India plots digital diplomacy push during G20 presidency

India plans to use its presidency of the G20 forum this year to champion its homegrown digital services sector, and is in talks with other countries to export initiatives such as its payments system overseas, officials said.

Amitabh Kant, India’s G20 emissary, told the Financial Times that the country, which styles itself as a leader for the developing world, would make “special presentations” about its digital infrastructure at gatherings of finance ministers, IT ministers and other meetings this year.

Through a scheme of digital infrastructure dubbed the “India Stack”, Indian authorities and businesses are rolling out services from health insurance to ecommerce to its 1.4bn citizens. While many remain in the early stages, some initiatives, such as its Unified Payments Interface money-transfer system, have taken off, with billions of transactions a month.

Officials said that as part of this digital diplomacy campaign, the Reserve Bank of India and National Payments Corporation of India, a state-backed company that runs UPI, had approached other nations about making their payments systems “interoperable” with the technology.

The immediate aim of such efforts is to facilitate cross-border transactions for Indians overseas, which will boost the domestic economy by easing the flow of remittances and commerce with the large Indian diaspora.

But Dilip Asbe, NPCI chief executive, said India also wanted to license its systems to developing countries, such as in Asia and Africa, for their own domestic use. The disruption caused by the coronavirus pandemic had highlighted the importance of “efficient and self-sufficient domestic digital payment infrastructure”, Asbe said.

Countries including Singapore, the United Arab Emirates and Nepal are already adopting elements of India’s payments infrastructure. One official said India was also approaching about 10 other countries that are home to large Indian diasporas, including the US, UK, Australia, Canada, Hong Kong, Saudi Arabia, Qatar and Oman.

India took over the presidency of the G20 from Indonesia last year. Using the prominence of the position to promote the India Stack is an important element of Prime Minister Narendra Modi’s soft-power push, as New Delhi seeks to present itself as a democratic, business-friendly counterweight to China.

“Most innovations come from the developed part of the world — they have emerged from Google, Facebook, Microsoft, they have emerged from Tencent and Alibaba,” Kant said, arguing that India’s digital infrastructure was an inclusive template and could serve as an alternative.

“This innovation has come from an emerging market and this has ensured that there is a public platform,” he added, calling it “a way of transforming the lives of citizens”.

“It’s not about making money,” Kant said.

The India Stack consists of some layers that establish digital identity and others that provide financial and data services. This includes the country’s 13-year-old digital ID scheme Aadhaar, which is linked to an individual’s biometrics, as well as schemes such as UPI, which was launched in 2016.

The networks are “interoperable”, meaning private companies and public service providers can piggyback on them to offer everything from bank loans to online courses. India used this infrastructure to manage Covid-19 vaccinations and certificates.

But Satish Meena, an independent tech analyst, said the adoption of such interlinked networks was “not organic”.

“It goes from top to bottom,” he said. “The government and regulator has to push the product to the public.”

He added that India’s scale could make this an attractive option overseas. “Earlier, you had small pilots. But now these are big enough projects across the population — income, education and age group — that it can work.”

Initiatives such as Aadhaar have proved controversial, with privacy advocates arguing that they give authorities and companies excessive data-collection powers without enough oversight. India does not have a data protection law, but recently introduced a revised draft that would curb how companies can use personal data.

Leaders of the G20 nations will meet in New Delhi in September, at a time when a third of the world’s economies are projected to go into recession, Russia’s war on Ukraine continues unabated and countries are struggling with a global debt crisis.

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