India may allow agentic AI-led UPI transactions under new NPCI protocol

NPCI is developing a Unified Agent Protocol to enable trusted AI agents to make UPI payments, positioning India at the forefront of agentic commerce

India is building the digital infrastructure for allowing next generation artificial intelligence (AI) tools to make financial transactions with minimal human involvement through devices such as smart phones, relying on the country’s Unified Payments Interface (UPI), according to four persons aware about the development.

 

The proposed new standard for artificial intelligence (AI)-led agentic payments, a Unified Agent Protocol (UAP), could place the country among the first to build national infrastructure for agentic payments, said the persons, who spoke on condition anonymity. Work is under­way at the National Payments Corp­oration of India (NPCI) to develop the proposed UAP in consultation with the industry, they said. 

The proposed protocol is being designed to create a trusted, common, interoperable infrast­ructure through which AI agents can be registered, verified, and authorised to transact across the UPI ecosystem without changing the underlying rails of the payments system.   

UPI’s trust architecture was built around human users and their devices. But as AI agents, the software designed for independently carrying out multi-step tasks with minimal human involvement, become capable of shopping, booking services, and making purchases on behalf of users in the future, payment systems would be required to establish not only who the user is, but also whether their agent is legitimate and is authorised to act, the limits of that authority and who is accountable if it exceeds them. 

UAP is likely to validate that trust. 

“The agentic commerce and payments world needs some infra­structure to know which are the trus­ted agents. All of this information around the agent needs to flow into a central repository, which itself would need to be regulated and trusted,” said one of the persons quoted above. 

An email sent to NPCI on July 2 seeking comments for the story rem­ained unanswered till press time. The launch of UAP, however, is likely to require a regulatory nod from RBI, the persons quoted above added.

 

Within the protocol, NPCI’s role by design, is expected to stop at the final stage of confirming if a payment request is genuine — it does not see what's being bought, similar to current UPI architecture. 

“NPCI wouldn’t get the data on what has been bought. Its job is to ensure trusted agents and it will hold logs of agentic transactions to just verify that trust,” a second person said. 

AI agents for users could originate from merchant apps, consumer-facing payment apps, AI assistants such as ChatGPT or Claude, or dedicated agentic platforms such as Hermes and OpenClaw. 

“The protocol is being designed after a lot of thinking. It is to ensure there is trust in payments; whether the right agent is transacting, instructions given to the agent are being followed, if the agent is verified. Payments and commerce remain separate,” said a third person. 

A senior executive at a digital payments firm said the industry expects low-consideration, frequent purchases — daily groceries, dairy, similar repeat buys — to be among the first automated as agentic transactions in India, a category where quick-commerce platforms are well placed to capture early demand. 

In the agentic world, the protocol seeks to preserve interoperability across the UPI ecosystem, sources said. 

This would allow agentic use cases to scale without requiring bespoke bilateral trust arrangements between individual participants. 

“A good thing about India is a lot of the underlying framework of how mandates function, how authentication works and other guardrails have been built. Translate them to the agentic world, and we would be in a far more advanced AI agentic market than other places,” said the executive. 

The focus on protocols also comes at a time when similar systems are taking shape globally such as Visa’s Trusted Agent Protocol (TAP), Google’s Agent Payments Protocol (AP2), OpenAI’s Agentic Commerce Protocol (ACP), Pine Labs Payments Protocol (P3P), and others. 

Industry participants said that existing systems for user-initiated payments flows such as chargebacks and dispute management should be in place in the agentic world. 

“How do we control a machine going rogue? We need all parties having that information if something goes wrong. This is a genuine issue. You should be able to review it if something goes wrong. That is the main concern we have to solve,” a person quoted above added. 

UPI itself grew to 22.71 billion monthly transactions (June 2026) processing a cumulative value of ₹28.92 trillion in the same month. And 63.5 per cent of those transactions were made in the peer-to-merchant (P2M) category. 

In the wake of NPCI’s move to build the protocol, digital payments majors in India told Business Standard they had decided against building a rival protocol of their own, choosing instead to work with the one NPCI was already developing. 

At the launch of Pine Labs’ protocol P3P last month, CEO Amrish Rau had said that India should not look to the West to determine the protocols governing agentic payment transactions.

Synthesising protocol

What the proposed Unified Agent Protocol (UAP) entails for AI-led payments

• Trust layer for AI: Verifies and authorises AI agents on UPI
• Built on UPI Circle: Uses delegated payments with spending limits
• Privacy preserved: NPCI verifies transactions, not purchases
• One common standard: Ensures interoperability across apps, agents
• Safety first: Focus on regulation, audit trails and dispute handling