UAE, Singapore Working to Make India’s RuPay ‘Acceptable’ in Their Countries, Finance Minister Says

In addition to exporting its domestic payments systems to other countries, Delhi has been involved in negotiations with several governments to advance bilateral trade in local currencies. The efforts are designed to encourage the settlement of international transactions in the Indian rupee and other national currencies rather than the US dollar.

Indian Finance Minister Nirmala Sitharaman has said that Singapore and the United Arab Emirates (UAE) are working towards making the RuPay payment mechanism “acceptable” in their countries.

Note that the Indian government officially launched RuPay cards in Singapore and the UAE in 2019.

In a discussion about ‘India’s Economic Prospects and Role in the World Economy’, organized by the Washington-based Brookings Institution on Tuesday, Sitharaman also said that the Indian government was also holding discussions with several other countries which have shown an interest in the Rupay system.

The Rupay mechanism has also been rolled out in Nepal and Bhutan, which neighbor India. New Delhi is also holding talks with France and the Philippines to make the Indian payment system widely acceptable in their countries, according to officials.

The Rupay payment mechanism is operated by the National Payments Corporation of India (NPCI), which is backed by the Reserve Bank of India (RBI). The system is meant to serve as an alternative to Mastercard and Visa.

"Not just that, the Unified Payments Interface (UPI), the BHIM app and the NPCI are all now being worked in such a way that their systems in their respective country, however, robust or otherwise can talk to our system and the interoperability itself will give strength for Indians’ expertise in those countries," said the Indian finance minister.

The UPI and the BHIM app were also developed by the NPCI. In conjunction with the Rupay payment system, BHIM and UPI have been floated with the intention to create a “robust digital payment ecosystem”, according to the government.

The UPI is meant to serve as an alternative to the Western-backed SWIFT system, while the BHIM app allows for the real-time transfer of funds using the UPI as an interface.

Sitharaman also underlined during her conversation at the Brookings Institution that the rolling out of the domestically-developed payment systems was part of India’s efforts to advance digitization in all sectors of the economy.

“Since 2014 (when Prime Minister Narendra Modi first came to power), efforts towards digitization in all sectors of the economy have gathered momentum,” she said, adding that the COVID pandemic also presented the Indian government with the “opportunity” to increase the coverage of digital payments.