India to Introduce UPI Payment Service in Maldives

India and Maldives have signed an agreement to introduce the Unified Payments Interface in the archipelago nation, which will have a "very positive" impact on its tourism sector, External Affairs Minister S Jaishankar has said.

The Memorandum of Understanding was signed on Friday during Jaishankar's three-day official visit to the Maldives.

"Witnessed signing of MoU between (the) National Payments Corporation of India and (the) Ministry of Economic Development and Trade of Maldives on (the) introduction of (a) digital payment system in the Maldives," he said in a post on X.

Developed by the National Payments Corporation of India (NPCI), Unified Payment Interface (UPI) is an instant real-time payment system to facilitate inter-bank transactions through mobile phones.

Addressing a press conference with his Maldivian counterpart Moosa Zameer after their "productive discussions", Jaishankar said that India, through its UPI, has "revolutionised digital transactions".

Read: NPCI Might Set 1.2% Interchange for Pre-Sanctioned Credit Line on UPI: Report

Stressing that it has taken financial inclusion in India to new levels, he said "Today 40 per cent of the world’s real-time digital payments take place in our country."

"We see this revolution, every day in our lives. I am pleased to note that with the signing of the MoU today, we have taken the first step towards bringing this digital innovation to Maldives," he said.

"I wish the very best to stakeholders on both sides and hope that we will soon see the first UPI transaction here. I should mention that it will have a very positive impact on tourism," he added.

Tourism is the main source of economic activity for the Maldives, contributing nearly 30 per cent of the GDP and generating more than 60 per cent of foreign exchange.

Jaishankar's visit aims to reset the bilateral relationship with the Maldives and is the first high-level trip from India after the archipelago nation's pro-China president, Mohamed Muizzu, assumed office last year.

"India’s partnership with the Maldives is based on our deep desire to work together for each other’s welfare and interests. It is a partnership that has enabled us to always swiftly and effectively respond to challenges, as witnessed in the past," Jaishankar said.

"It is a partnership that has enabled us to deliver results and bring tangible benefits to our people in accordance with their wishes, aspirations and priorities," he said.

In a post on X, Jaishankar also said, "Jointly inaugurated six High Impact Projects in areas of street lighting, mental health, children speech therapy and special education."

"Welcome renewal of MoU between National Centre for Good Governance and Civil Services Commission on (the) training of additional 1,000 civil services officers," he added.

Addressing the joint press conference, Maldivian Foreign Minister Zameer said, "India has always been one of our closest friends and a vital development partner."

He said the "enduring friendship" was built on a foundation of mutual trust and respect and has continued to flourish over the years.

"High-level exchanges between our countries have deepened our dialogue and cooperation in areas of shared interest. We remain dedicated to strengthening and advancing this mutually beneficial partnership," he said.

"Minister Dr Jaishankar and I agreed that much more needs to be done to promote trade and investment between the Maldives and India," he said, adding that both sides are committed to establishing "effective mechanisms to enhance economic cooperation, fostering a vibrant and prosperous partnership that will benefit both the nations."

Zameer said he conveyed President Muizzu's proposal to begin negotiations on a Free Trade Agreement between the Maldives and India. "This agreement alongside other economic and trade-related agreements will facilitate trade liberalisation and ease the risks of doing business in both our countries," he said.

Zameer said that India and Maldives have also mutually agreed to further strengthen their partnership by continuing joint exercises and expanding training opportunities for officers from both countries, asserting that this reflects "our commitment to working together to ensure the security of our nations as well as ensuring the safety and stability of the Indian Ocean region."

India's relations with the Maldives suffered a major setback last year when President Muizzu demanded the withdrawal of Indian military personnel manning three aviation platforms in the Maldives. Subsequently, the Indian military personnel were replaced by civilians by May 10, the mutually agreed date.

"On regional and multilateral issues of importance, our countries have a common understanding and are united in our efforts to resolve them. We agreed to continue our cooperation on issues ranging from combating terrorism, violent extremism, drugs, human trafficking and to the promotion and protection of human rights," Zameer said.

In his press statement, Jaishankar said that India and the Maldives "are not just close neighbours, we are also natural partners."

"Today, we are mutually invested in each other’s development and progress. In a globalised and interconnected world, we see a lot of volatility and global tensions. Even as the world is recovering from the impact of the COVID pandemic, we have been confronted with new challenges arising from international conflicts," he said.

In this tumultuous environment, India has been and will be, an anchor of stability for its friends, partners and neighbours. To the Maldives specifically, India has provided support to deal with economic challenges through financial assistance and budgetary support, and by ensuring an uninterrupted supply of critical items, he noted.

India's actions have been and will continue to be guided by its firm commitment to the philosophy of ‘Sabka Saath, Sabke Vikas – which is- Together, we prosper', Jaishankar said.