Small mobile phone dealers risk profit squeeze as UPI charges loom

The All India Mobile Retailers Association (AIMRA) has appealed to Finance Minister Nirmala Sitharaman, urging a total waiver of the upcoming 0.4% UPI Merchant Discount Rate (MDR) for India's small and medium mobile phone dealers. Representing more than 150,000 independent retailers, AIMRA warns that the fee threatens to gnaw away the already narrow profit bands of 0.75% to 1.5% that keep these shops viable.

If the MDR is imposed, a retailer handling UPI volumes between ₹10 lakh and ₹40 lakh per month would face an extra expense ranging from ₹4,000 to ₹16,000. This added outlay arrives at a moment when handset sales are sluggish and input costs are rising, potentially forcing many outlets to curtail operations or shut down.

AIMRA also cited the sharp escalation in entry‑level smartphone prices. Devices that were available for roughly ₹10,000 in early 2025 have now crossed the ₹17,000 mark, with projections indicating a possible rise to ₹20,000 by December 2026 due to higher component and memory costs.

The association's four demands are clear: a complete exemption from UPI MDR for small retailers, uninterrupted provision of low‑cost digital payment options, prior consultation with trade bodies before any new fee structure, and additional policy support tailored to the retail sector. AIMRA argues that protecting micro‑retailers from extra charges is essential for maintaining the health of India's digital payment ecosystem and the broader retail market.