Modi visit sees Malaysia back Indian UPI, local currency settlement

India and Malaysia agreed on Sunday, February 8, to deepen cooperation in digital payments and expand the use of local currencies in bilateral trade and investment during Prime Minister Narendra Modi’s two-day visit to Malaysia.

The two leaders launched Malaysia-India Digital Council (MLDC) and backed NPCI–PayNet payment link, paving way to introduce India's Unified Payments Interface (UPI) system will be in Malaysia. This will simplify cross-border payments for businesses and travellers and strengthen

financial ties between the two economies.

"One remarkable feat is our decision to use local currencies as far as possible in bilateral trade and investment. India's SBI and Bank Negara Malaysia have worked on establishing trade in Indian rupees and Malaysian ringgit," Anwar said.

Both countries have agreed to accelerate central bank cooperation to support ringgit-rupee settlements to cut transaction costs and reduce dependency on third-party currencies for trade financing. Malaysia and India recorded around$18.6 billion in bilateral trade in 2025.

Modi said the expansion of digital finance and local currency use would complement broader goals to boost trade and investment, reflecting stronger economic ties under their Comprehensive Strategic Partnership.

The two countries also signed 11 MoUs, spanning areas such as semiconductors, defence, disaster management and peacekeeping, among other things.

In the security domain, both sides reaffirmed commitments to strengthen collaboration on counterterrorism, intelligence-sharing and maritime security.

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