and trade restrictions vary significantly across sectors. For example, a medical shipment may require WHO-GMP compliance and an oil shipment requires MARPOL documentation.

Carbon emissions and ESG disclosure: As sustainability starts to drive global commerce, being able to monitor and disclose emissions, earn carbon credits, and comply with green regulations is fast becoming non-negotiable.

The India tale: Rich in design but implementation-deprived

India has been quite phenomenal at designing digital products. Some of the top SaaS players have already started creating verticalized products, particularly in industries such as logistics, finance, and manufacturing. However, the challenge lies in implementation. These companies are cognizant of regulatory reforms and online trends but are hindered by resource limitations such as insufficient funds, labor shortages, or fear of disruption.

For large enterprises, adopting vertical SaaS platforms will offer compliance and provide strategic advantages. Industry-specific solutions are provided by these platforms that increase business efficiency, minimize costs, and enhance customer satisfaction. For instance, logistics organizations are using SaaS for optimizing routes and managing fleets, yielding considerable cost benefits.

The disorganized nature of India's export-import, wherein paperwork is routinely outsourced to Custom House Agents (CHAs), and expertise gets trapped, further adds to the inertia. Typically, companies turn to long-term solutions only when emergencies such as a customs show-cause notice or a denied shipment occur. This is where top-level consciousness and government-industry cooperation become essential. The government departments and large businesses have to drive adoption of vertical platforms not only through coercion, but also through benefits, hand-holding, and awareness initiatives.

The export-import sector is quickly transitioning from clunky automation to a brand new era of smart, vertical SaaS platforms. While digitalization is providing speed, transparency, and scale, verticalization is bringing relevance, precision, and conformity. For India to lead the global transformation narrative, big business must set and lead the pace for MSMEs since they are the backbone of our economy. Even if global trade is interconnected, industry requirements are specific, and only verticalization can fulfill them.

Sudhakar Kasture is an International Trade Consultant.