Almost all retail stores, even tiny ones, will accept credit cards. Many have upgraded their terminals to accept NFC (contactless), so you can use Apple Pay or Google Pay as well. However, you will run into some situations where merchants are unwilling or unable to accept foreign credit cards (because the fees they pay are higher or whatever), so this can be a problem sometimes and it's good to have some cash in hand most of the time. You may also find that you have to try more than one credit card until one works, as it seems acceptance and fraud monitoring vary widely by payment processors. Also auto-rickshaws and taxis will often ask for cash. Even if you use Uber / Ola they'll sometimes ask for payment in cash. Sometimes you can add tips (for restaurants, etc.) to your bill and pay by credit card, but tipping in most situations will only work with cash.
Summary: Credit cards will mostly work, but take along more than one, and always have backup cash - you can't do without cash.
Yes, ATM withdrawals will incur high fees, however, there's no alternative, really - you just have to plan ahead, estimate how much cash you might need for your whole trip, and manage your withdrawals to reduce the total amount of fees you end up paying. If you're left with some rupees at the end of your trip, you can keep some as a souvenir or for your next trip (but beware there is a limit on how much cash in rupees can be taken out of India), or give them to a friend, or blow them all in food and duty-free stuff at the airport.
Google Pay in India is a different app than Google Pay elsewhere. Google Pay for Indian users requires an Indian mobile number (and can only be used in India) and offers payment via the local UPI payment network using a local bank account. If you have Google Pay from outside India, you can use it to enable contactless payments with your credit cards, but you cannot use it for UPI payments. The QR codes for UPI payments are different from and incompatible with the QR codes used in (US-based) Google Pay for person-to-person payments. In India, if you pull out your phone to pay by NFC (contactless), the vendor may ask if you want to use "Google Pay" - and if you say yes, they'll pull up a UPI QR code which won't work for you. Always tell them you're using a credit card, to avoid this confusion over "Google Pay". Apple Pay apparently remains banned for Indian users, although you can use your Apple Pay if you're from outside India for contactless payments.