Despite Centre's denial, Rahul sticks to UPI tax claim, says PM bowed to Trump

Rahul Gandhi demanded an immediate rollback of the new UPI merchant discount rate, calling it a "UPI tax" and alleging it would benefit the US. The Centre rejected the charge, saying MDR is not a tax, consumers will not bear it and the policy was decided independently.UPI ‘tax’ row: Rahul demands rollback, says Modi ‘prostrated’ before TrumpDespite the Centre’s clarification that the newly announced merchant discount rate (MDR) is not a tax, Congress MP and Lok Sabha Leader of Opposition Rahul Gandhi on Wednesday demanded an immediate rollback of what he called a “UPI tax”. His remarks came amid a political row over the new framework for merchant UPI transactions.Under the new framework, a 0.4% MDR will apply to specified merchant UPI transactions above Rs 2,000. The government has said customers will not bear the charge. The fee will also be capped at Rs 300 for transactions of Rs 75,000 and above.As the row intensified, the Centre on Wednesday dismissed claims that the move had been shaped by foreign pressure. The Opposition had alleged that the decision was meant to appease US President Donald Trump.Soon after the Ministry of Finance’s clarification, the Congress tweeted: “Narendra Modi weakened UPI under pressure from his friend Donald Trump and opened the way for American companies to earn from digital payments.” Doubling down, Rahul Gandhi also took to X and invoked his grandmother, former Prime Minister Indira Gandhi, saying: “Indira ji was once asked whether she leans left or right and her response was, ‘I don't take left, I don't take right, I stand straight.’ Modiji has a completely different concept. He is neither left nor right. He has decided to lie down straight and prostrate himself in front of Donald Trump.”Rahul Gandhi then claimed that the new move would divert a huge amount of money to the US. “He has put a tax on every single Indian person by taxing UPI and giving huge amount of money to the United States. Modiji please stop lying down in front of the United States. Have a spine. Stand up and roll back the UPI tax.”Responding to the criticism, the Finance Ministry said India’s policy decisions on UPI were taken independently and maintained that the payments system would continue to remain free for consumers.In a statement posted on social media, the ministry said: “It is clarified that MDR is neither a tax nor a charge collected by the Government or NPCI. It is distributed among payment ecosystem participants, including banks and payment application providers, to support the operation and continued expansion of the UPI ecosystem.”The ministry also outlined what it described as safeguards for consumers. It said banks had been instructed that merchants could not pass the MDR burden on to customers. It also said there would be no hidden fees, adding that UPI applications would not be allowed to impose platform charges.Rejecting allegations of outside influence, the ministry said claims that the change had been made because of foreign pressure were false. It added that India’s UPI policy decisions were being made independently, with the aim of building a self-sustaining, inclusive and affordable digital payments ecosystem.The issue has now turned into a political flashpoint, with Rahul Gandhi pressing for the framework to be withdrawn immediately, while the government insists that the MDR is not a tax, will not affect consumers and has been introduced as an independent policy decision.- EndsPublished By: Sayan GangulyPublished On: Sep 16, 2026 16:16 IST