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Ramesh Khandelwal, who represents Madhya Pradesh on the government-constituted board, said on Wednesday that the 0.4 per cent merchant discount rate, or MDR, on UPI transactions above Rs 2,000 was at odds with the government’s stated emphasis on ease of doing business. The charge is due to take effect on October 15.

Khandelwal said he would raise the issue at the next meeting of the National Traders’ Welfare Board and sought an immediate rollback in the wider interests of merchants and customers. He argued that businesses operating on thin margins could struggle to absorb the additional transaction cost and that some of the burden might ultimately feed into retail prices.

The National Payments Corporation of India has said the revised framework will apply to specified person-to-merchant UPI payments above Rs 2,000. The fee will be borne by merchants rather than consumers and will be capped at Rs 300 for transactions of Rs 75,000 or more.

Person-to-person transfers, including payments between friends and family, will remain free. Merchant transactions up to Rs 2,000 will also continue without MDR, while small merchants receiving up to Rs 1 lakh a month through UPI QR payments are exempt under the framework.

Specified categories including railway tickets, fuel, agriculture, utilities, telecom, insurance, credit-card dues and tax payments will attract a lower flat charge of Rs 5 on eligible transactions above Rs 2,000. The government has also advised banks to ensure that merchants do not directly pass the MDR on to customers.

The opposition from Khandelwal adds to broader concern among traders over the return of merchant charges to UPI after more than six years of a zero-MDR regime. A nationwide LocalCircles survey of more than 32,000 merchants and businesses across 242 districts found that only 17 per cent of respondents were willing to bear a 0.4 per cent MDR on payments above Rs 2,000, while 41 per cent said they were unwilling to pay any such fee.

Merchants have raised particular concerns about sectors where high-value digital payments are common but margins are comparatively narrow. Textile traders in Surat, for example, said the levy could affect smaller businesses and workers who use UPI extensively for salaries, purchases and other routine transactions.

The policy change also marks a significant shift in the economics of the UPI ecosystem. Banks, payment applications and payment aggregators have long argued that the rapid expansion of transaction volumes requires greater spending on infrastructure, fraud prevention, cyber security and system capacity. The new MDR is intended to create a revenue stream to support those costs while keeping small-value and personal transfers outside the charging structure.

UPI has become the dominant retail digital payment system, with billions of transactions processed every month. That scale has increased the cost of maintaining the network even as users have become accustomed to making payments without a visible transaction fee.

The government’s approach seeks to confine the charge to larger commercial payments and to limit the exposure of small merchants and customers. Under the announced structure, a Rs 5,000 eligible merchant payment would carry an MDR of Rs 20, while a Rs 50,000 payment would cost the merchant Rs 200. Payments of Rs 75,000 and above would face the Rs 300 ceiling.

Khandelwal’s intervention puts the focus on whether traders will accept those costs or seek alternatives such as cash, bank transfers or other payment methods. His position is that even a small percentage charge, when repeated across large transaction volumes, can become a meaningful operating expense.

The dispute is likely to centre on merchant margins, enforcement and whether businesses can absorb the levy without changing prices or payment preferences. Traders also want clarity on how exemptions will be identified at the point of payment, particularly where a business accepts UPI through multiple bank accounts, QR codes or payment service providers across different locations.

The regulatory relaxation allows fund managers more room to adjust the cash and futures legs of arbitrage trades while participating in the Closing Auction Session, people familiar with the change said. The move is intended to encourage funds that collectively manage a large pool of equity-linked assets to place orders in the auction rather than largely completing transactions beforehand.

The change addresses a central weakness that has emerged since the auction system was introduced on August 3 for shares with futures and options contracts. Trading during the closing window has at times been thin, leaving prices vulnerable to sharp moves when large buy or sell orders enter a relatively shallow order book.

Arbitrage funds are viewed as a potentially important source of balancing liquidity because they hold shares in the cash market while maintaining offsetting short positions in futures. That structure can enable them to sell stock when the closing auction is dominated by buyers, or buy when supply is heavy, without necessarily taking a directional market view.

SEBI has not issued a public circular detailing the latest operational flexibility. Existing mutual-fund rules require arbitrage schemes to maintain at least 65% of assets in equity and equity-related instruments, while their strategy is built around offsetting positions designed to capture differences between cash and derivatives prices.

