Maldives President Dr Mohamed Muizzu has announced plans to introduce India’s Unified Payment Interface (UPI) to the Maldives, which will improve the ease of financial transactions not only for the locals but also the tourism industry. In his words: “On the advice of the cabinet, we aim to benefit from the significant benefits that will come with financial inclusion and enhancing the country’s digital payment system.”
This move follows the signing of an agreement during Indian External Affairs Minister S. Jaishankar’s visit in August.The island nation is continuously seeming to tilt towards India after the period of strained relations, which indicated a strategic shift in cooperation. The development of digital infrastructure seems to be part of this broader effort at building relationships.
The project will be managed by a team of representatives from the Ministry of Finance, Ministry of Homeland Security and Technology and the Maldives Monetary Authority, ensuring coordinated oversight across multiple agencies.This initiative will look beyond simplifying transactions, important in enhancing the tourist sector and boosting the economy of Maldives.
Introduction of UPI will easily allow Indian tourists to pay for things in Indian rupees by using UPI-enabled apps without undergoing the bother of changing currency. To ensure that the rollout of UPI goes without a hitch, the president has mooted that a consortium involving the banks, telecom operators, state-owned enterprises and the fintech firms plying business in the Maldives be established.
Economic Revival: Maldives Deepens Relations with India
Diplomatic and economic relations between the Maldives and India have undergone a significant transformation since President Mohamed Muizzu took office. Muizzu was recently elected on a ‘India Out’ campaign – India must leave Maldives – against which India stationed its troops on the island nation. This anti-India sentiment has triggered a backlash, with calls for Indian tourists to avoid the Maldives, further impacting the nation’s tourism-reliant economy. Tourism, a vital pillar of the Maldives economy, accounting for 30% of the nation’s GDP and generating over 60% of its foreign exchange earnings, is beginning to face challenges and feel the pressure.
Since that time, Muizzu has softened his position. Earlier this month, he made his first state visit to India in an effort to improve relations with New Delhi. Part of the diplomatic outreach, two countries agreed to exchange experience about the realization of digital and financial services implementation. This was showcased during the launch of India’s Unified Payments Interface (UPI) in the Maldives and the initiation of RuPay cards that would facilitate Indian tourists to pay within the Maldives and vice versa.
Those countries which have already initiated UPI include Greece, Sri Lanka, and Mauritius and regional initiators include Europe, Singapore and the UAE, so the Maldives will be the newest entrant into this fast-growing digital payment network.
It will once again strengthen ties for both countries and would just be the thing for improving the Maldivian economy through more monetary cooperation, tourism and digital public infrastructure. The introduction of UPI and RuPay cards to the Maldives will significantly improve the ease of transactions for Indian tourists and will pave the way for further economic ties.
As Muizzu works to strengthen the Maldives economy, especially focusing on the tourism sector through improved digital infrastructure, it shows a clear move towards closer cooperation with India in both economic and geopolitical matters.
