India and Maldives have signed an agreement to introduce Unified Payments Interface (UPI) in the archipelago nation, which will have a “very positive” impact on the tourism sector there, External Affairs Minister S Jaishankar said.
The MoU was signed on Friday. Jaishankar’s three-day official visit to Maldives.
“MoU signed between National Payments Corporation of India and Ministry of Economic Development and Trade of Maldives to launch digital payment system in Maldives,” he said in a post on 28 May.
Unified Payments Interface (UPI), developed by the National Payments Corporation of India (NPCI), is an instant real-time payment system to facilitate inter-bank transactions through mobile phones.
Addressing a press conference after “productive discussions” with his Maldivian counterpart Moosa Zameer, Jaishankar said India has “revolutionised digital transactions” through its UPI.
Emphasising that financial inclusion in India has reached new levels, he said, “Today, 40 per cent of the world’s real-time digital payments happen in our country.”
He said, “We see this revolution every day in our lives. I am happy to note that with the signing of the MoU today, we have taken the first step towards bringing this digital innovation to the Maldives.”
He said, “I wish all the best to the stakeholders on both sides and hope that we will see the first UPI transaction here soon. I would also like to say that this will have a very positive impact on tourism.”
Tourism is the main source of economic activity in the Maldives, contributing around 30 percent of GDP and generating more than 60 percent of foreign exchange.
Jaishankar’s visit is aimed at strengthening bilateral ties with the Maldives and is the first high-level visit from India after the archipelago nation’s pro-China President Mohamed Muizzu took office last year.
Jaishankar said, “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 always enabled us to respond swiftly and effectively to challenges, as seen in the past.”
“This is a partnership that has enabled us to deliver results and deliver tangible benefits to our people in line with their wishes, aspirations and priorities,” he said.
In a post on X, Jaishankar also said, “Jointly inaugurated six high-impact projects in the areas of street lighting, mental health, children’s speech therapy and special education.”
“The renewal of the MoU between the National Centre for Good Governance and the Civil Service Commission on training of additional 1,000 civil service officers is welcome,” he said.
Addressing the joint press conference, Maldives Foreign Minister Zameer said, “India has always been one of our closest friends and an important development partner.”
He said this “enduring friendship” is 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 interests. We are dedicated to strengthening and further expanding 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 the two sides are “committed to establishing effective mechanisms to enhance economic cooperation, fostering a vibrant and prosperous partnership that will benefit both countries.”
Zameer said he conveyed President Muizzo’s proposal to start negotiations on a free trade agreement between the Maldives and India. “This agreement, along with other economic and trade-related agreements, will facilitate trade liberalisation and reduce the risk of doing business in both our countries,” he said.
Zameer said India and Maldives have also mutually agreed to further strengthen their partnership by continuing joint exercises and expanding training opportunities for officers of both countries. He said this “reflects our commitment to work together to ensure the security of our countries as well as the security 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 deployed at three aviation platforms in the Maldives. Subsequently, Indian military personnel were replaced by civilian personnel by May 10, a mutually agreed date.
“Our countries have a common understanding on important regional and multilateral issues and we are united to resolve them. We agreed to continue our cooperation on issues such as combating terrorism, violent extremism, narcotics, human trafficking, and promotion and protection of human rights,” Zameer said.
In his press statement, Jaishankar said that India and Maldives are “not only close neighbours, but we are also natural partners”.
He said, “Today we are mutually investing in each other’s development and progress. In a globalised and interconnected world we are witnessing a lot of instability and global tensions. Even as the world is recovering from the impact of the Covid pandemic, we are facing new challenges posed by international conflicts.”
In this turbulent environment, India has been and will continue to be a stabiliser for its friends, partners and neighbours. India has particularly helped the Maldives overcome its economic challenges through financial assistance and budgetary support and ensured uninterrupted supply of critical commodities, he said.
Jaishankar said India’s actions have been and will continue to be guided by its firm commitment to the philosophy of ‘Sabka Sath, Sabke Vikas – which means – together, we prosper’.