The regulator’s intervention comes as it separately reviews the mechanics of the Closing Auction Session after volatile expiry-day moves raised concerns over price discovery and derivatives settlement. A consultation paper issued on September 12 proposed changes to the way settlement prices are determined when futures and options expire.

One option under consideration would blend the volume-weighted average price from the final 30 minutes of continuous trading with prices established in the closing auction. Another would temporarily retain the earlier 30-minute volume-weighted average methodology for derivatives settlement while the auction develops deeper liquidity.

SEBI has also proposed restrictions on order cancellations outside a specified range around the reference price, a shorter post-auction derivatives trading window and changes to the publication of indicative index closing levels during the auction. Public comments on those proposals are open until October 3.

The Closing Auction Session replaced the previous method of setting closing prices for eligible stocks through the volume-weighted average of trades during the last 30 minutes of normal trading. Under the new framework, eligible cash-market stocks move into an auction process late in the session, while equity derivatives continue trading until 3.40 pm.

The auction is intended to concentrate end-of-day orders and produce a closing price based on the level at which the greatest quantity of shares can be matched. Similar mechanisms are used in several major global markets, particularly for large institutional orders and benchmark-tracking flows.

Early trading under the system, however, produced unusually wide gaps between cash-market closing prices and futures values on some days. Those differences caused sharp one-day movements in the net asset values of arbitrage funds because the cash and derivatives legs of their portfolios were marked using prices generated under different trading conditions.

Fund managers and market participants have argued that broader institutional participation is essential if the auction is to deliver stable price discovery. Arbitrage funds, with assets of roughly ₹3.5 trillion according to industry estimates, represent one of the largest pools capable of supplying two-way liquidity without relying on outright directional bets.

The mutual-fund industry has also examined changes to futures valuation that would better align derivatives prices with the auction-determined cash close. One proposal would derive a theoretical futures closing value from the final cash-market price and the prevailing cash-futures spread, reducing temporary valuation mismatches in arbitrage portfolios.

The 256GB iPhone 18 Pro was listed on Pinduoduo at 9,099 yuan on Monday after platform and store incentives, compared with Apple’s official mainland China price of 9,999 yuan. The reduction is being funded through retailer subsidies and coupons rather than an official Apple price cut.

Pinduoduo’s offer combined a subsidised platform price with a 600-yuan store coupon, bringing the checkout cost to 9,099 yuan for eligible buyers. The listing indicated tens of thousands of orders and promised delivery by September 27, although availability and coupon access could change as the promotion continued.

Apple’s own online store and official channels continued to show the iPhone 18 Pro at the full 9,999-yuan starting price. Apple’s flagship store on Tmall was also focused on interest-free instalments rather than a direct reduction, while some other sellers were offering smaller incentives or trade-in-linked benefits.

Prices elsewhere were less aggressive. JD continued to display the 256GB model at 9,999 yuan when checked on Monday, while some Taobao offers relied on operator benefits, renewal subsidies or trade-in incentives. The variation showed that the headline reduction was not a uniform market-wide repricing of Apple’s newest Pro handset.

The early discount comes after Apple opened pre-orders in mainland China at 8pm on September 12. The iPhone 18 Pro and iPhone 18 Pro Max are due to go on general sale on September 18, placing the retailer promotion several days ahead of the formal release.

Demand signals were mixed across sales channels. Several configurations became harder to obtain shortly after pre-orders opened, with delivery estimates for some iPhone 18 Pro and Pro Max variants moving into late September or early October. That makes the appearance of a 900-yuan discount notable, but it does not by itself establish weak demand for the range.

Apple priced the iPhone 18 Pro from 9,999 yuan in China, while the iPhone 18 Pro Max starts at 10,999 yuan. Both models begin with 256GB of storage and are offered in 512GB, 1TB and 2TB versions. Apple is selling the phones in black, silver, glacier blue and burgundy.

The company unveiled the Pro models on September 9, introducing its A20 Pro processor and a 48-megapixel Fusion main camera with variable aperture. Apple has also highlighted improved battery life, upgraded on-device artificial intelligence performance and changes to the camera system as central features of the new generation.

