Author : Anirban Sarma

Expert Speak Raisina Debates
Published on Nov 09, 2023 Updated 0 Hours ago

India’s digital public infrastructure (DPI) model is a key offering to the world and is being considered, adopted or adapted by nations at varying stages of development

home and the world indias dpi proposition

At the outset of its G20 presidency, India announced that promoting “technological transformation and digital public infrastructure (DPI)” would be one of the six key priorities of its tenure. In particular, India asserted that it would advocate for a “human-centric approach to technology”, and “facilitate greater knowledge-sharing” in interlinked thematic areas such as “DPI, financial inclusion, and tech-enabled development”.

As the leader of the G20 in 2023, India has been able to raise an extraordinary level of awareness about DPI among countries of the Global North and South, through the interventions of the G20 Digital Economy Working Group, the new high-level Task Force on DPI for Economic Transformation, Financial Inclusion and Development, and several G20 Engagement Groups. Today, the DPI model has emerged as a key Indian offering to the world and is being considered, adopted or adapted by nations at varying stages of development.

Transforming India

As foundational population-scale tech systems, DPIs enable the flow of individuals (through digital identity systems), money (through real-time swift payment systems), and information (through consent-based, privacy-protecting, data-sharing systems). The pioneering, integrated architecture of India Stack helped India become the first nation to develop all three foundational DPIsthe Aadhaar unique identity, the Unified Payments Interface (UPI), and the Data Empowerment and Protection Architecture (DEPA).

[pullquote]As the leader of the G20 in 2023, India has been able to raise an extraordinary level of awareness about DPI among countries of the Global North and South, through the interventions of the G20 Digital Economy Working Group, the new high-level Task Force on DPI for Economic Transformation, Financial Inclusion and Development, and several G20 Engagement Groups.[/pullquote]

Taken together, these three layers have revolutionised public service delivery and democratised innovation on a scale never seen before. Today, Aadhaar is used by over 99.9 percent of Indian adults to utilise public services; Indians use UPI to make 30 million transactions every day; and the DEPA is changing the national credit landscape. Importantly, DPIs are also driving public and private innovation by allowing the government and businesses to design new applications atop the DPI layers; and the open principles embedded in DPIs are helping create open networks in the domains of health, credit, and commerce. 

Going global 

Given their low cost and inherent scalability, there is much interest among other nations to explore the establishment of DPIs. The Indian presidency has been able to leverage this burgeoning interest and shape it into concrete outcomes, or at the very least into diplomatic declarations that formally recognise DPIs’ power and potential.

In May 2023, for instance, the European Union-India Trade and Technology Council acknowledged “the importance of DPI for the development of open and inclusive digital economies”, and stated that the DPI approach helps “promote inclusive development and competitive markets and accelerates progress for achieving the 2030 Agenda”. The EU and India have formally agreed to collaborate on improving the interoperability of their respective DPIs and use that as a basis for promoting secure privacy-preserving solutions for the benefit of developing countries. Released in the same month, the Quad Leaders’ Statement also drew attention to the “transformative power of […] DPI to support sustainable development in the Indo-Pacific and deliver economic and social benefits”.

[pullquote]The EU and India have formally agreed to collaborate on improving the interoperability of their respective DPIs and use that as a basis for promoting secure privacy-preserving solutions for the benefit of developing countries.[/pullquote]

The progress of DPI-focused bilateral engagements has also been impressive. For instance, following Prime Minister Modi’s state visit to the United States (US) in June, a US-India Joint Statement conveyed that both countries intended to work together to “provide global leadership for the implementation of DPI”. The US and India would explore how to align efforts to advance the creation and deployment of robust DPIs in developing nations through a US-India Global Digital Development Partnership. Similarly, the meeting of the Indian and Japanese foreign ministers in July included a forward-looking focus on collaborating to strengthen DPI as part of tech partnerships to build a strong and open Indo-Pacific.

During PM Modi’s visit to France, the two countries signed an agreement to make UPI available in France, to enable seamless cross-border transactions and lower the cost of remittance payments and fund transfers. This made France the latest in a series of nations with whom India has UPI-related bilateral agreements. These include Singapore, Australia, the US, the United Kingdom (UK), Canada, Hong Kong, Oman, Qatar, the United Arab Emirates (UAE), Saudi Arabia, Nepal and Bhutan. Since early 2023, Japan too has been assessing the possibility of adopting India’s UPI system.

