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Rise of the “Digital Gandhi”: How India’s Modi is Exporting Tech Governance to the World

  On November 22, 2023, at the Group of Twenty (G20) leaders’ video summit held by India, the rotating chairman of the country, Indian Prime Minister Narendra Modi pushed for two global initiatives aimed at promoting the development of digital public infrastructure (DPI). Initiatives, namely the Global Digital Public Infrastructure Library and the Social Impact Fund. Under Modi’s direct urging, the G20 Digital Economy Working Group, chaired by India’s Ministry of Electronics and Information Technology, also went through multiple rounds of negotiations and finally led to the first global consensus on DPI in history under the G20 framework.
  For a time, India seemed to have become the “spokesperson” of DPI, not only elevating this technical term to the latest concept of global governance, but also using multilateral organizational platforms to frequently promote it to countries around the world, especially the “Global South”. Many foreign media even call it the Indian version of the “One Belt, One Road” initiative. In March 2023, Microsoft co-founder Bill Gates said, “No country has established a more comprehensive digital infrastructure than India.” So, what is the status of DPI construction in India?
The development counterattack of India’s DPI

  Anyone who traveled to India ten years ago will know that the country’s market was dominated by cash. However, the marginalized people in Indian society who did not have ID cards or bank accounts in the past can now transfer money, make payments, and even get government benefits and small loans as long as they have a mobile phone with Internet access. And behind this is the credit of India’s continuous development and maturity of DPI in recent years.
  In India, DPI largely refers to the digital governance system represented by “The India Stack” (The India Stack), which was officially launched in India in 2009. “India Stack” aims to integrate institutions with different attributes, sizes, and business types into the same system through standardized basic protocols, and promote “population-level” data, identity, and capital circulation, thereby improving the accessibility of digital services in India. Application scale and service quality. It consists of three modules that are independent of each other but also work closely together.
  The first is the Aadhaar (meaning “basic” in Hindi) identity authentication system as the basic layer. The identification documents of the Indian people used to be extremely confusing, including driver’s licenses, voter cards, passports, etc., but even if all the certificates are added up, the number of people in India with identity documents is less than half of the total population. A variety of identity certificates are not only time-consuming and laborious to verify, but are also easy to forge. Therefore, around 2010, the Indian government launched Aadhaar, which links biometric features such as citizens’ photos and fingerprints with 12-digit identity numbers. As of August 2023, more than 1.3 billion people in India have Aadhaar numbers, accounting for more than 99% of India’s adult citizens. Taking banking services as an example, tellers can immediately call up the facial and fingerprint information pre-stored in the database for verification through the customer’s Aadhaar number. This not only facilitates customers, but also greatly reduces the bank’s workload. At the same time, based on Aadhaar, the Modi government launched the PMJDY initiative aimed at popularizing bank accounts. Therefore, Aadhaar is also the foundation for the current digital transformation of India’s welfare, financial, and legal systems, and is an important pillar for the Modi government to improve national capabilities.
  The second is the United Payment Interface (UPI) as the application layer. Faced with a wide range of digital wallets and mobile payment platforms, the Modi government launched UPI in 2016 to coordinate the originally separate payment systems of banks, governments, and non-bank finance. An Indian who has never opened a bank account, as long as he has Aadhaar and a smartphone, can use the QR code or text message generated by the UPI mobile APP to complete payments, collections, transfers and other services involving different institutions. At the same time, users can operate multiple accounts in different banks through the APP, and even use the same username and password to complete services involving multiple institutions. It is worth noting that users can also connect to various government services through UPI, including the direct welfare transfer system, which will help completely solve the corruption problem caused by welfare distribution. UPI has enabled hundreds of millions of marginalized groups in Indian society who are difficult to reach with traditional financial services to be included in the modern financial system, promoting India to become one of the largest digital payment markets in the world.
  The third is the digital folder (DL) and data aggregator (AA) as the expansion layer. Any online activity creates a digital footprint, which is retained in the form of data. In order to manage the massive data generated at all levels of the “India Stack”, the Modi government has released the digital storage key document DL, and plans to release the key data sharing intermediary AA in the next step. These digital infrastructures will largely replace traditional paper documents and significantly improve public service efficiency and anti-counterfeiting capabilities. In the future, AA will be able to verify personal identity information, and also provide user portraits and certification materials using user-authorized financial asset certificates, liabilities, and cash flow. It is worth noting that the Indian regulatory authorities plan to give users greater “autonomous data control” by cutting data and services so that AA and platform companies can only use or store user data with user authorization.
Toward internationalized “Indian digital governance”

