UPDATE 2-Google relists Indian apps in U-turn after government criticism

(Recasts with Google statement)

By Aditya Kalra and Munsif Vengattil

NEW DELHI, March 5 (Reuters) - Alphabet's Google will restore the Indian apps it deleted after a billing dispute, the company said on Tuesday, a reversal in stance following pushback from the government and local internet startups.

The U.S. firm on Friday removed more than 100 Indian apps, including popular ones by Matrimony.com, for not complying with its policy of paying a service fee when in-app payment options other than Google's are used.

"In the spirit of cooperation, we are temporarily reinstating the apps of the developers with appeals pending in the Supreme Court," Google said in a statement.

The decision was taken after a closed-door meeting between Google India head Sanjay Gupta and IT minister Ashwini Vaishnaw, a source familiar with the discussions said.

The app removals sparked criticism from Indian companies, many of which have been at loggerheads with Google for years.

The dispute centres on efforts by some Indian startups to stop Google from imposing a fee of 11%-26% on in-app payments, after the country's antitrust authorities ordered it not to enforce an earlier fee of 15%-30%. The startups have challenged Google's policy in courts, including the Supreme Court, and before the antitrust watchdog.

"We believe that in the coming months, both the start-up community as well as Google would be able to come to a long-term resolution," Vaishnaw told Reuters partner ANI after meeting Google.

Vaishnaw on Saturday criticized Google's decision to remove apps, saying it "cannot be permitted". (Reporting by Aditya Kalra in New Delhi and Munsif Vengattil in Bengaluru; editing by Louise Heavens and Christina Fincher)