Small and medium mobile phone retailers in India appeal to the finance ministry for exemptions from proposed UPI merchant discount rate, citing squeezed margins amid rising costs and softer demand.
Mobile phone retailers in India are pressing the finance ministry to spare them from any new charge on UPI payments, arguing that even a small fee could wipe out already narrow profit margins in a sector facing softer demand and higher costs.
The All India Mobile Retailers Association, which says it represents more than 1.5 lakh small mobile phone and electronics sellers, has written to Finance Minister Nirmala Sitharaman seeking an exemption for small and medium-sized outlets from any proposed merchant discount rate, or MDR, on UPI transactions. In its appeal, the group said many neighbourhood retailers operate on net margins of just 0.75% to 1.5%, leaving little room for an extra payments cost.
The association warned that a 0.4% MDR on UPI payments would add up quickly for traders handling large volumes of digital sales. It estimated that a store processing Rs 10 lakh to Rs 40 lakh a month in UPI transactions could face an extra cost of Rs 4,000 to Rs 16,000 each month if the charge is introduced. The group said that would hit survival margins at a time when mobile retailers are already dealing with weaker sales and rising operating expenses.
AIMRA also pointed to a sharp rise in handset prices, saying component and memory costs have pushed up the price of entry-level smartphones since November 2025. It claimed models that sold for about Rs 10,000 in 2025 are now around Rs 17,000 and could climb to Rs 20,000 by December 2026. The association wants a full exemption from UPI MDR for small and medium retailers, continued access to low-cost digital payments, and consultation with trade bodies before any fee structure is finalised.
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