India has stalled a proposal by Alipay+ to link with the Unified Payments Interface (UPI) over national security and data-storage concerns.
The proposal, submitted in January 2026, marked the first such approach by a China-linked entity in India's financial services sector and was put forward as relations between India and China have shown signs of easing since a border clash in 2020.
Security and data concerns cited
According to sources cited by Reuters, India's concerns centre on Alipay+'s Chinese ownership links, the storage and handling of customer data, and the potential for misuse of that data. Indian law enforcement agencies have flagged risks relating to money laundering and data breaches that could expose customers to cyberfraud. A third source said that while checks on data processing, storage, and dispute resolution apply to all bilateral cross-border payment programmes, scrutiny is markedly higher for entities with ties to China.
India's foreign ministry has cited political grounds for stalling the proposal, with one source noting there is no clear path to resolving the issues involved. India's financial services sector remains subject to close oversight of foreign, and particularly Chinese, involvement, even after the government eased some restrictions on Chinese companies in March 2026. Those restrictions were introduced following the 2020 border clash.
Alipay+ had proposed a two-phase link with UPI. The first phase would have allowed Indian travellers to make payments through Alipay+'s network of more than 150 million merchants across China, Hong Kong, and other parts of Asia. A second phase would have extended the arrangement to allow international visitors to use Alipay+ within India. The development comes ahead of Chinese President Xi Jinping's expected visit to New Delhi later this month for a BRICS summit, seen by observers as part of broader efforts to stabilise bilateral ties.
Regional payment linkages under pressure
The stalled proposal comes as both UPI and Alipay+ continue to expand their respective networks of bilateral payment links, with UPI already connected to systems in countries including Malaysia, the Philippines, South Korea, Singapore, and France. Asian markets have increasingly pursued such linkages in recent years as a means of reducing costs and enabling faster cross-border transactions.
The outbound cross-border payments market for the Asia-Pacific region is projected to reach USD 23.8 trillion by 2032, according to data provider FXC Intelligence, nearly double the figure recorded in 2024. One source said that national security considerations have overridden the potential commercial benefits a UPI-Alipay+ link could offer for cross-border payments between the two countries, leaving the proposal without a defined route forward.
India's finance ministry, external affairs ministry, home affairs ministry, the Reserve Bank of India, the National Payments Corporation of India, and Ant International did not respond to requests for comment on the matter.
