India is preparing a framework that would let AI agents execute small digital payments on the Unified Payments Interface without requiring user approval for every transaction, according to three sources familiar with the matter cited by Reuters1,3. The proposed Unified Agent Protocol is expected to be unveiled at the Global Fintech Fest in Mumbai next week2,4.
The move would make UPI, the world's largest retail fast-payment system by transaction volume according to a 2025 IMF report, one of the first national payment infrastructures to support agentic AI payments7. UPI processed 24.51 billion transactions worth 29.82 trillion Indian rupees ($314.21 billion) in August, with Google Pay and Walmart's PhonePe accounting for roughly three-fourths of monthly transaction volumes6.
The National Payments Corporation of India, which operates UPI, had not responded to Reuters queries at the time of publication.
Under the proposed system, users would give an AI agent limited authority to make payments based on pre-set instructions, including rules governing when an agent can pay and how much it can spend, with built-in spending limits, identity checks, and audit trails. Low-value, frequent purchases such as groceries are expected to be among the first use cases, with e-commerce platforms positioned to capture early demand. Over time, AI agents could identify sale offers and discounts, place orders based on user-defined instructions, and make investments when specified price thresholds are met.
The protocol is expected to build on two existing UPI capabilities. UPI Circle permits a primary account holder to delegate payment authority to another user, a mechanism that could be adapted to designate a verified AI agent. Reserve Pay allows a customer to block a specified amount for multiple future debits; banks currently cap such blocks at 10,000 rupees ($105.44) for up to 90 days, though both the amount and validity period could be revised for agentic use.
NPCI is also expected to provide infrastructure for merchants to integrate directly and plans to build a liability framework governing agent-initiated transactions.
The initiative enters a competitive landscape. Mastercard completed its first authenticated agentic transaction in New Delhi in June and has developed Agent Pay, an infrastructure designed to let AI agents conduct payments with controls around trust, security, and transaction visibility. Visa is separately developing infrastructure for agent-led commerce in India. Earlier this year, fintech firm Pine Labs launched its own agentic protocol, P3P, which lets AI agents complete UPI payments after a single upfront authorization.
Leading payment companies have already launched agentic payment frameworks in the U.S., Europe, Singapore, and Australia. A rollout on UPI would put India among the first countries to have a national-scale infrastructure for such payments.
ANALYSIS By layering agentic capabilities onto an existing network that already handles billions of monthly transactions, NPCI would bypass the cold-start problem that standalone agentic payment protocols face: merchant acceptance and user trust are already embedded in UPI's rails. The practical effect is that AI agent developers building for the Indian market would gain a single, standardized payment interface rather than negotiating bespoke integrations with individual banks or card networks.