India and Maldives have signed a Memorandum of Understanding (MoU) to introduce the Unified Payments Interface (UPI) in the Maldives. External Affairs Minister S Jaishankar, during his official visit to Maldives, announced that this move will positively impact the Maldives’ tourism sector.
UPI Introduction and Expected Benefits
The agreement, signed on Friday, marks a significant step in enhancing digital payment systems in the Maldives. Developed by the National Payments Corporation of India (NPCI), UPI is an instant real-time payment system that facilitates mobile-based inter-bank transactions. Jaishankar highlighted that UPI has revolutionized digital transactions in India, where 40% of the world’s real-time payments occur. He anticipates that the implementation of UPI will have a “very positive” effect on the Maldivian tourism industry, which is a crucial economic sector for the island nation.
Strengthening Bilateral Relations
Jaishankar’s visit is also aimed at resetting India-Maldives relations following a period of tension. The visit is the first high-level trip from India since President Mohamed Muizzu assumed office last year. During the visit, Jaishankar and Maldivian Foreign Minister Moosa Zameer discussed enhancing economic cooperation, including the renewal of a Memorandum of Understanding for civil service training and the inauguration of several high-impact projects in the Maldives.
Future Prospects and Ongoing Cooperation
The Maldivian government has expressed interest in negotiating a Free Trade Agreement with India, which Zameer believes will facilitate trade and investment between the two nations. Both countries have committed to further strengthening their partnership through joint exercises, expanded training opportunities, and collaboration on regional security issues. Jaishankar reiterated India’s commitment to supporting the Maldives through economic assistance and critical supply provisions, emphasizing a shared commitment to mutual development and stability.