A significant step has been taken by India and Maldives for strengthening their economic partnership by signing an agreement for introducing  the Unified Payments Interface (UPI) in the Maldives.

According to statement of India's External Affairs Minister S. Jaishankar, the initiative is expected to have a "very positive" impact on the archipelago nation's tourism sector.

A Memorandum of Understanding was signed during Jaishannkar’s three day visit to Maldives and it marked a significant impact and marked a new chapter in the bilateral relationship between the two countries.

UPI is a new advanced payment system developed by National Payments Corporation of India (NPCI) which allows an instant real-time payment system that facilitates inter-bank transactions through mobile phones.

During the press conference, Jaishankar along with Maldivian foreign Minister Moosa Zameer, stressed on the fact that, UPI has "revolutionized digital transactions" in India.

He also expressed that the system has dynamically advanced financial inclusion in India, with 40% of the world’s real-time digital payments now taking place in the country. This new addition of UPI in one of most luxurious tourist destination Maldives is expected to bring similar benefits, making financial transactions more accessible and efficient.

Maldives is massively influenced by tourism and hospitality industry. Tourism is a crucial pillar of the Maldivian economy, contributing nearly 30% to its GDP and generating over 60% of its foreign exchange earnings.

The implementation of UPI is expected to significantly benefit the tourism industry by streamlining payment processes for both local and international visitors.

Jaishankar expressed hope that the first UPI transaction in the Maldives will occur soon, improving the tourist experience and bolstering the sector's growth.