India’s DPI : Orchestrating a Digital Transformation

India’s Digital Public Infrastructure (DPI) has propelled the nation into a global economic powerhouse, poised to become the world’s third-largest economy by 2027. Spearheaded by innovative platforms like Aadhaar and UPI, India’s DPI has not only revolutionized digital governance but has also set a benchmark for inclusivity and efficiency.

At the forefront of India’s G20 presidency, DPI secured historic consensus among the world’s largest economies, defining its characteristics and showcasing India’s leadership in digital innovation. The launch of the Global DPI Repository and the Social Impact Fund further underscored India’s commitment to sharing its DPI success globally, fostering financial inclusion and market innovations.

Projected to contribute nearly 4.2% to India’s GDP by 2030, DPI’s holistic impact transcends economic realms, fostering financial inclusion, reducing inefficiencies, and opening new markets. As India looks forward, its DPI remains a cornerstone of soft power diplomacy, offering adaptable models for emerging economies and shaping international standards. With collaborative efforts from governments, the private sector, and startups, India’s DPI is poised to unleash its full potential, driving innovation and reinforcing India’s status as a global digital leader.

DPI Digital Public Infrastructure_TPCI

Image source: Shutterstock

Over the last decade, India has emerged as one of the world’s fastest growing economies, and it is expected to become the world’s third-largest economy (nominal) by 2027, with a projected GDP of US$ 5 trillion. This massive economic transformation has been fueled by digital public infrastructure (DPI). The growth in DPI has facilitated the development of necessary government services and platforms, thereby driving market innovations in both the public and private sectors and enabling the creation of inclusive ecosystems.

DPI was at the forefront and centre of India’s G20 presidency. India was able to garner a historic consensus among the twenty largest and most influential economies on the definition and characteristics of DPI. It allowed the world to talk about this novel design approach in a common language.

India launched an open-source repository of successful DPI called the Global DPI Repository. In November 2023, PM Narendra Modi announced a Social Impact Fund (SIF) to finance DPI implementation efforts across low- and middle-income countries. Countries like Singapore, France, and the UAE have allowed the use of UPI as a mode of digital payment.

Holistic impact of DPI for India

According to Nasscom, mature digital entities (Aadhaar, UPI, and FASTag) are expected to add ~0.9% to India’s GDP by 2022. Aside from economic value addition, DPIs provide financial benefits, environmental benefits, process efficiencies, and convenience for citizens.

By 2030, the economic value added by DPIs is expected to triple from 0.9% to 2.9-4.2%. This will be driven by existing digital entities that will evolve to deliver superior user experiences, utilising new technologies such as AI and Web 3.

“India’s DPIs, like the efficient UPI for small payments and the interoperable ONDC for e-commerce, showcase the country’s ability to implement cutting-edge technology at low costs. This not only empowers citizens but also positions India as a leader in digital innovation. Secure healthcare data management further strengthens this image. By handling billions of transactions with minimal expense, India sets a global standard for scalability and affordability, solidifying its status as a soft power in the global economy,” said Anurag Srivastava, Partner at PwC India.

India UPI transactions_TPCI

Source: National Payments Corporation of India

India’s DPI is enabling a multi-dimensional impact on the economy. UPI has transformed digital payments with 117.6 billion UPI transactions worth ₹182.25-lakh crore in 2023. This is a staggering growth compared to 74 billion transactions in 2022 and 38.7 billion transactions in 2021. BharatNet aims to connect every village with high-speed internet. Aadhaar ensures efficient government services, enabling beneficiaries to get their entitlements in a convenient and hassle-free manner. Aadhar is expected to continue to play a significant role as use cases expand to include a broader range of services.

The National Digital Library offers a free digital repository comprising textbooks, articles, videos, audio books, lectures, simulations, fiction and all other kinds of learning media. On the other hand, the National Knowledge Network connects educational institutions for collaboration. These efforts are vital for India’s digital progress, making services accessible and driving development.

India is also discovering the impact of emerging DPIs such as ABDM (better healthcare for citizens, resulting in increased labour productivity) and ONDC (increased retail spending in the country).

Types of DPI

India has effectively leveraged DPIs for widespread financial inclusion, reduced inefficiencies in public services, and opened new markets. Aadhaar-based KYC, for example, allowed businesses like Zerodha and Upstox to reach new customer segments at a lower cost. Finally, India’s willingness to openly share its DPI knowledge and experience with the world further accelerated global adoption of this transformative approach.

