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

  • September 4, 2023
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
No Comments

 

 

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

Subject: Science and Technology

Section: Awareness in IT and computer

Introduction

  • In August, the United Payments Interface (UPI) achieved a significant milestone, surpassing 10 billion transactions.
  • UPI, initially a domestic success, has become a critical element of India’s foreign policy strategy.

India’s Global Outreach

  • During its G20 presidency, India highlighted its efforts to establish digital public infrastructure, collectively known as the India Stack.
  • India aimed to encourage other nations to adopt similar technologies.
  • This strategy positions India as a global leader in digital governance, setting it apart from China’s focus on physical infrastructure.
  • Since June 2023, India has signed agreements with countries like Armenia, Sierra Leone, Suriname, Antigua & Barbuda, and Papua New Guinea to share the India Stack model.
  • Mauritius and Saudi Arabia have expressed interest in adopting this approach.
  • UPI has expanded to international markets like France, UAE, Singapore, and Sri Lanka, with Japan considering adoption.

Digital Public Infrastructure:

  • Digital Public Infrastructure (DPI) is a digital network or framework that enables governments to deliver essential economic opportunities and social services efficiently and securely to all residents within a country.
  • It typically includes systems for digital identity, payments, and data exchange, and it plays a crucial role in promoting financial inclusion, healthcare access, and economic growth.

The Global Digital Public Infrastructure Repository (GDPIR)

  • India is developing the GDPIR to share best practices, experiences, and tools related to digital public infrastructure.
  • The repository will benefit G20 members and extend its reach beyond.

The India Stack:

India Stack is the moniker for a set of open APIs and digital public goods that aim to unlock the economic primitives of identity, data, and payments at a population scale.

It comprises three layers:

  1. Aadhaar – The Identity Layer
    • The core of India Stack, reshaping identity verification.
    • Biometric authentication for secure, remote identity verification.
    • Digilocker: Digital records, like licenses and diplomas, are issued and shared securely.
    • Digital signatures ensure legal validity in online transactions.
    • Enables financial inclusion and government service delivery.
  1. UPI – The Payments Layer
    • Facilitates seamless, interoperable payments across institutions.
    • Open and unified payment platform for banks and service providers.
    • Private sector participation (e.g., PhonePe, Google Pay) fosters innovation.
    • Promotes financial inclusion, accessible to those without bank accounts.
  1. Data Governance – The Third Layer
    • Data Empowerment and Protection Architecture (DEPA) focuses on data governance.
    • A consent management system gives users control over data sharing.
    • Enhances services (finance, health) tailored to individual preferences.
    • Emphasizes data privacy and security.
    • A new category of regulated entities is known as ‘consent managers’ (in the Financial Services sector these will be known as Account Aggregators).

As UPI crosses 10 billion transactions mark Science and tech