Nepal and India have formally operationalised person-to-person (P2P) cross-border payment transactions, activating a memorandum of understanding signed between Nepal Clearing House Limited (NCHL) and the National Payments Corporation of India (NPCI) in June 2023. The announcement was made during bilateral talks in New Delhi on Saturday between Nepal’s Foreign Minister Shisir Khanal and his Indian counterpart Dr S. Jaishankar.
The move links Nepal’s national payment infrastructure, which underpins services such as connectIPS and NepalPay, with NPCI, the operator of India’s UPI network, which processes billions of transactions monthly. Users on both sides of the border will now be able to send money directly between the two countries through their existing digital wallets and bank accounts, bypassing the fees and delays of traditional remittance channels.
The practical significance is considerable. Nepal receives remittances worth roughly a quarter of its GDP, and India, with whom Nepal shares an open border, is a major source. An estimated four to five million Nepali citizens work or reside in India at any given time. The new payment corridor also stands to ease transactions for the millions of Indian tourists who visit Nepal annually and for traders operating in border towns on both sides.
The payments announcement was one of three made at Saturday’s talks. India also formally handed over 72 health sector and 12 cultural sector post-earthquake reconstruction projects built in Nepal through Indian development assistance, concluding a long-running programme that began after the 2015 earthquakes. Kathmandu University’s Centre for Digital Public Infrastructure and Artificial Intelligence signed a separate MoU with India’s Digital Bhashini Division to co-create a “Voice First” language translation platform for national digital infrastructure.
The two ministers also held broader discussions covering trade and economic cooperation, cross-border connectivity, energy partnerships, water resources management, and people-to-people ties. Minister Khanal is scheduled to return to Kathmandu on Sunday.