In a major push to strengthen digital and financial ties, Prime Minister Narendra Modi and Malaysian Prime Minister Anwar Ibrahim jointly launched the Malaysia–India Digital Council (MIDC) and formalised the NPCI–PayNet payment linkage during the Indian leader’s official visit to Kuala Lumpur on 8 February 2026.
The initiative enables the expansion of India’s Unified Payments Interface (UPI) into Malaysia through collaboration between NPCI International Payments Ltd and Payments Network Malaysia Sdn Bhd (PayNet). The move is designed to simplify cross-border digital transactions for tourists, students, migrant workers and small businesses, reduce transaction costs and strengthen bilateral fintech cooperation.
Officials from both sides described the development as a milestone in the broader strategic partnership between India and its Southeast Asian counterpart, underscoring a shared commitment to inclusive digital growth and secure financial connectivity.
A Digital Corridor For Businesses And Travellers
The launch of the Malaysia–India Digital Council marks the creation of a structured platform for sustained cooperation in digital finance, cybersecurity, digital public infrastructure and emerging technologies. At the heart of the announcement is the operational linkage between UPI and Malaysia’s domestic payment ecosystem, which will allow users to make real-time, low-cost retail payments across borders using familiar mobile applications.
For Indian travellers visiting Malaysia, this means the ability to scan and pay in ringgit without relying heavily on currency exchange counters or international card networks. Likewise, Malaysian consumers and businesses interacting with Indian partners will benefit from smoother transactions settled through interoperable systems.
Speaking at the event, Modi highlighted that UPI has transformed everyday transactions in India by making digital payments accessible even to small vendors and rural communities. He noted that expanding this infrastructure abroad reflects confidence in home-grown digital public goods and strengthens people-to-people ties.
Ibrahim echoed the sentiment, describing the payment linkage as a forward-looking initiative that aligns with Malaysia’s ambitions to build a resilient, innovation-driven digital economy. Officials involved in the partnership explained that direct system integration reduces dependency on intermediaries, lowers remittance costs and improves transparency particularly important for small and medium-sized enterprises (SMEs), students paying tuition fees and migrant workers sending money home.
Industry representatives added that the integration could significantly benefit cross-border tourism and retail sectors. With travel between the two countries steadily recovering and expanding, frictionless digital payments are expected to enhance consumer confidence and spending convenience.
Fintech observers also point out that such arrangements promote regulatory cooperation and shared standards, helping ensure that data protection, fraud monitoring and dispute resolution mechanisms remain robust and aligned.
Building On A Broader Strategic Partnership
The digital initiatives unveiled during the visit are part of a larger framework of cooperation that has been steadily expanding in recent years. Bilateral trade between the two nations has grown across sectors including electronics, palm oil, pharmaceuticals and services, and both governments have sought to diversify collaboration into high-technology domains. The formation of the Malaysia–India Digital Council provides a formal channel to explore joint opportunities in artificial intelligence, semiconductor supply chains, start-up ecosystems and digital governance.
The payment linkage builds on India’s broader efforts to internationalise UPI through partnerships with multiple countries across Asia and beyond. By positioning its digital public infrastructure as an exportable model, India aims to share technology that has driven financial inclusion domestically.
Malaysia, with its well-developed banking sector and dynamic fintech landscape, presents a natural partner for such integration. Analysts note that the move may also encourage trade settlements in local currencies over time, reducing exposure to currency volatility and reinforcing economic resilience.
Diplomatic observers view the initiative as a reflection of increasing trust and policy alignment between the two governments. Over the past year, several memoranda of understanding have been signed in areas ranging from education to defence exchanges.
The latest digital collaboration underscores the importance both sides attach to economic pragmatism and technological progress as anchors of bilateral ties. As global supply chains face uncertainty and geopolitical tensions persist, strengthening regional connectivity through practical, citizen-centric measures has emerged as a shared priority.
The Logical Indian’s Perspective
The launch of the Malaysia–India Digital Council and the UPI–PayNet linkage offers more than a technical upgrade to payment systems it represents a step towards a more interconnected and people-focused regional future.
When digital innovation is directed towards easing everyday burdens, it can empower those who are often left at the margins of global finance: small traders, migrant workers, students and first-time entrepreneurs. By reducing transaction costs and simplifying cross-border payments, this initiative has the potential to translate diplomatic goodwill into tangible benefits for ordinary citizens.
