As UPI crosses 10 billion transactions-mark, a look at India’s key foreign policy sell: Digital public infra

Industry analysts see this as India’s bid to set itself up as a nation pioneering digital governance, especially as it aspires to assume a leadership role in the Global South. Within government circles, this is also being pegged as a differentiator from rival China, which is funding physical infrastructure development in other developing countries.

India wants to play a key role in the deployment of digital public infrastructure and plans to build and maintain the Global Digital Public Infrastructure Repository (GDPIR), a virtual repository of DPI voluntarily shared by G20 members and beyond.

The repository aims to share the practices and experiences of development and deployment of DPI which may include relevant tools and resources in different countries.

Marketing openness

A model that India has come to pioneer has been to create underlying technology – which remains under the government’s control – and allow private entities to use it to offer services and build products. The same is true of UPI, and Aadhaar, two crucial elements of the India Stack.

India Stack is the moniker for a set of digital codes and digital public goods that aim to unlock the economic primitives of identity, data, and payments at population scale. The overall architecture has three key layers – identity, payments, and data management.

The bedrock of India Stack is a set of digital identity products centred around Aadhaar, India’s national identity program. It can be used to remotely authenticate via two-factor or biometric authentication, receive digitally signed records such as driver’s licences, educational diplomas, and insurance policies, and sign documents or messages using a government-backed digital signature service.

UPI forms the second layer, which deals with payments, as it is designed to enable interoperability between money custodians, payment rails and front-end payment applications. The technology, which is in the custody of the National Payments Corporation of India (NPCI), has been licenced to several third-party private entities such as PhonePe, Google Pay and Paytm.

The third and final piece of the India Stack puzzle focuses on creating a new model for data governance. It operates as per a policy called the Data Empowerment and Protection Architecture (DEPA), which at its core has the institution of a consent management system — which will allow the sharing of the information — with a view to provide better financial, health and telecom-related products and services to individuals and firms.

Aside from UPI, a number of digital solutions that the Indian government has rolled out in the last few years, including CoWin, DigiLocker, Aarogya Setu, and Government e-Marketplace (GeM), among others, all utilise the three fundamental layers of the Indian Stack.

But the Indian government harbours a larger vision for the solution – taking it international, as evidenced by the messaging on its website: “Although the name of this project bears the word India, the vision of India Stack is not limited to one country; it can be applied to any nation, be it a developed one or an emerging one.”

Part of India’s foreign policy

Since June 2023, India has signed agreements with countries like Armenia, Sierra Leone, Suriname, Antigua & Barbuda and Papua New Guinea to share India Stack, with countries like Mauritius, Saudi Arabia having shown their interest in adopting the model, the government said earlier this month.

Similarly, UPI has also been taken to international markets such as France, UAE, Singapore and Sri Lanka, with countries like Japan having shown an interest in adopting the payments system.

DPI has been a key part of the government’s overall narrative about India throughout its G20 presidency. During the G20 digital economy ministers’ meeting in Bengaluru earlier this month, Prime Minister Narendra Modi said that India is an “ideal testing lab” for solutions that can be replicated globally anywhere in the world.

The PM also said that the country is willing to share its experiences in the domain of digital public goods, adding that India Stack has been envisaged to ensure ‘no one is left behind, especially those from the Global South’.