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reported by: Abhishek Jha
Last updated: July 21, 2023, at 21:00 IST
Prime Minister Narendra Modi (R) with Sri Lankan President Ranil Wickremesinghe in New Delhi on Friday. (Twitter)
India and Sri Lanka have also agreed to set the Indian rupee (INR) as the currency for trade settlements. Apart from the tourism push, Modi-Wickremesinghe also agreed to establish a land connection to the ports of Trincomalee and Colombo.
In a bid to promote seamless cross-border transactions, India and Sri Lanka have signed an agreement to launch the Unified Payments Interface (UPI) in Sri Lanka. The agreement was reached during a bilateral meeting between Sri Lankan President Ranil Wickremesinghe and Prime Minister Narendra Modi in Delhi on Friday.
The India-Sri Lanka Economic Partnership Vision Statement highlighted the two countries’ commitment to promoting digital payments and further enhancing trade and transactions between businesses and individuals. The UPI system is known for its efficiency and low-cost money transfers, which makes it an attractive option for cross-border transactions.
Briefing the media on the outcome of the bilateral meeting, Foreign Minister Vinay Quatra stated that the UPI payment system will be operational within two to three months.
He also clarified that the digital payment system will not be limited to the government app BHIM UPI for payment, as private payment platforms will also be allowed to operate in Sri Lanka.
UPI appeal
UPI has gained worldwide appeal for its ease of use and cost-effectiveness in facilitating international transactions. Several countries, including Singapore, Malaysia, UAE, France, BENELUX countries, Nepal and the United Kingdom, have already adopted UPI payments, recognizing the potential to revolutionize cross-border financial transactions.
India and Sri Lanka have also agreed to designate the Indian rupee (INR) as the currency for trade settlements between the two countries. This step is expected to enhance trade and economic relations between the two countries, simplify financial transactions and promote increased economic cooperation.
Last week, at the Indian CEO Forum in Colombo, Wickremesinghe noted Sri Lanka’s openness to accepting the Indian currency as the common currency in the island nation. “It will make no difference to us if India (the Indian rupee) becomes a common currency. We will have to figure out how to do that. We must become more open to the outside world,” he said. “The world is developing and India is developing rapidly, especially under the leadership of Prime Minister Modi.
Happy to welcome President Wickremesinghe. I congratulate him on completing a year in office and working with great courage for the progress of Sri Lanka. Sri Lanka is key to our “Neighborhood First” and “SAGAR” efforts, and therefore, we discussed ways to deepen bilateral relations. @tweet pic.twitter.com/Dz3A8j4BPgNarendra Modi (@narendramodi) July 21, 2023
Pay to tourism
The two sides also pledged to promote the Indian Buddhist circle, Ramayana path and ancient places of religious worship in Sri Lanka to boost tourism. Sri Lanka’s hospitality industry is struggling to recover from the effects of the COVID-19 pandemic and the political and economic turmoil of the past year.
India is the second largest source of tourists for Sri Lanka and the island aims to attract two million Indian tourists this year. Direct flights between Chennai-Jaffna and Colombo-Mumbai were opened last year, facilitating the growth of tourism and business activities between the two countries.
The successful implementation of UPI in Sri Lanka aims to make the lives of Indian tourists easier while increasing cross-border transactions and remittances, promoting economic growth and cooperation.
Modi Wickremesinghe also agreed to establish a land link between Sri Lanka and India to develop land access to the ports of Trincomalee and Colombo. A feasibility study for such a connection will be conducted at an early date. The two sides will also work for the resumption of passenger ferry services between Nagapattinam in India and Kankesanthurai in Sri Lanka and work towards early resumption of ferry services between Rameshwaram and Talaimannar, and other mutually agreed places.
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