India and Malaysia Partner to Lower Cross-Border Payment Costs via NPCI-PayNet

India and Malaysia have agreed to work on a link between their domestic payment systems to support cheaper cross-border transactions.  

The proposal involves cooperation between NPCI International, the overseas arm of the National Payments Corporation of India, and Malaysia’s PayNet. The linkage is expected to cover retail payments and remittances between the two countries. 

The decision was announced after Prime Minister Narendra Modi’s visit to Malaysia on 7-8 February, where he met Prime Minister Anwar Ibrahim. According to the joint statement, the step is to make payments simpler for tourists, students, small businesses and people sending money across borders. 

Digital Council to Guide Cooperation 

The 2 governments also announced the formation of the Malaysia-India Digital Council. The body will serve as a platform for cooperation across fintech, e-governance, cybersecurity, artificial intelligence and digital public infrastructure. 

It is expected to bring together government agencies, industry groups and academic institutions from both sides. The council will focus on coordinating projects and policy discussions related to digital systems. 

Local Currency Settlement Plan 

Both sides also encouraged the use of local currencies in bilateral trade. Transactions may be invoiced and settled in the Indian rupee and Malaysian ringgit. This builds on ongoing cooperation between the Reserve Bank of India and Bank Negara Malaysia. 

The joint statement also referred to the role of stronger air and maritime links in supporting trade and investment flows between the two countries. 

Economic and Security Agenda 

Beyond digital payments, the statement covered cooperation in semiconductors and advanced manufacturing. Both countries described the chip sector as strategically important and called for closer work on technology, supply chains and workforce development. 

Energy cooperation was also discussed. Malaysian firms PETRONAS and Gentari were cited for their activities in India’s renewable energy and green hydrogen projects. The two sides also referred to food security, with Malaysia reiterating its role as a supplier of sustainable palm oil. 

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Conclusion 

The payment linkage and digital council form part of a set of measures across trade, technology, energy and security, showing plans to build closer economic ties between India and Malaysia. 

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