India and Maldives have recently taken a major step towards strengthening their economic partnership by signing an agreement to introduce the Unified Payments Interface (UPI) in the Maldives.
According to India’s External Affairs Minister S. Jaishankar, the initiative is expected to have a “very positive” impact on the archipelago nation’s tourism sector.
The Memorandum of Understanding (MoU) was signed during Jaishankar’s three-day official visit to the Maldives, marking a new chapter in the bilateral relationship between the two countries.
UPI’s role in financial inclusion
Developed by the National Payments Corporation of India (NPCI), UPI is a real-time instant payment system that facilitates interbank transactions through mobile phones.
Addressing reporters alongside his Maldivian counterpart Moosa Zameer, Jaishankar emphasised how UPI has “revolutionised digital transactions” in India.
He noted that the system has significantly advanced financial inclusion in India, where 40% of the world’s real-time digital payments are now made in the country. The introduction of UPI in the Maldives is expected to bring similar benefits, making financial transactions more accessible and efficient.
Impact on tourism
Tourism is the backbone of the Maldives’ economy, contributing nearly 30% of its GDP and generating over 60% of its foreign exchange.
The introduction of UPI is expected to greatly benefit the tourism sector by simplifying payment processes for local and international visitors.
Jaishankar expressed optimism that the first UPI transaction in the Maldives will happen soon, enhancing the overall experience of tourists and supporting the growth of the sector.
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