New Delhi: The Congress on Wednesday alleged that the Narendra Modi government had capitulated to a US demand to withdraw the zero Merchant Discount Rate (MDR) regime and introduce charges on certain UPI transactions.
The party claimed that Prime Minister Narendra Modi had “redefined NOTA” as “Narendra’s Ongoing Trump Appeasement”.
Congress general secretary in charge of communications Jairam Ramesh also questioned whether the decision to bring back MDR on UPI payments was intended to give American card networks greater space to challenge the Indian digital payments system.
Congress Links Move To US Pressure
Ramesh said the US House of Representatives was scheduled to vote the following day on a Bill proposing 100% tariffs on Indian goods.
The US Senate has already cleared the “draconian” legislation, he said.
In a post on X, the Congress leader further alleged that the Donald Trump administration was tightening its policies against Indian immigrants and introducing more stringent measures affecting them.
H-1B visa fees have been raised, while holders of the work visa could soon face immediate deportation if they lose their jobs, Ramesh said. He added that H-1B visa holders largely comprise IT professionals.
“Here, the Modi government has given into a US demand to get rid of zero MDR and charge for UPI. The US Trade Representative earlier this year criticized UPI for being free and having driven out Visa and Mastercard,” Ramesh said.
He said the estimated annual expenditure on operating the entire UPI ecosystem was approximately Rs 20,000 crore, as reported by The New Indian Express. According to him, this amount was less than 10% of the funds transferred by the Reserve Bank of India to the Union government over the past few years, allegedly to present a healthier picture of public finances under the Modi administration.
“The PM has redefined NOTA – Narendra’s Ongoing Trump Appeasement,” Ramesh said.
0.4% Fee For Large Payments
The Congress leader’s statement followed the government’s announcement of revised UPI rules. Under the new framework, a 0.4% MDR will be charged on merchant transactions above Rs 2,000 from October 15, ending the zero-fee arrangement for such payments.
However, customers will not have to pay the fee. Person-to-person transfers and merchant payments of up to Rs 2,000 will remain free. UPI users will also continue to enjoy unlimited transactions without monthly or volume limits.
The government said MDR would be charged within the merchant-payment system and would not be collected from customers.
The move has faced opposition criticism. Congress leader Rahul Gandhi called it another “surrender” by a “compromised” Prime Minister Narendra Modi to US pressure.
The BJP rejected the charge and accused the Congress of spreading “fake news”. It said consumers would not be charged for using UPI.
Ramesh questioned the reason for setting the MDR at 0.4%.
“Why 0.4% MDR? Is it because debit card MDR is also 0.4%? Is this being done to enable US card companies to compete with UPI?” he said.
He also asked whether the new system would make UPI “sustainable”, as the government claims.