UPI has indeed disrupted the traditional payment ecosystem by offering a user-friendly and cost-effective alternative to credit cards and other traditional payment methods.
Unified Payment Interface (UPI) services have expanded to include two more countries: Sri Lanka and Mauritius. Prime Minister Narendra Modi made this announcement during a virtual ceremony earlier this week, emphasising the importance of leveraging modern digital platforms to strengthen historical ties between nations. This development signifies a significant step towards enhancing financial connectivity and facilitating seamless transactions between New Delhi and these countries. It also reflects India's commitment to promoting digital innovation and fostering closer economic relations with its neighbors in the region.
Instant fund transfers via smartphones
UPI, developed by the National Payments Corporation of India (NPCI), is an instant payment system that allows users to transfer funds between bank accounts using their smartphones. It enables seamless transactions across different banks and provides a secure and convenient way to make payments. UPI features include peer-to-peer transfers, bill payments, merchant transactions, and more, contributing to the modernisation of the Indian payment ecosystem and facilitating financial transactions for millions of users.
UPI has indeed disrupted the traditional payment ecosystem by offering a user-friendly and cost-effective alternative to credit cards and other traditional payment methods. Its seamless integration with smartphones and bank accounts has made it accessible to a wide range of users, including those who were previously underserved by traditional banking systems.
Also Read |ÂVery proud of our diaspora, says PM Modi ahead of âAhlan Modiâ event
Related stories
- PM Modi to unveil six new Vande Bharat trains; enhancing connectivity and safety
- PM Modi to flag off country's first Vande Metro service between Ahmedabad-Bhuj in Gujarat
UPI in Bhutan
In July 2021, the collaboration between NPCI International Payments Ltd (NIPL) and the Royal Monetary Authority (RMA) of Bhutan marked a significant milestone in financial integration between the two countries. The implementation of BHIM UPI QR-based payments in Bhutan opens up new avenues for seamless digital payment solutions for individuals and businesses in both nations. This initiative not only enhances economic connectivity but also strengthens the relationship between New Delhi and Thimphu. It highlights the commitment of both countries to utilize technology for the mutual benefit of their citizens and economies, showcasing the transformative potential of digital innovation in advancing financial inclusion and cross-border collaboration.
UPI, RuPay in Oman
The agreement between NPCI and the Central Bank of Oman (CBO) signed in October 2022 marks a significant step in expanding strategic ties between India and Oman. This landmark agreement paves the way for cooperation in digital finance and payments, enabling the use of RuPay cards and the UPI platform in Oman.
Oman, despite being smaller than Rajasthan, presents a promising market for digital financial services, offering opportunities for seamless digital remittances that benefit Indian workers and professionals in the country.
The economic and commercial relations between India and Oman have witnessed robust growth. Bilateral trade between the two countries has been on the rise, reaching $9.988 billion in FY 2021-2022 and $12.388 billion in FY 2022-2023. Investment flows have also been strong, with numerous joint ventures established in both India and Oman. Currently, there are over 6,000 India-Oman joint ventures in Oman, with an estimated investment of more than $7.5 billion.
Also Read |ÂIn UAE, PM Modi reiterates India to become third largest economy in his third term
New Delhi emerges as Muscat's key trading partner
New Delhi stands as one of Muscat's top trading partners, serving as the second-largest market for Oman's crude oil exports and non-oil exports after China and Saudi Arabia, respectively.
Oman's aspiration to position itself as a global hub for green hydrogen offers a promising opportunity for enhanced collaboration between Muscat and New Delhi. Green hydrogen, generated from renewable energy sources such as solar and wind power, represents a significant breakthrough in clean and sustainable fuel technology. Its potential to lower carbon emissions and address climate change makes it a crucial element in the transition towards a greener future.
UPI in Mauritius
The launch of RuPay cards and UPI connectivity between India and Mauritius marks a significant milestone in financial integration between the two countries. This tie-up enhances the ease of financial transactions for travellers between India and Mauritius, offering them convenient and secure payment options.
With the adoption of RuPay technology in Mauritius, Indian travellers can now use their RuPay cards for shopping and cash withdrawals in Mauritius, providing them with a seamless payment experience. Similarly, Mauritian travellers visiting India can use the Instant Payment System (IPS) app to make payments using UPI, further facilitating cross-border transactions.
Also Read |ÂDay 1 of PM's visit to UAE: Modi highlights bonhomie with MBZ, hails diaspora's contribution
Moreover, the interoperability between the MauCAS card scheme of Mauritius and RuPay technology enables banks in Mauritius to issue RuPay cards domestically. These cards can be used at ATMs and Point of Sale (PoS) terminals both locally in Mauritius and in India, enhancing financial accessibility for users.
The bilateral trade between India and Mauritius has witnessed significant growth since 2005, with India emerging as one of Mauritius's largest trading partners. In the fiscal year 2022-23, Indian exports to Mauritius amounted to $462.69 million, while Mauritian exports to India totaled $91.50 million, resulting in a total trade volume of $554.19 million.
Over the past 17 years, trade between the two countries has increased substantially, experiencing a growth rate of 132 percent. This growth trajectory is evident from the trade figures, which rose from $206.76 million in the fiscal year 2005-06 to $554.19 million in the fiscal year 2022-23.
UPI in Sri Lanka
The launch of UPI services in Sri Lanka on February 12 signifies a significant step towards enhancing digital connectivity and promoting financial inclusion in the region. During a virtual ceremony attended by PM Modi and Sri Lankan President Ranil Wickremesinghe, the integration of UPI services with Sri Lanka's payment ecosystem was officially announced.
