FMCG distributors urge PM to retain zero MDR on UPI payments
The All India Consumer Products Distribution Federation, representing over 4.5 lakh members, has opposed a proposed 0.4% MDR on UPI transactions. It seeks supply-chain exemptions, clarity on the Rs 1 lakh monthly receipt threshold and GST relief on payment charges.
What happened
All India Consumer Products Distribution Federation · FMCG distributors’ federation urged the PM to retain zero MDR on UPI, warning charges would erode thin
Key facts
- Over 4.5 lakh members
- 0.4% proposed MDR
- Rs 1 lakh monthly UPI receipt threshold
What changed
FMCG distributors’ federation urged the PM to retain zero MDR on UPI, warning charges would erode thin retailer and distributor margins. It seeks exemption for supply-chain UPI payments, clarity on the Rs 1 lakh threshold, and GST relief on payment charges.
Why this matters
A proposed 0.4% UPI MDR could compress already thin FMCG distribution margins, making exemption eligibility, the Rs 1 lakh receipt threshold and GST treatment immediate operating priorities.
What to watch
- Finance Ministry, RBI, NPCI or MeitY consultation paper specifying whether a 0.4% MDR proposal is under active consideration.
- Definition of the Rs 1 lakh monthly receipt threshold, including whether it applies per merchant, per UPI ID, per bank account or aggregated business receipts.
- Any announced exemption for kiranas, distributors, essential goods, government-supported merchants or low-value transactions.
- Union Budget or payments-policy allocation addressing UPI incentive subsidies and payment-network cost recovery.
- FMCG distributor association escalation, including coordinated UPI acceptance restrictions or formal submissions from major consumer-goods companies.