New Delhi: Leader of Opposition in the Lok Sabha Rahul Gandhi has launched a sharp attack on the Narendra Modi government over the introduction of Merchant Discount Rate (MDR) on certain high-value UPI merchant transactions, alleging that the move would ultimately burden consumers.

In a post on X, Gandhi accused the government of “quietly opening the door” to charges on UPI transactions above ₹2,000. He claimed that such transactions account for only around 5 per cent of the total volume but represent nearly 65 per cent of the overall value of UPI transactions.

Invoking former Prime Minister Indira Gandhi, Rahul Gandhi said she had once been asked whether she leaned towards the Left or the Right and had responded that her thinking was “straight”.

Taking a swipe at Prime Minister Narendra Modi, Gandhi said, “Modi ji is neither Left nor Right,” alleging that the government had instead chosen to “surrender” before US President Donald Trump.

Gandhi also alleged that American payment companies had long opposed India’s zero-MDR policy and claimed that the government’s latest move was paving the way for a policy change in the same direction. He linked the issue to the ongoing India-US trade negotiations and accused the Modi government of yielding to American pressure.

“Modi ji, stop bowing before America. Show courage, stand up and withdraw the UPI tax,” Gandhi said, demanding that the government reverse the move.

The Centre, however, has clarified that MDR is not a tax collected by the government or NPCI. According to the Finance Ministry, UPI will remain free for all person-to-person transactions, while payments to merchants up to ₹2,000 and transactions covered under the zero-MDR framework for eligible small merchants will also remain free. The government said around 96 per cent of P2M transactions would remain unaffected.

The National Payments Corporation of India has subsequently fixed MDR at 0.4 per cent for specified person-to-merchant UPI transactions above ₹2,000, with a maximum charge of ₹300 per transaction. The new framework is scheduled to take effect from October 15, 2026.

The government has maintained that the framework is aimed at supporting the long-term sustainability, security and infrastructure of the UPI ecosystem, while keeping consumer payments free.