India's transformative digital public infrastructure will be central to its ambitious goal of becoming a USD 5 trillion economy, the head of a top American venture capitalist fund said on Thursday, even as she urged global policymakers and business innovators to pay attention to the country's rapid digital development.
Digital public infrastructure (DPI) refers to blocks or platforms such as digital identification, payment infrastructure and data exchange solutions that help countries deliver essential services to their people, empowering citizens and improving lives by enabling digital inclusion.
A fully operational, interconnected and robust national infrastructure of this scale and magnitude does not have a global precedent and India’s DPI success story is an outlier and first mover, Melissa Frakman, CEO and founding partner of Emphasis Ventures said. She made these comments at the Sherpas meeting of G20 member countries in Kerala's picturesque resort town of Kumarakom, where they are holding multilateral discussions on economic and developmental priorities.
“Global policymakers and business innovators alike should pay attention,” Frakman said. “As India aspires to become a $5 trillion economy in the future, and the world’s third-largest economy within a decade, its thriving DPI will be central to delivering on this economic promise and achieving these audacious goals,” she said.
India has the potential to grow at 6.5-7 per cent and become a $5 trillion economy by 2025-26 and $7 trillion by 2030, India's Chief Economic Advisor V Anantha Nageswaran has said. Frakman noted that India’s DPI is fuelling its thriving start-up ecosystem that is gearing up for a major global expansion.
Start-ups, Frakman said, have leveraged open networks for consent-based verification of identity (Aadhaar), settlement of payments United Payments Interface (UPI), sharing of financial data (Account Aggregator) and storage of documents and certificates (DigiLocker).
Built with key objectives of access, convenience, affordability and infrastructure such as UPI has propelled economic transformation and financial inclusion in the country, Frakman observed. In addition, it has been a major tailwind for tech innovation and investment into India, she said.
In January 2023, UPI had garnered transactions worth $157 billion. The volumes on this platform have grown by 50 times over the past five years. “For context, this is greater than the combined digital payments volumes of the US, UK, Germany and France and equals 55 per cent of India’s GDP,” she said.
As a precursor to the US FEDNOW, a few years back, Google wrote to the US Federal Reserve recommending a UPI-like fast, open and real-time payments settlement platform, she recalled. Google CEO, Sundar Pichai, most recently called India a "shining example" of what can be accomplished with digital development.
In February this year, India kicked off its first cross-border real-time payment system by integrating UPI with Singapore's PayNow to enable low-cost and real-time settlement of cross-border payments. “UPI is already in use or running pilots in 12+ other nations, and multiple other countries have expressed interest in the various APIs of India Stack. This opens a $500 billion global cross-border payments market, for any Indian companies building financial services on top of these rails,” she added. India's sprawling DPI also received a glowing endorsement from billionaire philanthropist Bill Gates recently as he praised the country's "great" digital network, reliable and low-cost connectivity.