Addressing Financial Inclusion Challenges Through Collaborative Efforts: India and G20

This chapter delves into India’s evolving financial inclusion landscape and its digital transformative journey resulting in a sharp rise in bank account ownership—from 35% to 96% between 2011 and 2025—accompanied by a significant reduction in gender gap. It also highlights India’s role in global discourse of financial inclusion policies specifically in the G20 Working Group on Global Partnership for Financial Inclusion (GPFI). India’s progress in financial inclusion has been driven by its key initiatives anchored on the success of providing a digital identity—Aadhaar at population scale and leveraging it for targeted delivery of various government welfare schemes like Pradhan Mantri Jan Dhan Yojana (PMJDY), Direct Benefit Transfers (DBT), micro insurance like Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) etc. Scaling of the fast payment systems like the Unified Payments Interface (UPI), which recorded over 23 billion transactions in May 2026 and data exchange like Account Aggregator (AA) and Unified Lending Interface (ULI) also promises to take forward the journey of financial inclusion to the next level. These initiatives along with inclusive, interoperable, scalable and responsible Digital Public Infrastructure (DPI) approach—combination of digital identity, payments, and data-sharing platforms, have helped to reduce costs, increase access at scale, and foster innovation. Endorsed during India’s G20 Presidency in 2023, this model now can serve as a replicable blueprint for advancing financial inclusion globally. India’s engagement with the G20, particularly through the Global Partnership for Financial Inclusion (GPFI) working group, has indeed contributed in shaping global financial inclusion policies, particularly those designed for the Global South. As GPFI Co-Chair (2024–2026) and as a member, India continues to champion digital financial inclusion and MSME financing by leveraging DPI. India also emphasizes maintaining focus on access and usage of formal financial services against shifting the focus to other issues with the unnecessary commitments like climate related ones, which could dilute and hamper the effectiveness of financial inclusion efforts. Notably, 1.4 billion people globally and 5% of India’s adult population continues to remain unbanked. Moreover, India’s MSME sector still faces a significant credit gap estimated at ₹20–25 lakh crore (around 7% of GDP). Looking ahead, the National Strategy for Financial Inclusion (NSFI) should prioritize last-mile delivery, livelihood enhancement, and skill development along with deepening efforts for improving usage of financial accounts leveraging DPI. The chapter also underscores multilateral cooperation to scale the DPI model globally for enhancing cross-border payments, and build an inclusive, resilient financial ecosystem. India’s experience demonstrates the transformative power of innovation, collaboration, and leadership in bridging the global financial divide.