The Clothing Manufacturers Association of India has welcomed the postponement of a proposed 0.4% charge on selected UPI merchant payments above ₹2,000, warning that the levy could squeeze smaller retailers and complicate festive-season operations.
The Clothing Manufacturers Association of India has welcomed the decision to delay the planned merchant discount rate on select UPI person-to-merchant payments, saying the pause will spare retailers additional disruption during the busy festive period. In a statement cited by Textile South Asia, CMAI president Santosh Katariya said the deferment would help the sector navigate the season without operational strain, while giving the industry more time to adapt to the change. Reuters-style reporting from other Indian business outlets said the National Payments Corporation of India and the UPI and Services Steering Committee pushed back the rollout until after Diwali, with a fresh date to be announced later.
The move affects a 0.4% charge on certain UPI merchant transactions above ₹2,000, with the fee capped at ₹300 per transaction for higher-value payments. According to NPCI’s guidance reported by Livemint, person-to-person transfers are unaffected, and small merchants collecting up to ₹1 lakh a month through existing QR codes remain outside the charge. Business Standard reported that the levy had been due to begin on 15 October before the deferral was announced.
CMAI said the framework may appear modest in absolute terms, but it could still weigh on apparel retailers, especially smaller businesses already operating on narrow margins. The association argued that stores would need to adjust billing, accounting and staff training if the fee were introduced in the middle of the festive rush, and said businesses with limited back-office capacity would also face the added task of separating transactions above and below the ₹2,000 threshold for reconciliation. The group warned that, although the exemption covers most UPI merchant payments by volume, a larger share of apparel sales by value could still fall within the charge because basket sizes often rise during festivals and weddings.
The association urged the government and NPCI to reconsider the ₹2,000 trigger, widen the small-merchant exemption, and consider a tiered structure that reflects the size of the business. It also called for sufficient notice before any new start date is set and for a formal review after implementation. CMAI said it supports the continued growth of UPI and a payments system that remains financially sustainable, but added that the transition should not push smaller retailers away from digital payments or further compress their margins.
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