However, these challenges provide an actionable opportunity of advancing a regional agenda to build trusted infrastructure, leadership, and process to support DPI, says a report recently published by the Asian Development Bank titled “Digital Public Infrastructure: Landscape and Opportunities in South Asia.” It is first of the three actionable opportunities that stand out as particularly catalytic, the report emphasized.

The second actionable opportunity, it says, is to establish a regional capacity-building platform to strengthen technical and operational understanding planning, and project management of development and deployment of DPI. It says that technical capacity is a binding constraint across all six countries in the region. Governments face capability gaps in DPI governance, design, implementation, and operations. These gaps are impeding uptake of national DPI platforms and making cross-border interoperability difficult to pursue. At the same time, many countries are independently seeking support for peer learning, technical training, and exposure to good practices, which presents an opportunity to coordinate efforts at the regional level.

The third actionable opportunity according to the report is to coordinate DPI for regional use cases: disaster aid, tourism, climate, and transport. It says most regional DPI conversations focus narrowly on digital payments or ID. But DPI can unlock transformative value in specific cross-border use cases where coordination is urgently needed and technically feasible.

The report says that a regional task force or technical committee could identify the most viable pilots and coordinate sandboxing, standards alignment, and co-investment. These use cases can act as early “trust builders” and showcase the value of DPI beyond borders.

The recommendations of the report are significant since DPI has become an investment priority for governments around the world. Understood as the core foundational building blocks of many digital systems and services, DPI enables identification, payments, data exchange, and interoperability in the digital world. Less visible than “hard” digital infrastructure components such as data centres and telecom towers, the “soft” DPI elements are crucial digital infrastructure that is gaining prominence as countries progress on their digital transformation journeys.

Government agencies leverage DPI to improve public services and improve access to entitlements. But opportunities to innovate are also leveraged by digital entrepreneurs and platform providers that deploy a wide range of innovative solutions on top of foundational DPI. Cross-border use cases are an emerging new domain where DPI has been used to facilitate an exchange for funds, customer information, and other data which may ease the flow of people, goods, or funds.

The six countries the report has covered - Bangladesh, Bhutan, India, Maldives, Nepal, and Sri Lanka – have improved their connectivity infrastructure, they have rolled out government platforms and upgraded data-hosting capacities, although the degree of digitalization varies across countries. The capacity to execute digital transformation plans and ensure consistent service quality requires further attention, the report emphasized. Existing budget and procurement rules often do not match the requirements of DPI investments, which are typically modular, anticipate the reuse of common building blocks, and make use of open-source components. Built on cloud computing, the need for technical capacity and operational expenditure is often higher than the up-front capital expenditure.

The report finds that core DPIs are being scaled across all six countries, although maturity levels vary. For instance, digital identity ranges from near-universal coverage in India, where its national ID system covers 99%of the population, to rapid expansion in Bhutan, where the reach of its National Digital Identity has reached 46%of eligible users and is integrated with 100+ services. Maldives has scaled its digital ID to 47% of the population with access to 140+ service portals. Bangladesh is aiming to expand Smart National ID from its current 40%population coverage as part of a broader digitalization push.

Digital payments represent the most advanced DPI. India’s Unified Payment Infrastructure (UPI) powers 85% of all retail digital transactions. Nepal has digitized 90% of government expenditure transactions. After its rollout in 2023, Maldives’ Favara processed transactions valued at $1.54 billion in its first year. Interoperability across national payment systems is emerging as a cross-border use case. For example, Indian UPI users are now able to make digital payments while travelling in Bhutan, Nepal, and Sri Lanka.

By contrast, data exchange capabilities are less uniform. India enables users to undertake seamless document sharing and exchange based on user consent (i.e., Account Aggregator and DigiLocker). Bhutan established a national data exchange and provides a digital wallet that enables real-time verification, making digital transactions more secure.

Sectoral DPI is more nascent but has started to emerge. This includes a rollout of the open-source data collection and management platform “DHIS2” in Sri Lanka or the national education platform “DIKSHA” in India, which builds on top of the existing core DPI.

However, this report finds that public trust remains a key determinant of successful digital adoption. Privacy and security concerns among users and a lack of clear accountability mechanisms (or grievance redressal) have marred DPI rollouts. This calls for governments to be explicit in their intent, clear on their digital risk management, and transparent in their design decisions.

Finally, foundational legal frameworks often remain incomplete or fragmented. While identity and payment regulations exist, enforceable provisions for interoperability, data sharing, and cross-border arrangements may be left pending. Crucial interoperability frameworks remain patchy, lack detailed rules, role clarity, and adequate resourcing. (IPA Service)