Sitemap

India Insight: Digital Diplomacy Builds Bridges

Honor Unveiled Latest Tablet To Compete With Apple

Chinese tech company Honor Device Co Ltd...

Sweden Takes Over The EU Presidency From 1 January

From 1 January to 30 June 2023,...

Egypt And Berlin’s Icon: The Bust Of Queen Nefertiti

The bust of Queen Nefertiti housed in...

55th International Car Show Opened

The International Car Show, 55th in a row, opened in Belgrade and has gathered 250 exhibitors who will present...

MediGroup Appoints Marijana Vasilescu As The New CEO

MediGroup, the leading private healthcare company in Serbia appoints Marijana Vasilescu as the new CEO, starting 1st of April...

Serbia Is Spain’s Main Foreign Trade Partner In The Western Balkans

Serbia is the main foreign trade partner of Spain in the Western Balkans and is responsible for more than...

Đukanović And Milatović In The Second Round Of Presidential Elections In Montenegro

According to preliminary data from the Montenegrin Monitoring Center (CeMI), based on 95.5 per cent of the processed sample,...

In 2022 Norway Earned Five Times More From The Sale Of Oil And Gas

In 2022, Norway earned five times more from the sale of oil and gas compared to previous years, thanks...

New Delhi’s digital diplomacy is making inroads. When India rolled out its online payments infrastructure to power real-time money transfers six years ago, it unwittingly laid the foundation for a technology-driven Belt and Road initiative. It gives Prime Minister Narendra Modi a more cost-efficient answer to China’s multi-trillion-dollar splurge on ports and pipelines in the intensifying battle for regional influence.

Modi is eager to export the system and other parts of India’s growing stack of digital public goods. Against that aim, plans announced last week for an entity backed by Nepal’s central bank to deploy India’s payments model is a significant development for the Himalayan nation sandwiched between two jostling giants. The rollout will happen in partnership with the international unit of the National Payments Corporation of India, an initiative from the Reserve Bank of India.

It sets up Nepal to replicate the success of its southernly neighbour’s booming digital economy, considered by venture capitalists as one of the world’s most sophisticated markets for financial technology. India’s interoperable “Unified Payments Interface” is an open set of specifications that speeds up the movement of cash, reduces the scope for dodging the taxman and makes it easier for startups to thrive. UPI underpins numerous money-sending applications. Among the biggest are Alphabet’s (GOOGL.O) G-Pay, Walmart’s (WMT.N) PhonePe and One97 Communications’ (PAYT.NS) Paytm. It is a leading payment option on everything from e-commerce to airline websites.

The system democratises payments by allowing labourers, young professionals, small shopkeepers and large merchants to transfer money through their smartphones at zero-cost to each other’s bank accounts in real-time. It uses a QR-code, an email-styled address or a phone number. UPI handled some 39 billion transactions amounting to $940 billion in 2021, equal to nearly a third of India’s GDP. The disarmingly simple design reduces the appeal of credit card companies MasterCard and Visa (V.N). And in India’s payments paradise there’s no duopoly as in China, where Ant and Tencent (0700.HK) dominate.

Nepal’s embrace adds to a growing list of endorsements. Encouraged by India’s rapid digital development, Google wrote to the U.S. Federal Reserve in 2019 recommending an open system “akin to UPI” for the central bank’s planned interbank real-time gross settlement service. Last year, another important and strategically placed Indian neighbour, Bhutan, opted to deploy UPI-specification QR codes, a potential precursor to its deeper adoption of India’s protocol. India also has a partnership with Singapore to accept UPI QR-based payments.

Lucrative Ground

Closing a soft infrastructure gap marks a stark contrast to China President Xi Jinping’s attempt to plug the hard infrastructure deficit stretching from Pakistan to Sri Lanka. His Belt and Road programme formally started in 2013. At its best, constructing transport corridors is a good way to make friends because such projects provide countries with highly desired funding, jobs, taxes and technical expertise. When it goes wrong, however, Beijing’s readiness to extend hefty loans on opaque terms can look like debt-trap diplomacy, even if it isn’t intended to be. On the other hand, India’s direct financial gain from sharing its technology will likely be limited to nominal fees.

