Congress leader Rahul Gandhi on Tuesday (September 15, 2026) said that the Modi government has quietly paved the way for the introduction of UPI transaction fees and that a “compromised” Prime Minister Narendra Modi has “yet again capitulated” to American pressure.
Congress has raised questions about the government’s notification of UPI transactions, saying it is clearly setting up conditions for people to pay fees for such transactions and questioning whether it is being done to open up digital payments to US firms to “appease” US President Donald Trump.
In a post in Hindi on X, Mr Gandhi said the Modi government had quietly paved the way for imposing duties on UPI.
“MDR can now be levied on UPI trade transactions above ₹2,000. Even if these transactions constitute only 5% of the volume, they account for almost 65% of the total value of UPI transactions,” Mr. Gandhi said.
“The government says buyers will not be charged. But where will the fees collected from shopkeepers ultimately come from? These will be added to the prices, straight from the buyer’s pocket,” the Leader of the Opposition said in the Lok Sabha.
US payments companies have long opposed India’s zero MDR policy, Mr Gandhi said.
Now the Modi government has opened the way for policy change in that direction, Mr Gandhi said.
“Like the US trade deal, a compromised PM Modi is once again bowing to American pressure,” the former Congress chief said.
The Congress said the government has once again demonstrated complete dishonesty and transparency and has undermined the trust of users.
The Opposition Party’s attack comes after the government directed banks and payment system providers not to charge fees on Unified Payments Interface (UPI) transactions up to ₹2,000 or on payments made through RuPay debit cards.
However, the government has not specified whether there will be a charge for transactions over £2,000 payable by traders. Till now, no fee has been levied on UPI transactions, irrespective of the amount.
Reacting to this, Congress General Secretary in charge of Communications Jairam Ramesh said, “As we warned on August 6, 2026, to which the Hon’ble External Affairs Minister herself saw fit to respond, the Modi government is now using the new laws passing through Parliament to begin the process of charging for UPI.”
“A notification has just been issued under the amended Payment and Settlement Systems Act 2007, which prohibits banks and providers from charging fees only for UPI transactions of less than ₹2,000. But there is NO explicit protection for any transaction exceeding this limit,” Mr. Ramesh said on X.
According to him, it is clear that we are all willing to pay fees for UPI transactions.
“Tomorrow the limit itself could be changed with another such notice – there are no longer any guarantees in the law. As far as we know, the government may also impose a charge on daily transactions between people,” Mr. Ramesh said.
“The Modi government has once again demonstrated a complete lack of honesty and transparency and has undermined user trust. Is all this being done to open up digital payments to American companies to appease President Trump?” – said the Congress General Secretary.
According to a gazette notification dated September 14, no bank or system provider will charge, directly or indirectly, any fee from a person making or receiving payment through RuPay debit card or UPI transaction up to ₹2,000.
The notification follows an amendment to Section 10 A of the Payment and Settlement Systems Act, 2007, which provides a favorable framework for the introduction of Merchant Discount Rate (MDR) for payments through UPI and other notified electronic payment modes.
The amendment bill was passed by Parliament during the monsoon session, which ended on August 13, 2026. Following the passage of the bill, the government said that the decision on MDR rates will be taken by UPI and the Services Steering Committee headed by the National Payments Corporation of India (NPCI).
Explaining the reason for introducing the fees, the government in a statement said that given the exponential volumes of transactions, the system requires significant and ongoing upgrades in cybersecurity, fraud prevention and infrastructure.
It said the fees were necessary for market expansion and self-sufficiency. There is a need to increase competition by encouraging more companies to expand their operations, which requires a self-sustaining revenue model, it said.
Relying on subsidies alone is not viable for the next wave of growth, he said, adding that a balanced framework is needed to ensure UPI remains robust, inclusive and future-ready.
UPI is operated by the National Payments Corporation of India (NPCI) under the initiative of the Reserve Bank of India (RBI) and the Indian Banks Association.
Last month, Congress criticized the government over the Taxation and Other Laws (Amendment) Bill even before its passage, questioning whether Prime Minister Narendra Modi was seeking to dilute UPI and open up the digital payments sector to American businesses “under pressure” from his “good friend Donald Trump”.
Mr. Ramesh said the Modi government’s latest bill removes the statutory guarantee that keeps UPI transactions free.
According to Mr. Ramesh, this opens up the possibility of charging Merchant Discount Rate (MDR) fees, which can be easily extended to all payments in the future.
The cost will inevitably be borne by ordinary people, who will now have to pay to use UPI transactions, he said.
Finance Minister Nirmala Sitharaman said the merchant discount rate on digital transactions applies to merchants, not customers, and the MDR fee will support banks and fintech companies to invest more in infrastructure and security.
Criticizing Mr. Ramesh for his remark that common people may have to pay more to use UPI, Ms. Sitharaman said the NPCI-led UPI and Services Steering Committee is yet to take a decision on the MDR, which will happen only after Parliament passes the Taxation and Other Laws (Amendment) Bill, 2026.
Replying to Mr. Ramesh, Ms. Sitharaman said, “Before spreading rumors, @Jairam_Ramesh ji, please consider the following: Merchant Discount Rate (MDR) is applicable only to merchants and not to end users/customers. This will help banks and fintechs invest more in infrastructure, innovation and security. All UPI users will reap the benefits of this investment.”