By 2021, India had issued over 1.3 billion digital identity cards through its Aadhaar platform and over 1.1 billion digital vaccine certificates through its CoWin platform. Recently, India’s Unified Payments Interface (UPI) crossed the $1 trillion mark in transaction value after registering 5 billion transactions in a month for the first time in March 2022.
What makes these numbers alive is the sheer speed at which this scale has been achieved. And while this digitization journey began in 2010 with Aadhaar to empower Indian citizens, in recent times India has found that its in-house digital solutions can be used not only to further its own growth agenda , but may also support its wider diplomatic efforts.
Aadhaar’s open structure that allows for scalability and vendor neutrality has already led many countries to approach India to either replicate the model or to develop their own digital ID system to focus on its technology Can you The most recent development on this front includes a grant to Sri Lanka to implement a Digital ID program based on Aadhaar.
Similarly, the National Payments Corporation of India (NPCI), the developer of UPI, is providing technical assistance to several countries through licensing and consultancy arrangements with the aim of setting up a real-time e-payment system. This is being done to help both set up their own systems as well as integrate UPI with international payments infrastructure. So far, Bhutan has adopted UPI standards for its Quick Response (QR) deployment and Nepal has fully deployed the UPI platform, becoming the first country outside India to do so, and the Reserve Bank of India and Singapore The Monetary Authority of India has announced a project. To link your respective fast payment systems, UPI and PayNow. In April, BHIM UPI went live across the UAE.
These recent collaborations point to India’s commitment to fostering ecosystem efforts to build and strengthen its digital diplomacy. There are two major factors that have enabled India to emerge as a leader in this field.
First, India’s IT sector continues to be a key driver of economic growth, with an estimated value of over $150 billion and an employer of around 4.5 million people. In fact, India’s talent pool in the ICT ecosystem is also increasingly participating in the development and maintenance of India’s digital infrastructure. For example, the Digital Infrastructure for Vaccination Open Credentialing (DIVOC), an open-source vaccine management platform created by the eGov Foundation of India, a private group of technologists, has been benefited by countries including Jamaica, Sri Lanka, Indonesia and has been raised. Philippines, to streamline its COVID vaccination programmes.
Second, India’s strong political will and thoughtful policy making have been instrumental in providing high-level direction to the efforts of the ecosystem. For example, the Ministry of Electronics and Information Technology’s decision to encourage the use of open technology through adoption of open source software, policy on open API, policy for open standards, etc. has helped. An example of the benefits of such technology is the use of Open APIs to leverage the Aadhaar database for the provision of services like eKYC, DigiSign, etc.
The government has also recognized the importance of involving diverse stakeholders in the initial decision making for building such digital infrastructure. This is important as these are parts of a highly technological ecosystem and thus require specialized governance that goes beyond traditional bureaucratic expertise. A prime example of this is the creation of an Open Network for Digital Commerce (ONDC) Council, which includes experts from the worlds of bureaucracy and finance, retail trade, coding and more. Once activated, ONDC will allow various e-commerce entities to showcase their products/services on a common platform, thus allowing greater competition in e-commerce.
The government’s recognition of the importance of digital public goods-led diplomacy also highlights the important role these tools play in an emerging new world order. For example, in the light of rising global risks, building such infrastructure in areas critical to the functioning of the global economy would increase India’s resilience and expand its strategic advantage. That is why a parliamentary panel last December proposed that India create an alternative to the SWIFT network (which was used for economic sanctions on Russia).
Furthermore, the creation of indigenous digital solutions that can create inter-operable systems between jurisdictions and potentially reduce compliance and transaction costs, can gain global goodwill for India. For example, Estonia’s X-Road open software ecosystem, which has enabled cross-border data exchange with Finland, is a marker in global standards setting and has helped Estonia gain soft power in technology.
As the world navigates a new wave of geopolitical tensions, the need to build resilience while fostering new forms of cooperation has become more relevant than ever. In this new context, India’s progress in laying out its digital ‘Belt and Road’ network is remarkable. Well taken advantage of, it can take us very far.
Dipro Guha and Aishwarya Viswanathan are, respectively, a Manager and an Analyst at The Quantum Hub, New Delhi.