UPI MDR: Govt Rejects Rollback Calls, Denies Foreign Pressure After Rahul Gandhi's 'Trump' Taunt On PM Modi

The Central government's decision to put the Merchant Discount Rate (MDR) on certain UPI transactions has snowballed into a major controversy as Congress and the ruling BJP have come to loggerheads over the issue. In a fresh attack on Prime Minister Narendra Modi, Lok Sabha LoP Rahul Gandhi said that the PM has decided to lie down straight and prostrate himself in front of United States President Donald Trump.

In a video message, captioned 'Modi ji, Roll Back UPI tax, Now', Gandhi said, "Once former Prime Minister Indira Gandhi was asked if she leans Left or Right. Her response was I don’t lean Left, I don’t lean Right, I stand straight."

"Modiji has a completely different concept. He’s neither Left nor Right; he has decided to lie down straight and prostrate himself in front of US President Donald Trump," the Raebareli MP said.

Gandhi called the MDR a 'tax', saying, "He has put a tax on every single Indian person by taxing UPI and giving a huge amount of money to the United States."

"Modi ji, please stop lying down to America. Show courage, stand up and withdraw the UPI tax. Thank you," he added.

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On Tuesday, the National Payments Corporation of India (NPCI), an organisation that facilitates UPI, announced an MDR of 0.4 per cent on eligible person-to-merchant (P2M) transactions above Rs 2,000 from October 15.

The charge is capped at Rs 300 for transactions of Rs 75,000 and above and will be borne by the merchant. For people-to-people transactions, no MDR has been announced.

Finance Ministry rejects foreign pressure charges

Gandhi's remarks came even as the government clarified that no foreign pressure was behind the decision.

In a statement on X, the Finance Ministry firmly denied allegations, clarifying that policy decisions regarding MDR stem entirely from domestic priorities.

"Some claims suggest the change is due to foreign influence. This is false. India’s UPI policy decisions are made independently, with the clear goal of building a self-sustaining, inclusive, and affordable digital payments ecosystem," the finance ministry stated.

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Govt rejects rollback calls

Meanwhile, a government source told news agency PTI that the Centre would not roll back the 0.4 per cent MDR charge. He said that there was no question of a re-think on the issue and that the decision was taken in the larger interest of the UPI ecosystem.

What govt aims with MDR

Citing the platform's exponential domestic expansion, the finance ministry stressed that 24.5 billion transactions were processed in August 2026 alone and that a small fee on high-value transactions would fund better digital infrastructure and cybersecurity, among fulfilling other objectives.

"Since its launch in 2016, UPI has grown into the world’s largest real-time interoperable payment system — entirely on India’s own terms. UPI processed 24.5 billion transactions in August 2026 alone. To keep this system self-sustainable, secure and innovative, a small fee on high-value merchant transactions helps fund: Better infrastructure and cybersecurity, Support for small merchants in Tier III–VI towns and rural areas, Awareness and incentives to expand UPI adoption," the ministry stated.