Rahul Gandhi demands rollback of UPI merchant fee, accuses PM of bowing to US pressure

Leader of the Opposition in the Lok Sabha Rahul Gandhi on Wednesday demanded an immediate rollback of the newly introduced charge on certain UPI transactions, accusing Prime Minister Narendra Modi of capitulating to United States pressure.

In a video posted on X, Mr. Gandhi said the Prime Minister had "decided to lie down straight and prostrate himself in front of Donald Trump", and alleged that the government was imposing a "UPI tax" on Indians to hand "a huge amount of money" to the United States.

Invoking a remark attributed to former Prime Minister Indira Gandhi — that she neither leaned left nor right but stood straight — Mr. Gandhi said Mr. Modi had adopted a different approach altogether. He urged the Prime Minister to "stop lying down in front of the U.S., have a spine, stand up and rollback the UPI tax".

The Congress has sought to connect the UPI decision to what it describes as mounting American pressure on India, including demands to alter the zero merchant discount rate (MDR) regime for UPI. The party has sharpened its attack in the wake of moves in the U.S. Congress to impose tariffs on countries purchasing oil and gas from Russia.

Congress general secretary in-charge of communications Jairam Ramesh said the U.S. Trade Representative had earlier criticised UPI for being free and for displacing card companies such as Visa and Mastercard. He alleged that the government had yielded to a U.S. demand to end zero MDR and charge for UPI, and questioned why the rate had been fixed at 0.4% and whether the move was meant to let American card companies compete with UPI. "The PM has redefined NOTA — Narendra's Ongoing Trump Appeasement," he said.

Congress president Mallikarjun Kharge, reacting to the U.S. tariff legislation, said the threat of higher tariffs showed that the government's foreign and trade policies had "miserably failed". In a post on X, he said pressure from Washington was mounting across tariffs, trade, H1B1 immigration, visas and digital payments, and accused the Prime Minister of surrendering. Congress media and publicity department head Pawan Khera said, "We are not playing ball with America and China. We are the ball."

The government has maintained that the new MDR is not a charge on consumers. Under the decision announced on Tuesday, a 0.4% fee will apply to merchant transactions above ₹2,000 from October 15, while person-to-person transactions and small payments will remain free.

Congress spokesperson Supriya Shrinate rejected that position, saying the move would ultimately raise costs for ordinary users. She said a ₹5,000 transaction would attract a ₹20 fee and a ₹10,000 transaction a ₹40 fee, and alleged that the decision had been taken at the behest of American companies. Ms. Shrinate also questioned why the government and the Reserve Bank of India could not bear the cost of running the UPI ecosystem, and sought an assurance that charges would not later be extended to other transactions.