India and Bhutan Complete Two-Way UPI Connectivity, Enabling Digital Payments for Travellers in Both Countries

India and Bhutan have completed two-way UPI-based digital payment connectivity, allowing Bhutanese visitors to make digital payments while travelling in India and complementing the UPI payment facility already available to Indians visiting Bhutan.

The second phase of the international UPI arrangement was launched in Thimphu on September 17 in the presence of External Affairs Minister Dr S. Jaishankar, Bhutanese Prime Minister Tshering Tobgay and Foreign Minister D.N. Dhungyel.

The development extends one of the earliest international deployments of India’s Unified Payments Interface into a reciprocal payment arrangement between the two neighbouring countries.

Bhutanese Travellers Can Now Use Digital Payments in India

The latest phase addresses the other side of the India-Bhutan payment corridor.

UPI acceptance had already enabled Indian visitors to make digital payments in Bhutan. Under Phase II, Bhutanese visitors to India can use supported Bhutanese mobile payment applications to make payments by scanning QR codes in India.

The arrangement had been under development for some time. An earlier India-Bhutan joint statement specifically identified Phase II of UPI connectivity as the mechanism that would allow Bhutanese visitors to India to make payments using their domestic mobile applications and QR codes.

With the second phase now launched, the payment relationship becomes bidirectional: Indians can use UPI-linked payment facilities in Bhutan, while Bhutanese travellers gain corresponding digital-payment functionality in India.

For tourists, students and other travellers, the arrangement can reduce dependence on cash and simplify small-value everyday transactions across the border.

Bhutan Was an Early International Market for UPI

Bhutan has played an important role in the international expansion of India’s digital payment infrastructure.

It was among the first foreign countries to adopt UPI-based payment acceptance. Since then, India’s payment network has expanded into a growing group of international markets.

Government data released in 2026 lists UPI as operational in countries including Bhutan, Nepal, Singapore, the UAE, France, Sri Lanka, Mauritius and Qatar, with additional payment and remittance linkages subsequently introduced elsewhere.

The broader Indian strategy is increasingly moving beyond allowing Indian travellers to use UPI overseas towards linking India’s payment infrastructure with the domestic payment systems of partner countries.

Prime Minister Narendra Modi identified precisely this approach at the Global FinTech Fest earlier this month, calling for UPI to be connected with partner countries’ domestic payment networks to facilitate cross-border transactions and potentially lower payment and remittance costs.

Digital Payments Becoming Part of India-Bhutan Economic Connectivity

The reciprocal payment arrangement adds a new layer to the extensive economic relationship between India and Bhutan.

Unlike a conventional arrangement that merely permits Indian UPI applications to work at overseas merchants, two-way connectivity increases the usefulness of the infrastructure for citizens on both sides of the border.

This is particularly relevant to India and Bhutan because movement between the two countries includes tourism, education, business and frequent official and people-to-people exchanges.

The payment connection also fits into wider India-Bhutan cooperation in emerging areas such as fintech, STEM and space, which both governments have increasingly incorporated into the bilateral partnership.

Nehru-Wangchuck Scholarship Scheme Extended

Digital payments were only one component of Jaishankar’s two-day visit to Bhutan.

The two sides also witnessed the exchange of a Memorandum of Understanding extending the Nehru-Wangchuck Scholarship Scheme, which supports Bhutanese students pursuing higher education at Indian institutions.

The programme forms part of the longstanding education and capacity-building relationship between the two countries.

The extension is intended to continue providing Bhutanese students access to Indian higher-education institutions while strengthening educational links between the neighbouring countries.

India Hands Over 54 Electric Vehicles to Bhutan

India also handed over 54 Made-in-India electric vehicles to the Royal Government of Bhutan during the visit.

Jaishankar formally presented the vehicles to Prime Minister Tobgay as part of India’s support for Bhutan’s transition towards electric mobility and more sustainable transport.

The handover adds a physical mobility component to a bilateral relationship that is increasingly expanding into digital infrastructure, renewable energy and emerging technologies.

UPI’s International Footprint Continues to Expand

The Bhutan development comes as India accelerates efforts to internationalise UPI and connect the system with payment networks abroad.

UPI itself has reached enormous domestic scale. According to government figures, the ecosystem had 741 live banks in July 2026, when it processed approximately 2,365.8 crore transactions worth ₹29.87 lakh crore.

International expansion has taken several forms. Some countries allow Indian travellers to make UPI payments at participating merchants, while others have developed cross-border payment or remittance connections between their domestic systems and India’s infrastructure.

Bhutan now represents an important example of the latter direction: moving from overseas acceptance of Indian UPI payments towards reciprocal digital-payment connectivity.

The significance of the September 17 launch therefore extends beyond another country accepting UPI. By completing the second phase, India and Bhutan have created a two-way payment bridge designed to allow travellers from either country to use familiar digital-payment infrastructure while visiting the other.

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References

Ministry of External Affairs, Government of India. Official updates on External Affairs Minister Dr S. Jaishankar’s visit to Bhutan and launch of Phase II of international UPI connectivity, 17 September 2026.

Government of India / Government of Bhutan. Joint Press Release on India-Bhutan bilateral cooperation, including Phase II of UPI connectivity for Bhutanese visitors to India. Prime Minister of India

Press Information Bureau, Government of India. Official UPI statistics and international footprint, 2026. Press Information Bureau

Prime Minister’s Office, Government of India. Global FinTech Fest 2026 — remarks on expanding UPI’s international connectivity, 8 September 2026. Prime Minister of India

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