UPI has emerged as a model for other countries in digital payments. Analyse India's digital public goods diplomacy in this context.

Q. UPI has emerged as a model for other countries in digital payments. Analyse India's digital public goods diplomacy in this context. (15 marks, 250 words)

The Unified Payments Interface (UPI), launched by NPCI in 2016 under the Payment and Settlement Systems Act, 2007, has grown into the world's largest real-time payments platform — 55.49 crore users and ₹314.23 lakh crore in FY 2025-26 [1][2]. As open-source Digital Public Infrastructure (DPI), it now anchors India's diplomacy of exporting digital public goods.

Why UPI is a global model - Scale and interoperability: handles ~50% of global real-time digital payments and 85% of India's digital transactions on an open, API-driven architecture [2]. - Inclusion at low cost: expansion from 44 to 703 live banks deepened reach to cooperative and small finance banks, aiding the JAM-linked inclusion push [2]. - Public-good design: not a proprietary product but shareable infrastructure, replicable by resource-constrained economies.

Dimensions of India's DPG diplomacy - Soft power: UPI featured in India's G20 presidency as the flagship DPI/India Stack narrative, positioning India as a norm-setter. - Cross-border linkages: bilateral tie-ups (e.g. UPI–Singapore) project the rail into remittance corridors. - Strategic autonomy: an indigenous rail reduces dependence on foreign card networks.

Challenges - Rising fraud, prompting risk-based limits and the CUISF 2025 security framework [1]. - Data-protection and interoperability concerns in partner jurisdictions. - Near-zero-MDR pricing raises questions of long-term financial sustainability.

UPI shows how public-interest technology can double as strategic capital. Sustained through robust security, viable pricing, and equitable partnerships, India's DPG diplomacy can advance an inclusive, SDG-aligned global digital order.

(~248 words)

Sources: 1. Nearly 55.49 Crore Users Onboarded on UPI as in June 2026 — PIB — user count, FY 2025-26 value, security frameworks (risk-based limits, CUISF 2025) 2. UPI completes 10 years, Emerges as World's Largest Real-Time Payments Platform — PIB — launch/legal basis, ~50% global and 85% domestic share, 703 live banks