IndiaPosted at: Sep 17 2026 5:10PM


Amid escalating political war on UPI, Govt rejects Congress’ allegation of ‘external influence’

Vibha Sharma
New Delhi, Sep 17 (UNI) Amid the escalating political slugfest over the BJP-led NDA’s announcement to introduce a 0.4% Merchant Discount Rate (MDR) on select UPI payments exceeding Rs 2,000, the Finance Ministry on Thursday dismissed Congress’ allegations that US pressure influenced the decision, asserting that the latest NPCI guidelines do not offer any advantage to international credit cards over RuPay on the UPI platform.
“Contrary to misleading claims made that MDR has been introduced under external pressure, introduction of MDR on select high-value transactions will enable more domestic companies to operate under UPI. Thus, the action of introduction of MDR is a step in protecting India’s sovereignty in Electronic payment ecosystem,” it said
“The allegation that MDR has been introduced under any external influence is patently false and misleading,” it added.
According to the government, the introduction of MDR on select high-value transactions will provide a self-sustaining revenue model to smaller companies to compete for higher share in the UPI ecosystem. "Thus introduction of MDR has been done with the intention of allowing more domestic companies to expand their operations"
Congress president Mallikarjun Kharge and the Leader of the Opposition in the Lok Sabha Rahul Gandhi have been accusing the Narendra Modi government of opening the door to charges on Unified Payments Interface (UPI) transactions and “surrendering to American pressure”, demanding a roll-back.
Congress MPs Gaurav Gogoi and Manish Tewari have, meanwhile, refuted the government’s claim that the decision to levy the fee on UPI payments was supported by them as members of the Parliamentary Standing Committee on Finance.
Government sources were on Wednesday quoted as saying that five Congress MPs, including Gogoi, Tewari and P Chidambaram, were present when the report (on charges on certain UP transactions) was adopted and no dissent was recorded in the published minutes. While Gogoi said the panel did not discuss the “UPI tax proposal”, Tewari accused the BJP-led government for allegedly using the proceedings of Parliamentary Standing Committees “which are privileged to score brownie points”.
Congress’ Jairam Ramesh called them “pathetic attempts” by the government “to divert attention away from the gigantic backlash generated after the UPI tax decision taken to appease US companies & Donaldbhai.”
Amid the escalating war of words, the Finance Ministry, while dismissing Congress’ allegations that US pressure influenced the decision, asserted that the latest NPCI guidelines do not offer any advantage to international credit cards over RuPay on the UPI platform.
Regarding observations in the US Trade Representative’s (USTR) 2026 report on the inability of US electronic payment service providers to participate in the UPI ecosystem, including credit transactions on UPI, on a level playing field with RuPay, it said the “NPCI circular of September 15, 2026, does not allow credit transactions on UPI by any other credit card other than the RuPay credit card. There is a clear policy of only allowing RuPay credit card on UPI to enable RuPay credit card to become the preferred choice of credit card amongst users in India”.
On market share ceiling it said that “although, NPCI had mandated market share limitation of 30 per cent for third-party application providers in November 2020, however, this mandate could not be implemented because companies other than the market leaders could not compete in absence of a self-sustaining revenue model.”
From October 15, a 0.4 per cent MDR will apply to person-to-merchant UPI payments above Rs 2,000. The charge will be paid by merchants, not consumers, and will be capped at Rs 300 for transactions of Rs 75,000 or more. Payments between individuals, as well as the vast majority of everyday merchant payments, will remain free.UNI VS AAB
Tags: #Amid escalating political war on UPI# Govt rejects Congress’ allegation of ‘external influence’
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