The Global Trade Research Initiative urges India to maintain its unified payments system rules amid US concerns, emphasising the importance of protecting domestic competition and policy autonomy in the face of international criticism and recent legislative changes.
India should not reshape its Unified Payments Interface rules in response to U.S. pressure, the Global Trade Research Initiative said on Thursday, arguing that the country needs to protect competition, policy autonomy and the long-term resilience of its digital payments system.
The warning came as the Lok Sabha passed a bill amending the Payment and Settlement Systems Act, 2007, opening the way for the government to allow banks and other payment providers to levy charges on UPI and other notified electronic payment methods. At present, banks and payment companies are barred from directly or indirectly charging users for UPI and RuPay debit card transactions, a policy that has helped drive the rapid spread of low-cost digital payments across consumers, small businesses and street vendors.
GTRI said the zero merchant discount rate, or MDR, has been central to that growth because it lets people send and receive money without transaction fees. But the think tank also acknowledged that banks, the National Payments Corporation of India and payment firms still have to pay for cybersecurity, fraud prevention, server capacity, dispute handling and system upgrades. Rather than imposing a broad merchant fee, it suggested targeted budgetary support, incentives, charges on large commercial payments, cross-subsidies from other financial services or limited fees on high-turnover merchants.
The debate has also taken on an international dimension. The Office of the United States Trade Representative’s 2026 National Trade Estimate report criticised both Brazil’s Pix and India’s UPI-RuPay framework, and GTRI said India should not allow foreign trade complaints to dictate domestic payment policy. Ajay Srivastava, GTRI’s founder, said India should retain payment-data localisation rules, arguing that keeping such data in the country helps regulators investigate fraud, strengthens cybersecurity and protects national security. He also said India should not introduce MDR simply to placate U.S. objections or to protect the business interests of Visa, Mastercard and other foreign card networks.
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