The core value of DPI for developing nations, and as an accelerator of the SDGs, is now widely recognized. India’s Modular Open Source Identity Platform (MOSIP) was set up in 2018 to support countries seeking to build foundational digital identity systems. Today, nine developing countries have partnered with India through MOSIP, and are drawing on Indian expertise to build their national ID platforms, further consolidating the status of DPI as a global digital public good. Finally, during its G20 presidency, India has entered into Memorandums of Understanding (MoUs) with eight developing countries, under which India will offer them access to its India Stack architecture and DPI infrastructure at no cost.

[pullquote]Since early 2023, Japan too has been assessing the possibility of adopting India’s UPI system.[/pullquote]

Multilateral endorsements 

The United Nations has endorsed the DPI approach, emphasising its ability to “unlock innovation and value at scale” and to “create exponential societal outcomes”. At a recent international seminar on DPI, both the International Monetary Fund (IMF) and the World Bank expressed their unqualified support for DPI.

The IMF points out that India Stack has not simply transformed India’s digital landscape, but also offers lessons for digital transformation worldwide. In particular, the IMF paper Stacking up the Benefits: Lessons from India’s Digital Journey commended DPIs for enabling direct benefit transfers, promoting financial inclusion, and supporting 87 percent of India’s poor households during the COVID-19 pandemic. In a similar vein, a recent World Bank report presented to the G20, argued that India Stack has helped the country achieve 80 percent financial inclusion in the last six years—a feat that may have taken 50 years without DPI.

Quite apart from the merits of DPIs themselves, the support of multilateral development banks (MDBs) for DPIs could also partly be strategic, at a time when there is a consensus that multilateralism must be reformed and that MDBs must be reinvigorated to address a broader range of development challenges more efficiently. The clear and quick success of DPI in India—and also in countries like Estonia, Sri Lanka, and Togo—makes it an attractive area for allocating resources. Indeed, MDBs’ decision to support DPIs could contribute to the larger process of restoring MDBs’ self-credibility. Besides, these resource allocations would reinforce other DPI-specific proposals agreed on by the G20; and as several of the foregoing examples have shown, there is already a proven interest among a number of other countries to adopt DPI. Finally, supporting DPIs is not new for institutions like the World Bank. Indeed, the latter has operated the ID4D (Identity for Development) programme since 2014, helping close to 40 developing countries build foundational ID systems.

Outcomes at the G20: What lies ahead? 

The Indian presidency culminated in four major DPI-related outcomes. First, G20 member states were able to achieve consensus around a shared description and understanding of DPI and to agree that addressing issues around DPI governance would be crucial. Second, the Group adopted a high-level “G20 Framework for Systems of DPI” outlining principles for the design, development, and deployment of DPIs. This framework is likely to prove valuable for countries that are planning to implement or are in the process of building their DPI ecosystems. Third, a consensus has been forged on the need for increased and coordinated funding to develop DPIs in low- and middle-income countries. Fourth, taking cognizance of the information gaps surrounding DPI, the G20 welcomed India’s proposal for setting up a virtual Global DPI Repository to host DPI-focused tools, resources, practices and experiences from around the world.

[pullquote]This framework is likely to prove valuable for countries that are planning to implement or are in the process of building their DPI ecosystems.[/pullquote]

Building on the momentum generated at the G20, it will be important to understand more closely what different countries would like to do—or in several cases, are already doing—in the DPI space, and to provide them necessary support and assistance. This is a process where India could take the lead, given its legacy of cooperation and knowledge-sharing through MOSIP, and more recently through its MOUs with developing countries. Moreover, as experts have pointed out, despite the common understanding of DPI achieved at the G20, there is a need to theorise DPI further, and to devise frameworks and models for assessing what does or doesn’t qualify as DPI. These frameworks could subsequently help shape the formulation of laws governing such infrastructures, which will increasingly be required to build trust and offer certitude to businesses and innovators about the reliability of DPIs.

Finally, the smart use of DPIs also has implications for countries’ AI development efforts. Large volumes of data are a critical component of DPIs, and they could be an asset for training AI models, provided that the principles of data privacy, security, and confidentiality are firmly upheld. As part of DEPA 2.0, for example, India is already experimenting with a solution called “Confidential Computing Rooms” which are “hardware-protected secure computing environments where sensitive data can be accessed in an algorithmically controlled manner for model training”. Such environments allow data to be used in compliance with privacy and security guarantees for citizens. As more countries begin to adopt these approaches, DPI could emerge as an enabler of AI-based solutions as well.


Anirban Sarma is a Senior Fellow and Deputy Director at Observer Research Foundation 

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Author

Anirban Sarma

Anirban Sarma

Anirban Sarma is Deputy Director of ORF Kolkata and a Senior Fellow at ORF’s Centre for New Economic Diplomacy. He is also Chair of the ...

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