DPI Brief — August 10, 2026

Parliament Passes Landmark Bill Opening Door for UPI Merchant Fees

The Taxation and Other Laws (Amendment) Bill, 2026 has been passed by both houses of Parliament, amending the Payment and Settlement Systems Act, 2007 to legally enable a Merchant Discount Rate (MDR) on UPI transactions. The Lok Sabha passed the bill on August 6, with the Rajya Sabha taking it up on August 11. The amendment removes the existing legal prohibition on charging fees for electronic payments, giving the government power to notify which modes remain free and at what thresholds.

The government has clarified that person-to-person UPI transactions will remain free — any MDR would apply only to merchant payments, and reportedly only for high-value transactions above ₹2,000 from larger merchants (annual turnover above ₹40 lakh). Proposed rates range from 0.05% to 0.4% depending on merchant size. Finance Minister Nirmala Sitharaman stated that customers will not bear any charges. This marks a fundamental shift in India’s DPI philosophy: UPI’s zero-MDR regime, long considered its competitive moat, is being recalibrated toward sustainability. A committee will review MDR rates after the bill becomes law. (PIB) [L2: Payments]

LPG e-KYC Deadline: Aadhaar Biometric Authentication Mandate for Domestic Gas

The Oil Ministry’s Aadhaar-based e-KYC mandate for non-PMUY LPG consumers is approaching its August 16, 2026 deadline. Customers who have not completed biometric authentication via face scan through the IndianOil ONE App, their distributor, or delivery personnel will lose eligibility for domestic-rate cylinders until compliance. Oil marketing companies are sending urgent reminders to lakhs of customers. The mandate, directed in March 2026, ties LPG subsidy access directly to the Aadhaar identity layer — a significant expansion of Aadhaar-based service authentication beyond banking and into essential consumer services. This represents the deepening interconnection between L1 (Identity) and service delivery. (GoodReturns) [L1: Identity]

GeM Crosses ₹20 Lakh Crore GMV, Plans AI-Driven Next Phase

Government e-Marketplace (GeM), India’s L4 commerce DPI, has crossed a cumulative GMV of ₹20 lakh crore, with over ₹5 lakh crore recorded in FY 2025-26 alone. CEO Mihir Kumar outlined the platform’s next phase in an August 9 interview: AI integration for predictive analytics, wider MSME onboarding, deeper DPI ecosystem integration, and expansion of Suvidha Kendras to gram panchayats. The platform is positioning itself not just as a procurement portal but as a full-stack DPI infrastructure layer connecting government buyers with suppliers at scale. The AI push will target demand forecasting, price intelligence, and automated compliance — potentially reshaping how India’s public procurement functions. (ETGovernment) [L4: Commerce]

DigiLocker Partners with AAERI for International Document Verification

DigiLocker has partnered with the Association of Australian Education Representatives in India (AAERI) to launch “AAERI Verify” — a platform enabling seamless digital document verification for Indian students applying to Australian universities. The platform allows Australian institutions to directly verify academic credentials stored in DigiLocker, eliminating manual attestation delays and reducing fraud risk. This is a significant cross-border DPI use case: India’s L3 document infrastructure being consumed by foreign institutions for trusted verification. The partnership signals DigiLocker’s evolution from a domestic document locker into an international credential verification backbone. (ETEducation) [L3: Documents]

Karnataka Launches AI-Powered Composite Digital Crop Survey

Karnataka has launched the Composite Digital Crop Survey (CDCS) on August 6, integrating AI, Synthetic Aperture Radar (SAR), high-resolution satellite imagery, drones, and machine learning for real-time agricultural data collection. The survey covers five pilot districts and feeds directly into the AgriStack Farmer Registry, linking digital land records with crop-level intelligence. Revenue officials across multiple states, including Assam and Sikkim, are being trained on AgriStack farmer enrollment and digital land record integration simultaneously. This represents a concrete operationalization of the L5 AgriStack vision — moving from policy to ground-level deployment with geospatial tech. (ETV Bharat) [L5: Sectoral]

Covering India’s Digital Public Infrastructure across all 7 layers. Published by DPI Watch.