India’s role in digital democracy: UPI in France

This deal in France ... underlines India’s growing stature as a provider of global tech goods, and as a leader in the process of digital democracy.

It is rare for columnists to see their predictions come true quickly. Therefore, it was, for me, thrilling to see the announcement that UPI or the United Payments Interface of India (along with the RuPay card) will soon be accepted in France.

It came only days after my last column in this newspaper which was about India’s leadership in ‘digital democracy’ or practices and norms in democracies using digital technologies and techniques.

"There is little doubt that India’s UPI provides a public tech architecture, upon which all private platforms and apps providing digital financial transactions and other related activities are placed, is a democratising force. Rupay is a global card payment network, allied in a sense with UPI, which is now accepted in countries like Bhutan, Nepal, Singapore – and soon also in France."

The European nation would be the first major developed economy to embrace the UPI-Rupay system. This will come about via an understanding between the National Payments Corporation of India (NPCI) and French payments services provider Lyra.

This is a breakthrough for the Indian digital payment and fintech industry. It in essence validates the Indian perspective on not only the importance building public infrastructure but also the need for alternative systems that can work around the world.

The SWIFT system (based in Belgium) is the pre-dominant global digital transaction platform but the war in Ukraine has underlined its political economy challenges and limitations.

The need for other systems that can work concurrently with SWIFT, systems that have been built, and operate, under democratic governance.

This essay argues that this is just the beginning of the creation of such alternatives as countries look for backups and tighten supply chains. And India is best placed to provide such goods and technologies.

The use and acceptability of UPI in France is one of the first examples of the mass adoption of technological solutions from India in the West which has mostly been seen as the provider rather than the recipient of technological advancement.

But increasingly the kind of technological and digital architecture the world needs cannot be provided by private companies alone – which was and is, in a sense, the American model.

They must be built through public-private partnerships and governed through public mechanisms so that they are not used merely for private profit. Such infrastructure must be the backbone upon which all private enterprise can function.

This kind of infrastructure also needs public maintenance and control, in a sense, so that no one company, or companies, can affect or impact its neutral functioning. This is not infrastructure built for the profit motive but to ensure a level-playing field in the entire market.

Now building such infrastructure that can be used across countries needs built-in complexity and scale. India and China are the only two countries that have these attributes and concerns on privacy and authoritarianism makes such tech from China not easily acceptable in many parts of the world.

The option that can best deliver this, then, is India. It has both the scale and the complexity. And it is demonstrating that it can build technology that can be adopted and used across borders without the concern of private interests hijacking the process and profits.

This is a new kind of bridge that is being built between countries – a kind of deeper digital cooperation which is much more fundamental than efforts at digital diplomacy using communication tools like Twitter.

This deal in France, therefore, in my mind, underlines India’s growing stature as a provider of global tech goods, and as a leader in the process of digital democracy. This deal showcases that India’s ‘public tech’ is relevant not just for developing countries or countries of relatively small size, but it can be equally useful for, and in, major economies.

To be sure, this is still a nascent process. But I would like to argue that the importance of this will grow exponentially. For instance, as more and more countries see the benefits of digital financial transactions, they shall seek such solutions and India will be there to provide this while ensuring security under democratic supervision.

India’s leadership in this is likely to grow.