GS3 – Indian Economy
Context:
India’s Unified Payments Interface (UPI) has seen a significant rise in cross-border usage, with over six lakh transactions recorded in FY 2025-26. This growth highlights the increasing global recognition of India’s digital payment infrastructure and its role in facilitating low-cost, efficient international retail transactions.
Project Nexus Initiative:
- The Government of India, RBI, and NPCI are integrating UPI with foreign Fast Payment Systems (FPS) under Project Nexus.
- The initiative aims to enable near-instant, cost-effective cross-border fund transfers, supporting trade, remittances, and routine international transactions for individuals and businesses.
Growth Statistics:
- In FY 2024-25, cross-border UPI transactions grew 20 times in volume and 13 times in value compared to FY 2023-24.
- By July 2025, the total value of international UPI transactions reached ₹169.29 crore, reflecting rapid global adoption.
Fast Payment Systems (FPS):
- FPS are technological frameworks that allow instant fund transfers between banks domestically and internationally.
- Integrating UPI with FPS ensures secure, seamless, and cost-efficient cross-border payments, enhancing UPI’s global usability.
Global Partnerships:
- Singapore became India’s first cross-border UPI partner in 2023, providing a model for future collaborations.
- Currently, UPI operates in seven countries: UAE, Nepal, Bhutan, Singapore, Mauritius, France, and Sri Lanka
- This expansion reinforces India’s position in the global digital payments ecosystem and strengthens economic ties with partner nations.
Significance:
- Promotes smooth digital trade and remittances with minimal friction.
- Reduces reliance on traditional banking channels and high-cost remittance services.
Establishes India as a global leader in interoperable digital payment solutions.