India and the Maldives have signed a landmark agreement to introduce the Unified Payments Interface (UPI) in the island nation, marking a significant step in strengthening bilateral relations and boosting the Maldives' crucial tourism sector. The Memorandum of Understanding (MoU) was signed during Indian External Affairs Minister S. Jaishankar's three-day visit to the Maldives, where he met with Maldivian President Mohamed Muizzu and other officials.
The introduction of UPI in the Maldives is expected to have a "very positive" impact on the country's tourism industry, which is a key driver of its economy, contributing nearly 30% of the GDP and generating over 60% of foreign exchange. Jaishankar emphasized the transformative effect of UPI in India, where it accounts for 40% of the world’s real-time digital payments, and expressed optimism that the payment system would similarly benefit the Maldives.
The MoU was signed between the National Payments Corporation of India (NPCI) and the Maldives' Ministry of Economic Development and Trade. UPI, developed by NPCI, is a real-time payment system that facilitates inter-bank transactions through mobile phones, making digital payments faster and more accessible.
Jaishankar highlighted that the partnership between India and the Maldives is built on mutual trust and respect, with both nations committed to working together for each other's welfare. This visit, the first high-level trip from India since President Muizzu, known for his pro-China stance, took office, aims to reset and strengthen the bilateral relationship.
The agreement to introduce UPI is part of a broader effort to enhance economic cooperation between the two countries. Maldivian Foreign Minister Moosa Zameer noted that high-level exchanges have deepened dialogue and cooperation, and both sides are exploring further trade and investment opportunities, including the possibility of negotiating a Free Trade Agreement.
Additionally, Jaishankar and Zameer inaugurated six high-impact projects in the Maldives, including initiatives in street lighting, mental health, children’s speech therapy, and special education. They also renewed an MoU for the training of an additional 1,000 civil service officers from the Maldives.
India's relationship with the Maldives faced challenges last year when President Muizzu called for the withdrawal of Indian military personnel from the Maldives, which led to their replacement with civilian personnel. Despite these tensions, both countries have reaffirmed their commitment to strengthening their partnership, particularly in security and economic cooperation.
Jaishankar reiterated India's commitment to supporting the Maldives in dealing with economic challenges and ensuring stability in the region. The UPI agreement and other initiatives underscore the ongoing efforts to enhance bilateral ties and mutual development between the two nations.
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