Narendra's Ongoing Trump Appeasement: Congress's swipe at govt over UPI move

The Congress accused the Centre of imposing a merchant charge on some UPI payments under US pressure. The government said consumers would not pay the MDR, while the BJP called the Opposition's attack fake news.

In Short

• Congress accuses govt of yielding to US demand on new UPI charge
• Congress calls it 'Modi tax', links move to US criticism and visa rule toughening
• BJP denies consumer charges, calls Congress claims fake news

The Congress on Wednesday accused the government of giving in to a US demand to impose a new charge on some UPI payments from October 15, with senior leader Jairam Ramesh asking whether the move was intended to benefit American card companies.

Questioning the rationale behind the move, the Rajya Sabha MP dubbed it “Narendra’s Ongoing Trump Appeasement."

Under the government's new Merchant Discount Rate framework, merchants will be charged 0.4 per cent on direct UPI payments above Rs 2,000. The fee will be paid by the merchant to its acquiring bank and capped at Rs 300 for transactions of Rs 75,000 and above.

The government has said customers will not be required to pay the charge, while person-to-person transactions will remain free.

Taking a swipe at the government, the Congress leader said in a post on X, “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 then linked the UPI decision to US criticism of India's digital payments system.

“Here, the Modi Govt has given into a US demand to get rid of zero MDR and charge for UPI. The US Trade Representative earlier this year criticised UPI for being free and having driven out Visa and Mastercard."

The Congress leader also referred to the US House of Representatives vote on a Bill that, according to him, introduces 100 per cent tariffs on India, saying the US Senate had already approved the measure.

He also cited what he described as the Trump administration’s crackdown on Indian immigrants and tougher rules affecting H-1B visa holders.

“H-1B visa costs have been increased, and such holders could soon be deported immediately when out of a job. Such holders are mostly IT professionals."

While announcing the new framework on Monday, the Finance Ministry said, "Customers will not be required to pay any charge when making such payments through UPI. MDR is a charge within the merchant payment ecosystem. It is not a charge on customers making UPI payments."

The ministry added that individuals will continue to have "unlimited free usage, with no monthly quotas, volume restrictions or tiered caps on free UPI transactions."

The move has, however, drawn criticism from opposition parties.

The Congress has termed the new charge as "Modi tax", with Rahul Gandhi alleging that Prime Minister Modi was "compromised" and "once again surrendering" to American pressure.

The BJP hit back, accusing the Congress of spreading "fake news", saying the government had made it absolutely clear that MDR charges would not be levied on consumers.

- Ends