Agreement signed to launch Indian UPI payment service in Maldives

India and the Maldives have solidified their partnership with a significant new agreement aimed at introducing the Unified Payments Interface (UPI) in the island nation, a move that is expected to have a transformative impact on the Maldivian economy, particularly its tourism sector. The Memorandum of Understanding (MoU) was signed during External Affairs Minister S. Jaishankar’s official visit to the Maldives, marking a pivotal moment in bilateral relations.

The introduction of the Unified Payments Interface (UPI) in the Maldives is poised to significantly enhance financial inclusion and modernize the nation’s payment infrastructure. Speaking at a press conference alongside his Maldivian counterpart, Moosa Zameer, Jaishankar highlighted the transformative impact UPI has had in India, where it has taken digital transactions and financial inclusion to unprecedented levels.

"India, through its UPI, has revolutionized digital transactions, taking financial inclusion to new heights. Today, 40 percent of the world's real-time digital payments take place in our country," Jaishankar pointed out. He expressed optimism that the UPI system would soon be operational in the Maldives and emphasized its potential to positively influence the Maldivian tourism industry, which is a vital component of the nation’s economy.

Tourism accounts for nearly 30 percent of the Maldives' Gross Domestic Product (GDP) and generates over 60 percent of its foreign exchange earnings. By introducing a seamless and efficient digital payment system like UPI, the Maldives stands to further enhance its appeal as a tourist destination, making transactions easier for both domestic and international visitors.

Jaishankar's visit to the Maldives is significant, marking the first high-level visit from India since the pro-China President Mohamed Muizzu assumed office. This visit underscores India’s ongoing commitment to strengthening its relationship with the Maldives, despite the geopolitical challenges in the region.

He further emphasized that the partnership between India and the Maldives has consistently delivered tangible benefits to both nations, aligning with the aspirations and priorities of their peoples. The signing of the MoU for UPI is just one example of the numerous collaborative efforts between the two countries aimed at fostering mutual growth and prosperity.

During the visit, Jaishankar also participated in the inauguration of six High Impact Projects in the Maldives, covering areas such as street lighting, mental health, children’s speech therapy, and special education. These projects are part of India’s ongoing efforts to support the socio-economic development of the Maldives.

In addition to these initiatives, Jaishankar welcomed the renewal of the MoU between the National Centre for Good Governance and the Civil Services Commission of the Maldives. This agreement will facilitate the training of an additional 1,000 civil services officers, further strengthening the administrative capabilities of the Maldivian government.

Addressing the joint press conference, Maldivian Foreign Minister Moosa Zameer expressed his appreciation for India’s consistent support and described the relationship between the two nations as one built on mutual trust and respect. Zamir said, "India has always been our closest friend and an important development partner".He highlighted the enduring friendship between the two countries, which has flourished over the years through high-level exchanges and collaborative efforts in areas of shared interest.

Zameer also conveyed President Muizzu's proposal to initiate negotiations on a Free Trade Agreement (FTA) between the Maldives and India. He noted that such an agreement, along with other economic and trade-related agreements, would facilitate trade liberalization and mitigate the risks associated with doing business in both countries. This initiative aligns with the broader goal of enhancing economic cooperation and fostering a vibrant and prosperous partnership.

Moreover, Zameer emphasized the mutual commitment of India and the Maldives to strengthen their partnership through continued joint military exercises and expanded training opportunities for officers from both nations. This reflects the shared objective of ensuring the security and stability of the Indian Ocean region, which is of strategic importance to both countries.

Despite the strong bilateral ties, India’s relationship with the Maldives faced challenges last year when President Muizzu called for the withdrawal of Indian military personnel stationed at three aviation platforms in the Maldives. In response, the Indian military personnel were replaced by civilian staff by the agreed-upon date of May 10. However, both countries have managed to navigate these challenges and continue to work together on regional and multilateral issues of mutual concern.

On the topic of regional and global security, Zameer stated that India and the Maldives share a common understanding and are united in their efforts to address challenges such as terrorism, violent extremism, drug trafficking, human trafficking and the protection of human rights. This cooperation is vital in maintaining the stability and security of the region.

Jaishankar reiterated in his press statement that India and Maldives are not only close neighbors but also natural partners. He said "Today, we are mutually investing in each other's development and progress". He acknowledged the volatility and global tensions that have characterized the international landscape in recent years and reaffirmed India’s role as an anchor of stability for its friends, partners, and neighbors.

India's support for the Maldives has been particularly crucial in helping the nation navigate economic challenges, especially in the wake of the COVID-19 pandemic. India has provided financial assistance, budgetary support, and ensured the uninterrupted supply of essential goods to the Maldives, demonstrating its commitment to the welfare and development of the archipelago nation.

Jaishankar concluded by emphasizing India’s guiding philosophy of 'Sabka Saath, Sabka Vikas,' which translates to 'Together, We Prosper.' This philosophy underscores India’s commitment to fostering inclusive growth and development, not just within its borders but also in its relations with neighboring countries like the Maldives.

In summary, the introduction of the Unified Payments Interface in the Maldives is a landmark development in India-Maldives relations, with the potential to revolutionize the Maldivian economy, particularly its tourism sector. The agreement reflects the deepening partnership between the two nations and sets the stage for further collaboration in various fields, including trade, security, and governance. As India and the Maldives continue to navigate the challenges of a rapidly changing global environment, their partnership remains a beacon of stability and mutual prosperity in the region.