Mirroring India’s success will have its own challenges, however. Governments need to accept their own UPI-like systems as a public good and ideally have them overseen by a neutral umbrella organisation with the full backing of the country’s central bank. NPCI, the overarching group in India for UPI and other payment services, is a not-for-profit whose growing base of shareholders include domestic lenders, foreign peers, fintech firms and international technology goliaths. As a result, NPCI reflects the payments community in India. Countries can develop new products and services themselves atop the digital rails without depending on India.

India’s tech achievements also extend beyond its payments system. “UPI is part of a larger fintech revolution that is delivering the last mile of state services to the people, and which the private sector has been able to use well”, says Manjeet Kripalani, executive director of Gateway House, a foreign policy think tank based in Mumbai. Another catalyst for India’s startup economy is its biometric identity system. Aadhaar, which covers some 1.3 billion people, helped hundreds of millions of individuals access bank accounts. Getting data security right is important, too.

Read more...

The Sun Shines Bright On Indian Technology Start-ups

Backed by rapid digitalisation, tech adoption and liberal government policies, India’s technology start-up ecosystem is witnessing a significant growth trajectory. The next step will...

H.E. Sanjiv Kohli, Ambassador Of India To Serbia

Time-Tested Relationship

As India’s Ambassador to Serbia, it will be my sincere endeavour to add more substance and ambition to this important relationship. I would personally...

Further out, there could be mutually beneficial returns for India and those that follow its technology lead. Global adoption of a UPI QR standard would support a long overdue revolution in driving down cross-border remittance fees. India has a strong incentive: It’s the world’s largest recipient of such inflows, receiving $87 billion in 2021, according to estimates from the Global Knowledge Partnership on Migration and Development, or KNOMAD. For countries like Nepal, for whom India is its top trade partner, overall remittance inflows are small in volume but amount to nearly 25% of GDP.

The costs for sending money across borders around the world is painfully high, averaging nearly 6.3% or nearly $13 for every $200 transferred, the typical remittance transaction size, per World Bank estimates. The percentage fee is less for higher amounts. UPI could drive the cost down closer to the pure foreign exchange margin, which ranges from 1.4% to 3%. Sending funds through digital services is already cheaper than using banks and money transfer operators. As China grapples with the economic and diplomatic constraints of its overseas public works projects, India’s digital nuts and bolts are building useful bridges.

Source: reuters.com by Una Galani, Photo: REUTERS/Shailesh Andrade

Related Articles

Celebration Of Republic Day Of India

The Embassy of India India in Belgrade celebrated the 74th Republic Day of India on 26 January 2023 to commemorate the coming into force of the Constitution of...

The Embassy Of India In Belgrade Celebrated Indian Technical & Economic Cooperation

The Embassy of India in Belgrade celebrated Indian Technical & Economic Cooperation (ITEC) Day on 4 November 2022. Besides senior officials from the Ministry...

Indian Independence Day marked in Belgrade

India celebrated the 75th anniversary of its independence on 15 August 2022. To celebrate and commemorate these 75 years of progressive India and the...

Celebration Of Independence Day Of India

India celebrated the 75th anniversary of its independence on 15 August 2022. To celebrate and commemorate these 75 years of progressive India and the...

7th​ August: National Handloom Day

Handloom sector is a symbol of India’s rich and varied cultural heritage. Handloom is an important source of livelihood in rural and semi-rural parts of​...

H.E. Sanjiv Kohli, Ambassador Of India To Serbia

Rebalance And Multipolarity

India remains committed to an international order marked by robust, rule-based multilateral institutions. It has campaigned for the reform of the UN Security Council...

By Air Marshal TS Randhawa

India’s Cradle Of Military Leadership

One of the most prestigious military training institutions in the world, the National Defence Academy (NDA) shapes bravehearts who serve all three wings of...

By Shrabasti Anindita Mallik

Sights To Behold

Monsoon provides not just relief from the scorching heat, but also breathes new life into nature and all her elements. As India welcomes the...