India has extraordinarily embraced digital initiatives and the challenge for the country is to make sure that the supportive policy frameworks are aligned with the opportunities, said John Denton, secretary general of the International Chamber of Commerce and a founding member of Business 20.
"India should be clear that the global world sees this country as an important market. Also, it's an important source of opportunity," Denton said in an exclusive interview with Moneycontrol. The B20 represents the G20 business community.
Praising India's Unified Payments Interface (UPI), a platform that enables seamless transfer of funds between bank accounts, Denton said the way it has been made available at almost no cost is extraordinary.
"I think that's how the world is seeing India now. The challenge for India, of course, is to live up to that expectation," he said. "UPI is an opportunity to create a network advantage on a global basis."
Digital transition
The digital economy will contribute more than 20 percent of the country's GDP in 2026, Minister of State for Electronics and Information Technology Rajeev Chandrasekhar said at the G20 Digital Innovation Alliance Summit in Bengaluru recently.
"The digital economy has gone from 4-4.5 percent in 2014 of the total GDP to 11 percent of the total GDP today. And we expect the digital economy to contribute over 20 percent of our GDP by 2026," Chandrasekhar said.
According to him, India adopted technology to deliver solutions transforming people's lives, governance and democracy.
"We are now looking at every citizen, every consumer consuming digital products or services, whether it is Instagram reels or Digital Public Infrastructure that connect them to the government and governance, or using the cloud and all of the upstream and downstream impacts that are created by this space and trend of digitalisation," the minister said.
In July, the number of UPI transactions hit 996 crore and the value of the transactions crossed Rs 15 lakh crore. This is more than 10 times what credit cards achieved in over 30 years.
The National Payments Corporation of India (NPCI), which operates retail payments and settlement systems including UPI, is targeting 100 crore transactions a day, a milestone that may be only a couple of years away at the current annual growth rate of over 40 percent.
UPI is expected to account for 90 percent of retail digital transaction volumes in the next five years, growing from 75.6 percent in FY23, the Reserve Bank of India (RBI) said in a bulletin on June 23. The bulletin is a monthly publication that offers insights into developments in domestic and global economies and contains articles that don’t represent the views of the central bank.
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