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India’s e-belt-and-road initiative for digital diplomacy

Aadhaar’s open architecture that allows for scalability and vendor neutrality has already had several countries approaching India to either replicate the model or take note of its technology to develop their own digital ID systemsPremium
Aadhaar’s open architecture that allows for scalability and vendor neutrality has already had several countries approaching India to either replicate the model or take note of its technology to develop their own digital ID systems

  • As of 2021, India had issued more than 1.3 billion digital identity cards via its Aadhaar platform and over 1.1 billion digital vaccine certificates through its CoWin platform

As of 2021, India had issued more than 1.3 billion digital identity cards via its Aadhaar platform and over 1.1 billion digital vaccine certificates through its CoWin platform. More recently, India’s Unified Payments Interface (UPI) crossed the $1-trillion mark in transaction value after it recorded 5 billion transactions in a month for the first time in March 2022.

What makes these numbers come 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 discovered that its homegrown digital solutions can not only be leveraged to further its own development agenda, but also support its wider diplomatic efforts.

Aadhaar’s open architecture that allows for scalability and vendor neutrality has already had several countries approaching India to either replicate the model or take note of its technology to develop their own digital ID systems. The most recent development on this front includes a grant to Sri Lanka to implement a digital ID programme modelled on Aadhaar.

In a similar vein, India’s National Payments Corporation of India (NPCI), the developer of UPI, is providing technological assistance to many countries through licensing and consultancy arrangements aimed at setting up real-time e-payment systems. This is being done to both help them establish their own systems and also integrate UPI with the 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 Monetary Authority of Singapore have announced a project to link their respective fast payment systems, UPI and PayNow. In April, BHIM UPI went live across the UAE.

These recent collaborations hint at India’s commitment to nurturing ecosystem efforts to build and strengthen its digital diplomacy. There are two key factors that have enabled India to emerge as a leader in this field.

First, India’s IT sector, with an estimated value of over $150 billion and an employer of nearly 4.5 million people, has consistently remained a key driver of economic growth. 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 instance, the Digital Infrastructure for Vaccination Open Credentialing (DIVOC), an open-source vaccine management platform created by a private collective of technologists, eGov Foundation of India, has been leveraged by other nations, including Jamaica, Sri Lanka, Indonesia and the Philippines, to streamline their covid vaccination programmes.

Second, India’s strong political will and deliberative policymaking has been crucial in providing high-level direction to steer ecosystem efforts. For instance, the ministry of electronics and information technology’s decision to incentivize the use of open technology, through the Policy on Adoption of Open Source Software, Policy on Open APIs, Policy for Open Standards, etc, has helped create digital public goods and infrastructure. 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 including diverse stakeholders in the initial decision-making for building such digital infrastructure. This is crucial as these are parts of highly technical ecosystems and thus require specialized administration that goes beyond traditional bureaucratic expertise. A prime example of this is the creation of an Open Network for Digital Commerce (ONDC) Council, which comprises experts from the bureaucracy and worlds of finance, retail trade, coding and others. 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 key role these instruments could play in an emerging new world order. For example, in the light of growing global risks, the creation of such infrastructure in areas critical to the functioning of the global economy will increase India’s resilience and extend its strategic advantage. This is why a parliamentary panel last December proposed that India build an alternative to the SWIFT network (which was used for economic sanctions on Russia).

Furthermore, building indigenous digital solutions that can create interoperable systems between jurisdictions and potentially reduce compliance and transaction costs could garner 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 standard setting and has helped Estonia acquire soft power in technology.

As the world navigates a new wave of geopolitical tensions, the need for building resilience while fostering new forms of cooperation has become more relevant than ever. In this new context, India’s advances in laying out its own digital ‘belt and road’ network have been noteworthy. Leveraged well, it could take us far.

Deepro Guha and Aishwarya Viswanathan are, respectively, a manager and an analyst at The Quantum Hub, New Delhi.

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