UPI row: Congress alleges US pressure behind Modi govt move

New Delhi: Congress MP Jairam Ramesh has intensified his attack on the Modi government over proposed changes to the legal framework governing digital payments, alleging that the move could pave the way for charges on Unified Payments Interface (UPI) transactions and reflects pressure from the United States, a report by The Wire said.

Ramesh, responding to Finance Minister Nirmala Sitharaman, argued that the Taxation and Other Laws (Amendment) Bill, 2026, would remove the statutory protection that has kept UPI free of merchant discount rates (MDR) since 2020. He questioned why the government was weakening that safeguard now, citing the US Trade Representative’s criticism of India’s zero-MDR policy and the US Trade Representative's support for domestic payment systems.

The proposed amendment to the Payment and Settlement Systems Act, 2007, would allow the government to decide, by notification, which electronic payment modes may be charged, rather than maintaining the existing blanket legal protection.

Sitharaman has rejected the criticism, saying any future MDR would be imposed on merchants rather than customers and could help banks and fintech companies strengthen payment infrastructure, innovation and security. She also said the relevant UPI steering committee has not yet decided on MDR.

Ramesh dismissed these arguments, contending that merchants could ultimately pass additional costs to consumers. He maintained that UPI should remain a public digital infrastructure and that the Reserve Bank of India has sufficient resources to sustain it without charging users.

He also accused the government of rushing the bill through Parliament amid disruptions, linking the controversy to the wider political tensions surrounding the handling of student protests.