India explores currency and UPI partnership with Indonesia for enhanced trade relations
Gandhinagar, July 17: India and Indonesia are planning to establish a currency and digital payment deal, following in the footsteps of a similar arrangement with the United Arab Emirates. The move aims to enhance bilateral trade by promoting the use of Unified Payments Interface (UPI) and other digital payment tools.
The decision was made during a meeting between Indian Finance Minister Nirmala Sitharaman and her Indonesian counterpart Sri Mulyani Indrawati, where the launch of an "Economic and Financial Dialogue" was announced to strengthen trade and investment relations.
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Both countries will explore cooperation in digital technology and payment systems under central banks, with a focus on using local currencies. Indian exporters may settle their trade in Indonesian rupiah, while those exporting commodities like palm oil could receive payments in Indian rupees. Indonesia is India's largest trading partner in the Association of Southeast Asian Nations (ASEAN) region and holds a prominent position among Asian economies.
In 2020, bilateral trade between India and Indonesia amounted to approximately $39 billion, with India enjoying a trade surplus of $19 billion, primarily driven by significant shipments of palm oil and petroleum products. Refined petroleum products constituted India's largest export item to Indonesia.
The Indian official stated that there is considerable interest in India's digital public infrastructure from various countries, and Indonesia could be among those countries that benefit from India's expertise in this area.
Finance Minister Sitharaman emphasised that areas of cooperation between India and Indonesia encompass bilateral investment, financial services, and infrastructure development. India, having developed extensive experience in digital public infrastructure, is capable of offering proven solutions for convenient and affordable digital payments, thus supporting Indonesia in its pursuit of financial inclusion goals.
- With inputs from agencies