  The Modi government has continued to promote the development of DPI and achieved considerable results, promoting India as a late-developing country to achieve the largest increase in digital governance practices in the world in recent years. When the progress of “Made in India” is far less than expected and traditional high-end service outsourcing lacks inclusiveness, DPI’s successful practice of driving “Digital India” has given the Modi government great confidence and given India, which has long wanted to be a “world mentor” A useful diplomatic card. This is why the Modi government has begun to vigorously promote “Indian-style digital governance” with DPI as the core, highlighting the universality, advancement and security of its country’s experience. What needs more attention is that the Modi government has formulated targeted promotion strategies based on the characteristics of different targets on the international stage.
  The first is to identify the pain points of mainstream international multilateral organizations and strive for endorsement and channels for Indian-style digital governance. For a long time, “inclusive finance”, “equal rights for marginalized groups” and “poverty alleviation for disadvantaged groups” have been themes that mainstream multilateral international organizations such as the United Nations, World Bank and International Monetary Fund (IMF) attach great importance to. They enjoy extremely high “moral value” and have therefore been To a large extent, it has become its “business pain point”. The Modi government has highlighted the inclusive nature of “Indian-style digital governance” in eliminating differences and the technological advantages of “overtaking around corners”, and has successfully gained support from relevant international organizations. In July 2021, the IMF published the article “India’s Inclusive Financial Achievements Continue to Improve”, and in March 2023, it launched an enhanced version of the report “Accumulating Benefits: Experience in India’s Digitalization Process”. In September 2023, just before India hosted the G20 Leaders Summit, the World Bank released the “G20 Global Financial Inclusion Partnership” document, praising India for “achieving the financial inclusion goal that originally took 47 years to complete in six years” through DPI. The endorsement of mainstream international organizations has greatly improved the authority and credibility of Indian-style digital governance, especially making it easier for India to use the diplomatic channels and economic funding of international organizations to promote governance models and technical standards to the “Global South”.
  The second step is to identify the pain points of developing countries and provide more grassroots solutions to expand the base of Indian-style digital governance. In the context of Chinese manufacturers significantly reducing the cost of 4G equipment and the global spillover of technological innovation companies, in recent years many developing countries have not lacked mobile Internet hardware and digital wallet applications, but lacked a seemingly basic identity authentication system. This has brought significant consequences to India. opportunity. Take sub-Saharan Africa as an example. According to the World Bank, as many as 470 million people in the region still lack “any form” of official identification. In response to this demand pain point, the Modi government launched the “Modular Open Source Identity Platform” (MOSIP) in 2018 to provide other countries with identity authentication technology solutions similar to Aadhaar. Currently, the Philippines, as the first country to adopt India’s solution, has issued digital ID cards to 76 million citizens. In addition, Ethiopia, Morocco, Sierra Leone, Guinea, and Togo have all received technical guidance from India and are promoting the construction of national digital identity systems.
  The third is to grasp the pain points of domestic social needs and the needs of neighboring countries to create greater application space for Indian-style digital governance. For a long time, India’s external balance of payments has been highly dependent on remittances, but at the same time, India is a source of remittances from neighboring small and medium-sized countries. This two-way demand also provides broad space for the Modi government to expand Indian-style digital governance. For example, in response to the huge demand for overseas remittances, the Modi government has successively promoted UPI to connect Singapore’s payment system Pay Now and the United Arab Emirates’ payment system Neopay, which has significantly reduced remittance fees for Indian citizens working in the relevant countries. For another example, since 2022, the Modi government has also allowed citizens of Nepal and Bhutan to conduct cross-border remittance transfers through UPI, which has objectively increased India’s economic and financial penetration into these countries. Currently, the Modi government has made the interconnection of payment systems a highlight of its diplomatic offensive.
The shortcomings are obvious, so why do you still play this card?

  When India served as the rotating chair of the G20, it pushed the digital ministers of participating countries to adopt an outcome document on DPI. It also established a consensus technical definition for DPI and provided specific principles for further promotion and development of DPI. In addition, the Modi government has also included DPI in the Global Partnership for Financial Inclusion (GPFI) action plan launched in cooperation with the World Bank. India’s high-profile promotion of DPI raises another question – India lacks both powerful hardware manufacturers and global Internet companies, so why does it still choose to play the digital economic governance card?
  India’s shortcomings in developing DPI are actually very obvious. On the one hand, India still lacks the basic hardware capabilities required to build DPI. Although India’s electronics assembly industry has made great progress in recent years, India is completely unable to provide hardware solutions from communication base stations, networking equipment to user terminals such as mobile phones in the near to medium term. The lack of hardware supply capabilities means that Indian-style digital governance cannot truly become a “complete solution”, and its appeal will inevitably be greatly reduced. On the other hand, India lacks independent software technology capabilities that have been tested by the market. Although the Indian software industry has a high global reputation, it has not yet produced a world-class local Internet company. Instead, its market has been occupied by American Internet giants after the complete expulsion of Chinese-funded Internet companies in 2020. The absence of major local Internet companies means that it is difficult for the Indian government to independently provide a complete set of technical solutions. It can only propose “Party A designs” such as standards, requirements, and models, and then seek technologically capable companies from other countries as Party B to realize the design needs.
  Despite this, the Modi government’s promotion of DPI still has two unique advantages – neutrality and applicability. From a geostrategic perspective, in the context of the intensified strategic game between China and the United States, the Modi government’s promotion of DPI has provided a “third way” for some countries, reducing the ability of these countries to “choose sides” in sensitive areas such as data and networks. risk. From the perspective of applicability, India’s own low starting point, poor foundation, and weak strength in developing DPI have become advantages, because this shows that Indian-style digital governance has lower initial requirements than American and Chinese-style solutions, and can theoretically better adapt to some lacking technologies. capabilities, financial strength and national governance capacity.
  The Modi government’s global promotion of Indian-style digital governance is the first time that the country has truly provided public goods that can be called “big country level”. Its initial success has also provided China with a lot of reference for further promoting the joint construction of the “Belt and Road”. experience. China also has advantages in the entire hardware industry chain that the United States and the West do not have, and local Internet giants that India does not have. On the one hand, under the framework of the “Digital Belt and Road”, it can join hands with Internet platform companies to provide services that are closer to the needs of the “Global South”. A true “complete solution” covering both hardware and software. On the other hand, we can also pinpoint the problem of India’s “ability to design but not implement”, and promote relevant Chinese enterprises to actively participate in the construction of DPI, so as to achieve the effect of “packing Chinese wine in Indian bottles”.

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