With this initiative, Indian travellers visiting Sri Lanka will now have the convenience of making QR code-based payments at merchant locations using their UPI-enabled mobile applications. The project, facilitated by NPCI International Payments Limited (NIPL) in collaboration with partner banks and non-banking entities from Sri Lanka, marks a milestone in fostering closer economic ties and facilitating seamless transactions between the two countries.
The development comes at a crucial time for Sri Lanka, which faced a severe financial crisis in 2022, grappling with falling foreign currency reserves and challenges in financing essential imports such as fuel and medicine. During this period, New Delhi extended significant support to Colombo, providing nearly $4 billion in rapid aid between January and July 2022. India's help played a key role in helping Sri Lanka address its urgent economic needs and stabilize its financial situation.
India's bilateral trade with Sri Lanka remained robust in the fiscal year 2022-23, with exports totaling $5.11 billion, slightly lower than the previous year's figure of $5.8 billion. Imports from Sri Lanka amounted to $1.07 billion in the same period, a marginal increase from $1 billion in 2021-22. Despite the slight fluctuations in trade volumes, the economic partnership between the two countries continues to thrive.
A significant aspect of India's engagement with Sri Lanka is its substantial investment in various sectors of the Sri Lankan economy. Several leading Indian companies have made investments and established a presence in Sri Lanka, contributing to economic growth and bilateral cooperation. These investments span diverse sectors, including petroleum retail, tourism and hospitality, manufacturing, real estate, telecommunications, banking, and financial services.
UPI in Nepal
Nepal's adoption of the UPI in 2022 represents a significant step forward in the digital transformation of the country's economy. Becoming the first country to embrace India's UPI system, Nepal has signaled its commitment to advancing its digital economy. This development, facilitated by NPCI International Payments Ltd (NIPL) in collaboration with Gateway Payments Service (GPS) and Manam Infotech, is aimed at promoting digital financial inclusion and enabling real-time person-to-person (P2P) and person-to-merchant (P2M) transactions in Nepal.
Through this partnership, GPS, the authorized payment system operator in Nepal, will work alongside Manam Infotech to implement UPI services in the country. This initiative is expected to streamline cash transactions and accelerate Nepal's digitalization efforts, in line with the objectives of the Nepal Government and Nepal Rastra Bank, the Central Bank of Nepal. By embracing UPI, Nepal underscores its commitment to harnessing technology for the welfare of its citizens and strengthening financial connectivity with India.
The economic relationship between India and Nepal is robust and multifaceted. New Delhi stands as the largest trading partner of Kathmandu, with bilateral trade contributing significantly to both nations' economies. In the fiscal year 2022-23, India exported goods valued at $8 billion to Nepal, making it India's 11th largest export destination. On the other hand, Nepal imported goods worth $840 million from India during the same period.
Furthermore, Indian companies play a important role in Nepal's economic landscape, with investments from Indian firms comprising more than 30 percent of the total approved foreign direct investments (FDI) in Nepal. This underscores the deepening economic ties between the two nations and highlights India's role as a key contributor to Nepal's development and growth trajectory.
UPI in France
The integration of the UPI at the Eiffel Tower in France marks a significant advancement in the global adoption of digital payment solutions. The development is particularly beneficial for Indian tourists visiting the iconic landmark, as it allows them to conveniently make payments in rupees during their visit.
With UPI now available at the Eiffel Tower, tourists in Paris can easily book their trip to this historic monument using the UPI. This initiative not only enhances the convenience and accessibility of payment options for Indian travellers but also promotes greater financial connectivity between New Delhi and Paris.
PM Modi's demonstration of the UPI digital payments system to French President Emmanuel Macron during their visit to a local shop in Jaipur's Hawa Mahal last month underscored India's commitment to promoting digital financial inclusion and technological innovation.
Through this demonstration, the PM highlighted the effectiveness of India's digital payment infrastructure, particularly the UPI system, in facilitating secure, convenient, and efficient transactions.
The economic ties between New Delhi and Paris have shown resilience and growth in bilateral trade and investment, especially after the Covid-19 pandemic. Bilateral trade has reached a new peak, hitting $13.4 billion in 2022-23, with India's exports surpassing $7 billion. Additionally, India's imports from France also make a substantial contribution, standing at around $5.8 billion during the same period.
On the investment front, France ranks as India's 11th largest foreign investor, with a total investment of $10.5 billion in India between April 2000 and March 2023. This underscores the mutual confidence and commitment of both nations to foster economic cooperation and strengthen their partnership across various sectors.
UPI In UAE
PM Modi and UAE President Sheikh Mohammed Bin Zayed Al Nahyan on February 13 introduced UPI services in Abu Dhabi. PM Modi and the UAE President held a bilateral meeting, and several Memoranda of Understanding (MoUs) were exchanged in their presence.
A video circulating on social media depicts Al Nahyan tapping a plastic card with his name embossed on it to make a payment, symbolising the official launch of the payment system.
According to the Ministry of External Affairs (MEA), an agreement has been signed to interlink the instant payment platforms - UPI (India) and AANI (UAE). This agreement aims to facilitate seamless cross-border transactions between the two countries.
Since the implementation of the Comprehensive Economic Partnership Agreement (CEPA) on May 1, 2022, India's bilateral trade with the UAE has seen significant growth, with non-oil trade increasing by 14% year-on-year (y-o-y) between June and August 2022. This growth reflects the positive impact of the agreement on enhancing economic cooperation between the two countries. India's trade with the UAE has been steadily increasing, reaching $88 billion in FY24. This trend highlights the potential of the CEPA in realizing India's vision of becoming a $5 trillion economy by 2027.
