India’s Digital Public Infrastructure Spurs $100 Billion Startup Ecosystem: Nandan Nilekani Unveils Vision for “Finternet”

Infosys co-founder and non-executive chairman Nandan Nilekani has highlighted the transformative impact of India’s digital public infrastructure (DPI) on the startup ecosystem, revealing that the value of startups built on this foundation exceeds $100 billion. Speaking at the Global Fintech Festival 2024, Nilekani emphasized the pivotal role that foundational technologies like the Unified Payments Interface (UPI) have played in fostering innovation and entrepreneurship.

Nilekani, a key architect behind UPI, articulated that the initiative was designed to create a robust infrastructure that entrepreneurs could leverage for developing new and innovative financial solutions. The platform, he noted, was intended to serve as a backbone for a wide array of financial services, paving the way for a diverse and dynamic fintech landscape.

At the festival, Nilekani introduced the concept of “Finternet,” which he envisions as the next evolution in financial technology. According to Nilekani, Finternet will be a user-centric and unified platform that integrates all types of assets into a single infrastructure. This includes not only traditional financial instruments but also real estate, art, and digital assets like NFTs. The aim is to provide users with comprehensive control and participation in managing and tokenizing a diverse range of assets.

“Current financial systems often fall short in meeting user demands for greater choice and control,” Nilekani explained. “Finternet will address these needs by creating a universal infrastructure that allows for the management of all kinds of assets, from user-controlled content to regulated financial products.”

The announcement of Finternet was part of a broader discussion on the future of fintech at the festival, which is being held in Mumbai. The event also saw notable developments, including the launch of two new products by the National Payments Corporation of India (NPCI): UPI Circle and Bharat BillPay For Business (BBPS for Business). UPI Circle introduces the capability for users to delegate payments to trusted secondary users, while BBPS for Business offers automated solutions for invoice payments.

Additionally, Flipkart’s fintech arm, super.money, made headlines with the launch of its co-branded credit card in collaboration with Utkarsh Small Finance Bank.

The Indian fintech sector has witnessed remarkable growth, with startups raising over $28 billion between 2014 and 2023. The sector now boasts more than 23 unicorns and 36 soonicorns, driven by factors such as increasing internet penetration, widespread smartphone use, and affordable data tariffs. Digital public infrastructure like UPI, ONDC, and the account aggregator framework has been instrumental in fostering this growth.

Looking ahead, the Indian fintech market is projected to reach $2.1 trillion by 2030, according to an Inc42 report. This expansive growth underscores the significant role that digital public infrastructure plays in shaping the future of finance and supporting the burgeoning startup ecosystem in India.