India and Indonesia have agreed to strengthen economic and digital cooperation by promoting cross-border QR code payments and Local Currency Transactions (LCT) between the Indian Rupee and the Indonesian Rupiah. The understanding was announced following talks between Prime Minister Narendra Modi and Indonesian President Prabowo Subianto. Under the new framework, Indian tourists will be able to make payments in Indonesia using UPI-linked QR systems, while Indonesian visitors will be able to use their domestic QR payment platforms in India. The initiative aims to make cross-border transactions faster, cheaper, and more secure.
The agreement will also allow businesses in both countries to settle trade directly in Indian Rupees and Indonesian Rupiah, reducing dependence on the US dollar and lowering currency conversion costs and exchange-rate risks. The move is expected to benefit tourists, students, MSMEs, traders, and investors by simplifying payments and boosting bilateral trade and investment. In addition, Indonesia welcomed India’s participation in the development of the strategically important Sabang Port, located near the vital Malacca Strait, further strengthening economic and strategic ties between the two nations.
