According to the Minister of Economic Development and Trade of the Maldives, a popular Indian Ocean luxury tourism destination is preparing to introduce India’s RuPay card payment service. RuPay cards will soon be accepted for transactions in Indian rupees within the Maldives. The government official did not specify the exact launch date for this initiative though.
The decision to adopt India’s RuPay is expected to strengthen the local currency of the archipelago nation, which relies heavily on tourism.
RuPay serves as India’s domestic payment card network, similar to Visa and MasterCard. Established by the National Payments Corporation of India (NPCI) in 2012, NPCI has additionally created the Unified Payments Interface (UPI), a swift payment system enabling seamless fund transfers between bank accounts.
In the last couple of years, India has extended these services globally – mainly in nations that have a high volume of remittances sent back to India, including Bhutan, Nepal, Mauritius, Singapore, and the UAE. Sri Lanka and France have also independently implemented the UPI.
In August 2022, during a visit to India by former Maldivian President Ibrahim Mohamed Solih, discussions were held between the Maldives and India regarding the implementation of RuPay cards in the island nation. This initiative aimed to enhance travel, tourism, and economic ties between the two countries.
Indians have historically been the primary group of foreign tourists visiting the Maldives. Nevertheless, their numbers significantly decreased this year due to boycott calls stemming from remarks made by certain Maldivian ministers about the Prime Minister of India, Narendra Modi, which were perceived as offensive by India.
The event was apparently a port of a broader dispute as the Maldives, currently under the leadership of President Mohamed Muizzu, who is perceived as pro-Beijing, has been shifting its focus away from India. Shortly after assuming office last year, Muizzu requested Indian government to withdraw approximately 80 military personnel who were stationed on the islands to operate aircraft provided by India. By mid-May, Indian troops were pulled out and replaced by non-military personnel.
Nevertheless, while on a recent trip to New Delhi, Maldives Foreign Minister conveyed gratitude for India’s assistance in “enhancing economic, trade, and investment relations between the two countries.” This trip occurred shortly after India granted its largest export quotas for essential goods, such as eggs, potatoes, onions, sugar, rice, wheat flour, pulses, river sand, and stone aggregates, to the Maldives through a special bilateral arrangement.
Indian infrastructure projects in the Maldives are progressing steadily despite the diplomatic challenges, as per a report by Reuters referencing Indian officials. In the last fiscal year ending in March, India allocated approximately 7.7 billion rupees ($93 million) towards infrastructure development in the Maldives. Among these initiatives is a significant project valued at $500 million for the construction of roads and bridges in and around the capital city of Malé. Additionally, two airports, each costing nearly $130 million, are being constructed on the remote islands of the archipelago with financial support from India in the form of a line of credit.
(eTN): Desperate for Tourists Maldives Adopts India’s RuPay System | re-post license | post content
