In a landmark move aimed at fostering closer economic ties, India and Ghana have agreed to expedite the process of linking their respective payment systems. The agreement, reached during a Joint Trade Committee (JTC) meeting held in Accra from May 2-3, signifies a significant step forward in facilitating seamless financial transactions between the two nations.
The primary focus of the discussions centered around integrating India’s Unified Payment Interface (UPI) with Ghana’s Interbank Payment and Settlement Systems (GHIPSS) within a timeframe of six months. Once implemented, this linkage will enable users in both countries to conduct instant fund transfers, thereby enhancing convenience and efficiency in cross-border transactions.
India’s push for UPI integration extends beyond Ghana, with similar arrangements already in place with countries such as France, UAE, Sri Lanka, and Mauritius. This strategic expansion underscores India’s commitment to leveraging its advanced payment infrastructure to facilitate international trade and financial interactions.
In addition to the UPI-GHIPSS linkage, both nations explored avenues for further collaboration in digital transformation solutions. Discussions also encompassed the prospect of establishing a memorandum of understanding (MoU) on various fronts, including the Local Currency Settlement System (LCCS). LCCS facilitates cross-border transactions in local currencies, thereby reducing reliance on third-party currencies such as the US dollar and fostering greater financial autonomy.
Furthermore, the deliberations underscored the potential synergies arising from the African Continental Free Trade Agreement, highlighting opportunities for enhanced bilateral trade and investment between India and Ghana.
The identified sectors for collaboration encompass a diverse range of industries, including pharmaceuticals, healthcare, information and communication technology (ICT), agriculture, food processing, renewable energy, power, digital economy, and digital infrastructure. This broad spectrum reflects the multifaceted nature of the bilateral relationship and the shared commitment to exploring new avenues for mutual growth and development.
India’s engagement with Ghana is part of its broader strategy to strengthen economic ties with African nations. Trade between India and Ghana reached $2.87 billion in the fiscal year 2022-23, underscoring the significance of the bilateral partnership.
Moreover, India’s proactive approach towards local currency settlement systems has garnered traction, with recent advancements including the fast-tracking of LCCS with Nigeria. This initiative aims to facilitate trade in domestic currencies and streamline capital and current account transactions between the two countries.
India’s efforts to promote direct currency trade extend beyond Africa, with initiatives underway in neighboring countries such as Nepal and Bhutan. Additionally, collaborations with nations like Bangladesh and Sri Lanka signal growing interest in exploring similar arrangements.
The adoption of local currency settlement mechanisms aligns with India’s broader objectives of enhancing financial autonomy and reducing dependency on traditional reserve currencies. Recent developments, including the initiation of Rupee-Dirham direct trade between India and the UAE, underscore India’s commitment to expanding the reach of its currency in global trade.
In conclusion, the agreement to link UPI with GHIPSS represents a significant milestone in India-Ghana economic relations, promising to facilitate seamless financial transactions and foster greater collaboration across various sectors. As both nations embark on this transformative journey, the prospects for deeper integration and mutual prosperity are bound to flourish, heralding a new era of economic cooperation and synergy between India and Ghana.