Speaking about the proposed Merchant Discount Rate (MDR) on UPI transactions, NITI Aayog Vice Chairman Ashok Kumar Lahiri said there is a cost involved in running the digital payment system and questioned who should bear it. Lahiri made it clear that this was his personal view and not the official position of NITI Aayog, reported ANI.
“Costs are incurred in UPI; who will pay that? This is User Pay Principle,” Lahiri said.
He said he personally believes users should pay for business transactions and cautioned against relying on government grants or subsidies to keep businesses running.
“Please do not think that the government would provide grants or subsidies for everything. How will the business run otherwise?” he said.
Lahiri also stressed that any charge should be reasonable and should allow the payment ecosystem and businesses to continue growing.
“Take less, take from business and take only that much which results in further growth,” he said.
His comments come as the government prepares to introduce MDR on certain UPI transactions above Rs 2,000 from October 15, 2026.
Under the new framework, merchants will generally pay 0.4% MDR on direct UPI payments above Rs 2,000, subject to applicable caps and category-based concessions. Consumers, however, will continue to make UPI payments without paying the MDR directly.
Certain categories, including fuel, telecom, insurance and railways, will be covered by a concessional flat MDR of Rs 5 per transaction.
Lahiri was also speaking on NITI Aayog’s latest for the first quarter of FY27, covering April to June 2026.
The report assesses global and domestic trade trends amid continuing geopolitical tensions and changes in trade policies, while noting that global trade has remained resilient.
Lahiri compared the report to a medical report and said the overall picture for India’s trade is positive, but there is room for greater diversification.
“This business is like a medical report. After a pathological test, the doctors in NITI Aayog confirmed that everything is going well, but diversification is required,” he said.
According to Lahiri, India needs to diversify both where it exports and what it exports.
“Where we export and what we export are things we should diversify a little,” he said.
The Trade Watch Quarterly report said global goods trade reached $13.7 trillion in the first half of calendar year 2026, registering 12.5% year-on-year growth. Global services trade also expanded by 10.5% during the period.
The latest edition of the report has a special focus on India’s metals and ores trade, a strategically important sector for manufacturing, infrastructure, energy transition and advanced industries.
It examines India’s export competitiveness as well as its growing dependence on imports of metals and ores, with particular attention to critical minerals and higher-value non-ferrous metals.
The report also looks at ways to strengthen domestic value addition, attract investment, diversify export markets and improve India’s competitiveness in global trade.