Business & Economy

De-Dollarisation: India Plans UPI Expansion Across Middle East

© Photo : Social Media Unified Payments Interface (UPI)
Unified Payments Interface (UPI) - Sputnik India, 1920, 15.02.2024
India is moving away from western-backed payment platforms, most of which are based on the US dollar (USD), and expanding the use of local currencies in its international trade settlements and transactions.
New Delhi has said that it is aiming to link its Rupee-based Unified Payments Interface (UPI) system to real-time payments' systems of Bahrain, Kuwait, Oman, Qatar and Saudi Arabia in the Middle-East, as well as to that of Malaysia, according to a country statement delivered at the ministerial consultations of the Abu Dhabi Dialogue (ADD) this week.
Muktesh Pardeshi, Secretary (Consular, Passport, Visa and Overseas Indian Affairs) at India's Ministry of External Affairs (MEA), who headed the Indian delegation, told the ministerial that the interlinking of the respective domestic payments' systems would reduce the transaction costs significantly, according to the statement released by India on Thursday.

"As a country which received $125 billion in remittances last year, we are working on reducing remittance costs using Digital Public Infrastructure. Unified Payment Interface (UPI) of India and Real Time Payment (RTP) systems of participating countries can work together to bring down the cost of sending remittances to India by 30-40% from the prevailing prices," the senior Indian diplomat highlighted.

Noting that India and the UAE have already entered into an agreement to interlink UPI with Abu Dhabi's instant payments' system, Pardeshi remarked that "we are willing to work on similar mechanism with other member states of the Abu Dhabi Dialogue".

According to its website, the Abu Dhabi Dialogue is a "voluntary and non-binding consultative process" engaging seven countries of labour destinations – Bahrain, Kuwait, Malaysia, Oman, Qatar, Saudi Arabia, and UAE with 11 countries of labour origin, a list that includes India, Bangladesh, China, Pakistan and the Philippines among others.

New Delhi has underscored that its engagement with ADD remained an "integral part" of its policy to "promotion of safe, orderly and legal migration".
Pardeshi pointed out at the ministerial meeting that India was a prominent contributor to global migration with the world's largest diaspora.
"In the Asia-Gulf migration corridor, which accounts for 27 million foreign workers, about one-third of the migrant work force comes from India. Hence, India attaches high importance to the Abu Dhabi Dialogue," he remarked in his address.
The Indian delegation chief also urged the nations receiving Indian labour, especially blue-collar and domestic workers, to assure minimum wages to them.
"The breach of employment contract and non-payment of salaries should be looked into seriously so that migrant workers’ rights are protected and it is made sure that their capital investments for overseas employment are for their benefits," Pardeshi stated.
Dollar banknotes - Sputnik India, 1920, 13.05.2023
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