Can export of digital infrastructure buy India strategic influence?

India's Unified Payments Interface (UPI) has become a platform for digital infrastructure diplomacy since its inception over a decade ago. The country has signed memorandums of understanding with 24 countries to help them adopt its Digital Public Infrastructure (DPI) under the framework called India Stack. The initiative has now transitioned from a demonstration phase to a consequential one, with a threefold question at its core: what India gains from this architecture, what it demands in exchange, and how its success can be measured.

The architecture has been shared with countries across four continents at no cost, transforming a payments system into a tool of foreign policy. The three potential returns for India include remittances, trade, and strategic gains.

Remittances are a crucial aspect of India's foreign earnings, with an estimated USD 129 billion received in 2024 and a record USD 135.46 billion recorded in the last financial year from around 18.5 million Indians residing abroad. By integrating its system with large diaspora corridors, India has not only offered cheaper transfer options but also secured this advantage through digital infrastructure diplomacy.

The strategic gains from sharing its digital infrastructure architecture extend beyond remittances and trade. India aims to become a norm-setter through the G20, a shared DPI repository, and Project Nexus' common technical standard. This approach moves India from being merely a user of digital systems to setting the norms for them, creating a compounding advantage that could endure for decades.

Additionally, this model positions India as a reference model for the Global South, distinct from the American and Chinese approaches, which involve private platforms built around fees and data, as well as China's approach of exporting bundled technology with state control.