The pricing move underscores the intensity of competition among China’s major e-commerce platforms during high-profile smartphone launches. Retailers commonly use flagship electronics to attract traffic, deploying platform subsidies, limited-time coupons and payment incentives that can push transaction prices below manufacturers’ official levels without altering the recommended retail price.

A similar pattern has appeared around earlier iPhone launches, when large platforms subsidised new models soon after pre-orders or sales began. Such promotions can narrow the gap between Apple’s premium positioning and the prices of competing high-end phones, while also giving platforms a way to compete for customers during launch periods.

The structure of Monday’s offer is therefore important. Buyers were not receiving a 900-yuan reduction directly from Apple. The lower price depended on incentives available through the retailer, and the final amount could vary according to coupon eligibility, payment method, membership status and stock.

Apple separately offers trade-in credits in China for customers exchanging eligible older iPhones. Its official programme provides credits ranging from 900 yuan to 8,300 yuan for qualifying devices, but those values depend on the model and condition of the handset being traded and are distinct from the retailer discount on a new iPhone 18 Pro.

Some local branches of the State Administration of Foreign Exchange have urged lenders to encourage businesses to increase hedging, extending a campaign that has pushed corporate derivatives use to record levels. The guidance targets companies with sizeable foreign-currency receipts or payments as the yuan trades near three-year highs.

The push reflects Beijing’s preference for companies to manage exchange-rate risk through forwards, swaps and options. SAFE has repeatedly promoted what it calls an exchange-rate risk-neutral approach, arguing that companies should focus on their underlying business and use hedging tools to reduce the effect of currency movements on earnings.

Corporate hedging has risen sharply this year. SAFE said enterprises used foreign-exchange derivatives covering 35.3 per cent of their currency transactions in the first half of 2026, up 5.3 percentage points from the full-year level in 2025. The contracted value of derivatives used for exchange-rate risk management reached nearly $1.4 trillion, an increase of about 40 per cent from a year earlier.

The regulator has also broadened access to hedging services. About 130 major domestic and foreign-funded banks can provide foreign-exchange derivatives to companies, while a SAFE database shared with lenders covers about 290,000 foreign-trade enterprises. Authorities have encouraged banks to expand online dealing channels and improve credit and margin arrangements for smaller businesses.

The effort also seeks more balanced corporate behaviour. The latest local instructions add to earlier informal guidance from the central bank and SAFE asking some lenders to lift corporate hedging ratios. Such measures are part of a wider effort to prevent companies from building large unprotected positions after periods when many exporters assumed the yuan would remain weak or move gradually.

That behaviour became more costly as the currency strengthened. The yuan has appreciated this year against the dollar and was trading near a three-and-a-half-year high last week, while global currency markets have been unsettled by changing interest-rate expectations, higher energy prices and geopolitical tensions. Exporters receiving dollars can suffer valuation losses when the yuan rises unless they hedge future receipts.

Beijing has simultaneously tried to avoid an excessive or disorderly rise in the currency. The People’s Bank of China removed a 20 per cent foreign-exchange risk reserve requirement on forward dollar purchases from March 2, lowering the cost of buying dollars forward after a strong yuan rally. The move gave companies and banks more flexibility while signalling that policymakers wanted to discourage one-sided appreciation expectations.

SAFE data show that China’s foreign-exchange market remains supported by large trade and capital flows. Banks recorded a $271.2 billion surplus in foreign-exchange settlement and sales in the first half. The regulator said the ratio measuring companies’ willingness to convert foreign-currency earnings into yuan stood at 65 per cent, while the ratio reflecting demand to purchase foreign currency was 61 per cent.

Foreign-exchange reserves rose to $3.438 trillion at the end of August from $3.419 trillion a month earlier. The yuan gained 0.49 per cent against the dollar during August, while the dollar weakened against a basket of major currencies, contributing to valuation changes in China’s reserve holdings.

Officials have stressed that greater hedging is intended to strengthen corporate resilience rather than direct the yuan toward a particular level. SAFE has said exchange rates are determined by market supply and demand and are difficult to predict, making risk management more important as two-way fluctuations become more common.

The regulator has reduced some transaction costs for smaller companies and encouraged financial institutions to simplify documentation for derivatives. Banks have been asked to use enterprise data to identify firms with foreign-currency exposure and offer products suited to their cash flows rather than promote speculative positions.