However, UPI is not "open" in the true sense (you can't have an app running on linux or AOSP for instance). It's locked to certain apps, which apparently need license from GOI. The whole Indian banking system is also too reliant on SMS + TOTP.
That UPI locks people to US proprietary systems, while GOI also has been making noises on tech monopolies, is apparently an irony not apparent the babucracy.
The number of available UPI apps today exceeds 100. Some of the big ones are created by US companies, sure, but many are created by Indian/non-US-owned companies. There is no lock-in though.
Also, UPI is not on Windows/MacOS either, so it’s not correct to infer that it’s “not open” simply because it doesn’t run on Linux. It was designed from the start to be a mobile payment system, and there are good reasons for that (more on this below).
The reason it doesn’t work on AOSP is, I presume, due to security concerns related to rooting (similar to why it doesn’t work on older known-insecure versions of Android/iOS). The security/fraud prevention mechanisms rely on proving that your device has a SIM card with the phone number linked to your bank account - and the same phone number is tied to your identity via Aadhaar. These guarantees are presumably much harder/costlier to ensure on such devices.
EDIT to add: There is also an economic angle here: the above description of reliable, low-cost KYC in UPI also reduces the cost of operating the network (both directly by simplifying KYC, and indirectly by making fraud harder).
Source: I work on a UPI app (although I am by no means a security expert).