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How Foreigners and NRIs Visiting India Use UPI to Make Payments

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In February of this year, the Reserve Bank of India (RBI) issued a circular granting Non-Resident Indians (NRIs) and foreign nationals visiting India access to the Unified Payments Interface (UPI). As a result, the RBI has made corresponding changes to its Master Directions on Prepaid Payment Instruments (PPIs). During a session in the Lok Sabha on July 31, Dr Bhagwat Kisanrao Karad, the Union Minister of State for Finance, provided further details on this matter.

Readmore: What is UPI

UPI for foreign nationals, NRIs visiting India

The UPI facility has now been expanded to include travelers from G-20 countries at international airports in Mumbai, Bengaluru, Mumbai, and New Delhi, specifically for merchant payments. Eventually, this facility will be extended to all entry points in India.

The RBI has introduced a provision to allow NRIs with international mobile numbers linked to their non-resident ordinary (NRO) or non-resident external (NRE) accounts to access UPI. The National Payments Corporation of India (NPCI), which manages the UPI system, has confirmed that this facility is available in ten regions: Australia, Saudi Arabia, Hong Kong, Singapore, Canada, Qatar, Oman, the United States, the UAE, and the United Kingdom. Previously, this facility was limited to foreign travelers or NRIs with Indian mobile numbers.

How foreign nationals, NRIs can use UPI

To utilize UPI, users must link their mobile number to an NRO/NRE account. The member bank responsible for linking the customer’s account must ensure that the necessary Know Your Customer (KYC) process is conducted in accordance with Indian laws, including the Foreign Exchange Management (FEMA) Act.

According to the RBI’s guidelines on Prepaid Payment Instruments (PPIs), PPIs can be issued in collaboration with entities/institutions authorized to engage in foreign exchange transactions under FEMA. These PPIs can only be used for merchant transactions. Loading or reloading such payment instruments will require the receipt of foreign exchange through any payment instrument or cash. Any remaining balances can be transferred “back to source” or converted into foreign currency.

What the RBI has said on UPI transactions

The RBI has permitted UPI transactions for travelers from G20 countries. The G20 includes Argentina, Brazil, Australia, Canada, Germany, China, France, India, the Republic of Korea, Indonesia, Italy, the United States, Japan, Mexico, Russia, Saudi Arabia, the United Kingdom, South Africa, Turkey, and the European Union (EU). This move to enable UPI transactions for G20 tourists was made during India’s presidency in the group.

Volume of UPI transactions over the years

The value of UPI transactions in India has experienced significant growth over the years, increasing from 5.86 lakh crore in 2018 to 125.94 lakh crore in 2022. From January to June 2023, the value of transactions reached Rs 83.20 lakh crore. Other countries have also started accepting UPI payments since last year.

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