India and the Maldives have signed an agreement to introduce a unified payments interface in the archipelago nation, which External Affairs Minister S. Jaishankar said will have a “very positive” impact on the country’s tourism sector.
The MoU was signed on Friday during External Affairs Minister Jaishankar’s three-day official visit to the Maldives.
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“Witnessed the signing of a Memorandum of Understanding between the National Payments Corporation of India and the Ministry of Economic Development and Trade of the Maldives for the implementation of a digital payments system in the Maldives,” he said in X’s post.
Developed by the National Payments Corporation of India (NPCI), the Unified Payment Interface (UPI) is an instant, real-time payment system that facilitates interbank transactions via mobile phones.
Speaking to reporters after “productive discussions” with his Maldives counterpart Moosa Zameer, External Affairs Minister Jaishankar said India has “revolutionised digital trade” through UPI.
Highlighting that financial inclusion in India has reached a new level, he said, “40% of the world’s real-time digital payments now happen in India.”
“We are witnessing this revolution every day in our daily lives and with the signing of the MoU today, we are pleased to take the first step in bringing this digital transformation to the Maldives,” he said.
“I wish both stakeholders the best and hope that the first UPI transactions will take place here very soon. I would add that this will have a very positive impact on tourism,” he added.
Tourism is the main source of economic activity in the Maldives, contributing approximately 30% of its GDP and generating over 60% of its foreign exchange earnings.
Jaishankar’s visit is aimed at rebuilding bilateral ties with the Maldives and marks the first high-level visit from India to the country since pro-China President Mohamed Muizz took office last year.
“The partnership between India and the Maldives is based on a strong desire to work together for each other’s welfare and benefit. This partnership has always enabled us to respond to challenges swiftly and effectively, as we have seen in the past,” Jaishankar said.
“This partnership has enabled us to deliver results that are in line with the hopes, aspirations and priorities of our people and bring tangible benefits,” he said.
Jaishankar also said in his X post that they have “jointly launched six high-impact projects in the areas of street lighting, mental health, child speech therapy and special education.”
“We welcome the renewal of the memorandum of understanding between the National Centre for Good Governance and the Civil Service Commission for the training of an additional 1,000 civil servants,” he added.
Speaking at a joint press conference, Maldivian Foreign Minister Zamir said, “India has always been our closest friend and an important development partner.”
He said the “enduring friendship” was built on a foundation of mutual trust and respect and had continued to flourish over the years.
“High-level exchanges between the two countries have deepened dialogue and cooperation in areas of common interest. We remain committed to strengthening and advancing this mutually beneficial partnership,” he said.
“Minister Jaishankar and I agreed that more needs to be done to boost trade and investment between the Maldives and India,” he said, adding that the two countries were committed to establishing “effective mechanisms to strengthen economic cooperation and foster a vibrant and prosperous partnership that benefits both our countries.”
Zamir said he conveyed President Muiz’s proposal to start negotiations on a free trade agreement between the Maldives and India. “This agreement, alongside other economic and trade-related agreements, will promote trade liberalization and reduce risks in doing business in both countries,” he said.
Zamir said India and the Maldives also agreed to further strengthen their partnership by continuing joint exercises and expanding training opportunities for officers from both countries, asserting that this reflects “our commitment to work together to ensure the security of both countries and the security and stability of the Indian Ocean region.” Indo-Maldives relations suffered a major blow last year when President Muiz demanded the withdrawal of Indian military personnel stationed at three air platforms in the Maldives. They were then replaced by civilians by the agreed date of May 10.
“Our two countries share common understanding and are united in resolving important regional and multilateral issues. We agreed to continue cooperation on a wide range of issues, from the fight against terrorism, violent extremism, narcotics and human trafficking to the promotion and protection of human rights,” Zamir said.
Speaking at a press conference, External Affairs Minister Jaishankar said India and the Maldives are “not just neighbours but natural partners”. “Today, we are invested in each other’s development and progress. In our globalised and interconnected world, we are seeing a lot of instability and global tensions. As the world is recovering from the impact of the COVID pandemic, we are facing new challenges arising from international conflicts,” the foreign minister said.
In this turbulent environment, India has been and will continue to be a bastion of stability for our friends, partners and neighbours. To the Maldives in particular, India has been providing support to address its economic challenges through financial assistance, budgetary support and by ensuring uninterrupted supply of critical supplies, he noted.
Jaishankar said India’s actions have been and will continue to be guided by a firm commitment to the philosophy of ‘prosper together’.
