According to reports, following Prime Minister Narendra Modi's announcement of the introduction of the Unified Payments Interface (UPI) in France, it has now been revealed that New Delhi is seeking a similar agreement with Indonesia. The two countries are reportedly working towards approving bilateral trade in domestic currency, real-time card recognition, and digital payments.

This move is expected to facilitate the utilization of UPI and similar payment tools. The discussions on this matter took place during the meeting between Union Finance Minister Nirmala Sitharaman and her Indonesian counterpart Sri Mulyani Indrawati, held on the sidelines of the G20 meeting of Finance Ministers and Central Bank Governors (FMCBG) in Gandhinagar, Gujarat.

“The areas of cooperation include bilateral investment, financial services and infrastructure development, among others. For instance, India has developed expertise in digital public infrastructure. It can provide time-tested solutions for convenient and affordable digital payments, which can assist Indonesia in achieving its financial inclusion goals," said Sitharaman after the meeting.

India previously signed a Memorandum of Understanding (MoU) with the UAE to establish a framework for settling cross-border transactions using local currencies and connecting fast payment systems.

"Like UAE, there are talks going on with Indonesia on something similar: real-time settlement and trading in local currencies. Talks are going on. It will get done soon," a source close to the matter was quoted as saying by Moneycontrol.

If successfully implemented, the deal could have significant implications for both nations. Indonesia currently holds the position of being India's largest trading partner within the ASEAN region, with bilateral trade estimated at approximately $39 billion last year.

During PM Modi's recent visit to France, it was announced that the country would adopt India's UPI payments system. PM Modi confirmed that an agreement had been reached, and the first UPI transaction in France would take place at the iconic Eiffel Tower, enabling Indian tourists to make payments in Indian rupees. This development follows the MoU signed between the National Payments Corporation of India (NPCI) and France's secure online payment system, Lyra, last year.

Since its introduction in India in 2016, UPI has gained significant traction, with PhonePe being one of the initial platforms to integrate it. Subsequently, other competitors embraced UPI, turning it into a formidable system that has attracted the interest of foreign nations. Countries such as the UAE, Singapore, Nepal, and Bhutan have already adopted UPI, while several others are eagerly waiting to join in.

In terms of performance, UPI demonstrated remarkable growth, recording a staggering 9.93 billion transactions in June, with a total value of Rs 14.75 trillion, as reported by NPCI.

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