Congress Criticizes Government Over UPI Transaction Fees After Tax Bill Passage

The Congress party has criticized the Indian government for potentially introducing fees on UPI transactions after the recent passage of the Taxation and Other Laws (Amendment) Bill, 2026. Party General Secretary Jairam Ramesh raised concerns about the implications for consumers and questioned whether the government is yielding to pressure from the U.S. to benefit American companies in the digital payment sector. Ramesh highlighted the financial sustainability of UPI without additional charges and suggested that the amendment may be linked to foreign interests. This controversy raises significant questions about the future of digital payments in India.

By Narendra Chaudhary Aug 6, 2026, 16:17 IST

Congress Raises Concerns Over UPI Transaction Fees

New Delhi, August 6 - Following the passage of the Taxation and Other Laws (Amendment) Bill, 2026 in the Lok Sabha, the Congress party has targeted the government, alleging that it has paved the way for imposing fees on UPI transactions. Party General Secretary Jairam Ramesh questioned whether Prime Minister Narendra Modi is succumbing to pressure from his close friend Donald Trump to undermine UPI and open the digital payment sector to American companies.

In a post on X, Ramesh asserted that the Taxation and Other Laws (Amendment) Bill, 2026 abolishes the legal framework that has kept Unified Payment Interface (UPI) transactions free of charges until now.

He argued that this amendment would facilitate the implementation of Merchant Discount Rate (MDR), which could eventually apply to all forms of digital payments. Ramesh claimed that this burden would ultimately fall on consumers, who might have to pay fees for using UPI. He dismissed the government's argument that this step is necessary to maintain the financial sustainability of the UPI system.

Ramesh stated that the Reserve Bank of India has sufficient capacity to keep the system financially sustainable without imposing additional fees on merchants or consumers. He noted that in the fiscal year 2025-26, the Reserve Bank transferred ₹2.86 lakh crore in surplus to the central government, a small portion of which could adequately support crucial digital public infrastructure like UPI.

The Congress leader suggested that the real motive behind this amendment might be linked to a 2026 report from the U.S. Trade Representative, which criticized the fee-free status of UPI and RuPay, claiming it harmed American payment platforms like Visa and Mastercard.

Ramesh questioned whether the Modi government is weakening UPI under Trump's influence to benefit American companies in the digital payment sector. He also accused Trump of previously claiming that he pressured India into a ceasefire during Operation Sindoor by threatening tariffs. Ramesh pointed out that the U.S. has attributed the reduction in India's oil imports from Russia to Trump's directives.

He alleged that the central government has previously capitulated to American pressure regarding the India-U.S. trade agreement, adversely affecting farmers and small businesses.