India-UK trade deal to give UPI a bigger play in Britain, ease remittances

India-UK Trade Pact to Boost Digital Payments and Financial Integration

In a landmark development that could reshape financial ties between India and the United Kingdom, the impending India-UK Free Trade Agreement (FTA) is set to provide Unified Payments Interface (UPI)—India’s flagship digital payments platform—a much larger footprint in the UK. The move is expected to significantly ease remittances for the Indian diaspora, boost cross-border trade, and promote fintech cooperation between the two nations.

The framework for this integration is part of broader negotiations aimed at concluding the FTA, which has entered its final stages. The inclusion of digital payment facilitation, specifically UPI interoperability, is among the standout deliverables.

UPI Expansion: A Global Ambition Takes Shape

Developed by the National Payments Corporation of India (NPCI), UPI has already revolutionized domestic transactions in India, processing over 11.4 billion transactions worth ₹18.23 trillion in June 2025 alone. With previous international collaborations in countries like Singapore, the UAE, Bhutan, and France, expanding UPI into the UK market marks a strategic leap in India’s digital diplomacy.

The Indian government, along with NPCI International Payments Ltd (NIPL), is reportedly in discussions with UK authorities and payment providers to allow UPI-based apps to function seamlessly in Britain. This will allow Indian tourists, students, and NRIs to transact in GBP using familiar Indian digital wallets.

Remittances: Lower Costs, Faster Transactions

One of the most tangible benefits of UPI’s entry into the UK will be a more streamlined, cost-effective remittance mechanism. The UK is one of the top five countries in terms of remittances sent to India. According to World Bank data, Indians living in the UK remitted over $4.3 billion in 2023.

Currently, traditional remittance channels involve high transaction fees and longer processing times. The integration of UPI with UK financial systems is expected to disrupt this model by offering near-instant transfers with minimal costs, directly benefiting Indian families and businesses.

Policy Push: Digital Infrastructure as a Trade Lever

The India-UK FTA is part of New Delhi’s broader effort to include digital trade as a key pillar in international agreements. By embedding digital infrastructure and payment systems like UPI into trade pacts, India is seeking to export its fintech model while also enabling its diaspora and exporters to benefit from a low-cost, high-efficiency payment system abroad.

“Digital trade is becoming a critical component of modern FTAs. UPI’s inclusion in the UK agreement symbolizes India’s tech-forward approach to diplomacy,” said Dr. Anjali Mehta, a senior fellow at the Indian Council for Research on International Economic Relations (ICRIER).

Market Implications and Fintech Momentum

The move is expected to significantly benefit fintech companies in both India and the UK. Indian digital payment firms could see a new market open up, while British payment service providers may collaborate with Indian firms to offer integrated solutions.

“The Indian fintech ecosystem is maturing, and its export through UPI could be as transformational as the software outsourcing wave of the early 2000s,” said Rajiv Kapoor, fintech analyst at Edelweiss Securities.

Shares of Indian companies involved in digital payments and cross-border remittance services—such as PhonePe, Paytm, and Razorpay—could see increased investor interest in anticipation of expanded global operations. Moreover, banks and NBFCs in both countries may need to realign their remittance service offerings to stay competitive.

A Test Bed for Global UPI?

The UK rollout could act as a test case for further UPI integration across Europe. With London being a global financial hub, successful implementation could encourage other EU countries to consider similar models for digital payments interoperability.

“The UK’s regulatory environment and financial services openness make it an ideal staging ground for UPI’s Western debut,” noted Edward Thompson, Director at the UK India Business Council.

Beyond consumer use, India and the UK are exploring possibilities of integrating UPI with government and trade payment systems to reduce time and costs in cross-border business settlements.

Investor Outlook: A New Frontier for Indian Digital Ecosystem

Investors are keenly watching the trajectory of the FTA and the role UPI will play in shaping the financial corridor between India and the UK. As digital public infrastructure becomes a pillar of global trade negotiations, platforms like UPI are no longer seen as merely domestic utilities but as strategic assets.

The Indian government has also hinted at exploring Digital Public Infrastructure (DPI) as an export category, which could lead to further monetization opportunities through licensing, partnerships, or joint ventures in foreign markets.

The announcement comes at a time when fintech IPOs are gaining steam in India, and global capital is showing renewed interest in scalable, government-backed digital platforms.

Bridging Continents with Code

The proposed India-UK trade agreement, with UPI integration at its core, is a testament to how financial technology can act as a bridge between nations. It’s a powerful symbol of India's shift from being a consumer of digital technology to becoming an exporter of innovative, homegrown digital infrastructure. If successful, the rollout in Britain could pave the way for UPI to become a globally accepted payments solution—bolstering India’s fintech influence and deepening its economic footprint abroad.