According to Priyesh Mishra, Consultant at the World Bank, “Digital Public Infrastructure has the potential to be India’s leading technology export going forward. While DPIs are not unique to India, we are exemplars of how to do it right, at scale. There is global interest in learning from and replicating the successes of Aadhaar and UPI across the world. And this interest is matched by India’s willingness to share its DPI and the learnings that came along with the design and implementation of projects like Aadhaar and UPI at scale.

He further adds, the future of India’s DPIs will go beyond Aadhaar and UPI. The private sector is creating new and innovative DPI solutions, which have piqued global interest. One example that comes to mind is the Open Network for Digital Commerce (ONDC), which promises to disintermediate e-commerce and allow everyone, especially MSMEs, to reap it’s benefits.

Fueling India’s as a soft power

Government backing for initiatives like Aadhaar and UPI instilled public trust and ensured a focus on the public good during design and implementation. This low-cost and efficient approach to digitalization has become a model for other countries, who are adopting UPI and Aadhaar to address similar social and economic challenges. Over 30 countries are currently adopting or in the early stages of implementing UPI, Aadhar, and Beckn in their respective countries to increase social and financial inclusion.

According to Swarnim Shrivastava, a lawyer and public policy professional, “India has been able to leverage its soft power to a considerable degree when it comes to the deployment of DPI. The UPI success story has not only travelled to the Global South but also to advanced countries like France that have shown interest in India’s revolutionary digital payments ecosystem.” Demand from the Global South will only increase with Namibia being the latest signatory to a deal with NPCI for building a UPI-like digital payments system in their country.

The success of DPI showcases the prowess and potential of India’s excellent technology ecosystem and exemplifies the importance of open and interoperable digital systems. It is essentially able to transfer this technology to other countries today because of its ability to solve societal problems at scale. Having said that, India  faces competition from countries like Singapore, Estonia, and Brazil, that have also built their own DPIs and are already exporting them to various nations. 

The potential use cases for DPI are plentiful, and we have not yet tapped even 50% of our potential to build, scale, and export DPIs. But naturally, this is not purely a commercial issue. When a country buys from another country, geopolitical considerations also come into play,” adds Mr. Shrivastava.

The way ahead

India’s digital public infrastructure is a cornerstone of its soft power strategy, enhancing its global influence through improved governance, service delivery, and cultural diplomacy. DPI has the potential to be India’s leading technology export going forward. While DPIs are not unique to India, the country has emerged as an exemplars of how to do it right, at scale. There is global interest in learning from and replicating the successes of Aadhaar and UPI across the world. And this interest is matched by India’s willingness to share its DPI and the learnings that came along with the design and implementation of projects like Aadhaar and UPI at scale. 

As global recognition for India’s digital advancements increases, the country will likely play a more significant role in shaping international standards and offering adaptable models for emerging economies. Enhanced interoperability will deepen across various sectors, leading to a more comprehensive and user-centric digital ecosystem where financial, healthcare, and e-commerce data converge. 

The evolving data regulations will also demand a delicate balance between privacy and accessibility. Additionally, increased public-private collaboration will continue to drive innovations that address the nation’s diverse challenges, strengthening India’s economy and reinforcing its status as a soft power in the global digital arena.

To reach the full potential of DPI by 2030, different players have key roles to play. For governments, it’s about making supportive policies and clear regulations, spreading awareness about digital tools through workshops and campaigns, and working with businesses to innovate. Cybersecurity and data privacy are vital for success.

“India’s private sector is playing an equally important role in the massive deployment of digital public infrastructure. For instance, MOSIP, a Bengaluru based organisation, has emerged as a global champion in creating and implementing digital IDs. Countries like the Philippines, Ethiopia, and Morocco use MOSIP-based digital IDs. Similarly, organisations like the Centre for Digital Public Infrastructure and EkStep are advising countries and international organisations on how to create world class DPI,” said Priyesh Mishra.

Startups and small businesses need to create business plans that make the most of digital tools and encourage others to use them too. They should also explore new tech like Gen-AI and Web 3 to enhance their digital footprint. Larger companies should prepare for future digital needs, invest in the right infrastructure, and support innovation through programmes. Keeping a global perspective is crucial for finding effective solutions and achieving the virtually boundless potential of DPIs for India and the world.

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