Retailers, apparel makers warn of price hikes
New Delhi - Retailers and clothing manufacturers are warning of potential price hikes in the lead-up to the festive season, despite government assurances that they cannot directly pass on the 0.4% merchant discount rate (MDR) levy to consumers. The levy, implemented on September 14 and 15, will remain effective from October 15 and will be capped at ₹300 for transactions above ₹75,000.
Despite the government's clarification, executives from the Retailers Association of India (RAI) and the Clothing Manufacturers Association of India maintain that retailers will likely implement the higher price tags despite the prohibition. The increased costs are attributed to inflation and higher logistics expenses due to disruptions caused by the West Asia war.
Retailers, who cater to a wide range of consumers, anticipate that the festive season will see many transactions above ₹2,000, the threshold for the levy. They plan to either raise prices or offer lower discounts to offset the additional costs. Industry experts express concern that the MDR could disproportionately affect smaller retailers with thin margins, potentially driving transactions towards cash payments instead of digital platforms.
Written by urgent.news from The Economic Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
