Why Is Everything 80% Off?
Ever wondered why a ₹999 product is always 80% off? Is it a real deal or a retail scam? A system designed to protect consumers has become a tool for manipulation.
This is the definitive guide to understanding the past, present, and future of pricing in India.
The Past: A History of Price Control
The MRP system didn't appear overnight. It's the result of a long legislative evolution rooted in post-independence economic policy, designed to protect consumers in a very different India.
1975
A Parliamentary Standing Committee notes "exorbitant prices" in rural areas, highlighting the need for a uniform pricing mechanism to prevent exploitation.
1990
The concept of a mandatory MRP is formally introduced through amendments to the Standards of Weights and Measures Act, 1976.
2009-2011
The Legal Metrology Act (2009) and its Packaged Commodities Rules (2011) are enacted, creating the modern, robust legal framework for MRP as a mandatory price ceiling.
2017
The government amends rules to explicitly ban "Dual-MRP" to stop different prices for the same product in different channels. GST is introduced, simplifying taxes but adding "anti-profiteering" scrutiny.
The Present: Deconstructing a Broken System
The modern MRP system is plagued with fundamental flaws that harm consumers, distort fair competition, and create immense challenges for businesses.
a) Fake Discounts & Inflated Prices
This is the most common misuse. Brands deliberately inflate the MRP to offer huge, misleading discounts. This creates a false sense of saving, manipulating consumers into believing they've found a great deal when they might be paying more than the product's actual worth. It turns a consumer protection tool into a marketing gimmick.
b) Zero Transparency
The MRP on a package is an opaque number. Consumers have no way of knowing the breakdown of the price, including the real cost of production, packaging, logistics, taxes, or the profit margins involved. This lack of a clear, justifiable formula allows for arbitrary price inflation.
c) One Price for All Regions
A single national MRP is impractical for a country as diverse as India. The cost to transport a product to a metro city is far lower than to a remote village. This forces manufacturers to average out costs, making products too expensive in some areas while squeezing the margins of retailers in others.
The Great MRP Divide: Real-World Data
This isn't just theory. A quick look at popular FMCG products reveals staggering gaps between the printed MRP and the actual selling price across different platforms.
| Product | Printed MRP | Amazon Price | Zepto Price | MRP Gap* |
|---|---|---|---|---|
| Dove Body Wash (1L) | ₹849 | ₹407 | ₹552 | ~52% |
| MAGGI 70g (Pack of 12) | ₹180 | ₹173 | ₹168 | ~6% |
| NIVEA MEN Face Wash (100g) | ₹249 | ₹133 | ₹192 | ~47% |
*MRP Gap calculated based on the lowest selling price vs. printed MRP. Prices are illustrative and subject to change.
Amazon
₹999
Trendy Look, Online Hype
Relies on influencer hype ad online branding to sell at higher price-even if the quality is same or less.
Local Market
₹400
Same Design, Better Stitch
Same Kurti from same Surat/Ludhiana wholesaler. No brand tag, but way cheaper with better fabric quality.
From the Consumer's Desk: Real-Life Scams
"Paid ₹100 for a ₹20 water bottle at the cinema. They said it's a 'Cinema Pack'. It's a total scam!"
"Saw a product online for 70% off. The same item at my local store had a much lower MRP to begin with. The online 'discount' was a lie."
"The shopkeeper had put a new MRP sticker of ₹150 over the old one of ₹120. When I peeled it off, he got angry."
Case Study: The Biscuit Wars (Screenshot This!)
Let's take one product—a popular family pack of chocolate biscuits—and see how its pricing creates chaos and erodes trust across different retail channels.
One Product, Three Prices, Zero Trust
Product: TRESemme Pro Collection Keratin Smooth Shampoo 1 L
Amazon
Printed MRP: ₹1,616
₹899
Uses high MRP as an "anchor price" to make its 44% discount look attractive, driving online sales.
JioMart
Printed MRP: ₹1,762
₹881
Leverages massive scale to offer a consistently lower price, building a reputation for pure value.
Same Product Different MRP
Local Kirana Store
Printed MRP: ₹1,762
₹1,762
With thin margins, has no choice but to sell at MRP, making it look expensive and eroding customer trust.
Founder & Expert Soundbites
MRP abuse is why we launched at transparent pricing from Day 1. Fake discounts have ruined trust in our market. The new law forces us to get real—finally. Trust wins in the long run.
The biggest challenge isn't the law, it's the mindset. For years, Indian retail has been addicted to the MRP-discount game. This reform is a necessary detox for the entire ecosystem.
The Future: The Government's Blueprint for a Fix
To combat these issues, the government is proposing a multi-pronged overhaul aimed at injecting fairness and transparency back into retail pricing.
Cost-Based MRP
Mandate that MRP be linked to actual costs (production, packaging, logistics, tax) plus a reasonable, justifiable profit margin.
Suggested Price (SRP)
Consider shifting to a non-binding Suggested Retail Price, allowing healthy price competition among retailers.
QR Code Transparency
Require QR codes on packaging that reveal a full cost breakdown, empowering consumers with information.
Legal Upgrade
Strengthen the Legal Metrology Rules with stricter penalties for misleading pricing and inflated MRPs.
The New Price Calculator: Are You Compliant?
This simple tool helps you understand how a cost-based pricing model might work. Enter your product's total cost and your desired margin to see a calculated, compliant MRP.
The Ripple Effect: A Stakeholder Impact Analysis
These changes won't happen in a vacuum. Who wins, who loses, and what are the trade-offs? Select a stakeholder to see the potential impact.
The Fine Print: Risks, Loopholes & News from the Frontline
"Major FMCG Player Fined ₹1 Crore For Not Passing GST Benefits, Misleading Consumers On MRP"
- Recreated from a recent news report
a) Dual-MRP & The Hospitality Exception
A major loophole has been "dual-MRP," where companies make minor cosmetic changes to packaging to legally justify a higher price in channels like cinemas. Similarly, hotels and restaurants charge above MRP by claiming they sell a "service," not just a product, a practice upheld by courts that creates a significant legal gray area.
b) The E-commerce Standoff
E-commerce's dynamic, algorithm-driven pricing is in direct conflict with the static MRP. Online platforms have weaponized the MRP, using it as a high "anchor price" to make their discounts seem massive, creating unfair competition for offline retailers and accelerating channel conflict.
The Path Forward: Lessons for Entrepreneurs
Interactive Compliance Checklist
Actionable Takeaways
| What To Do Now | Why It Matters |
|---|---|
| Audit your SKUs for potential dual-MRP issues. | You might have illegal MRP splits that need immediate correction. |
| Prepare detailed, verifiable cost sheets for all products. | Future-proof your business against surprise audits and penalties. |
| Brief your packaging and design teams on upcoming changes. | Avoid costly, last-minute legal scrambles and redesigns. |
| Communicate your value proposition beyond price. | Transparency is the new currency. Build a brand that customers trust. |
Practical FAQs
Will I have to recall my old stock with the old MRP?
Likely not. In past transitions (like during GST), the government has allowed businesses to affix new stickers over the old MRP for a limited period. A similar grace period is expected.
How much profit margin is 'reasonable'?
The government has not defined a specific percentage. It will likely vary by industry and product category. The key will be the ability to justify your margin based on investment, risk, and innovation, rather than having it be an arbitrary number.
Do these rules apply to both local and imported goods?
Yes. The Legal Metrology Act applies to all pre-packaged commodities sold in India, regardless of their origin. Importers are responsible for ensuring compliance.
Roadmap to Reform: What's Next for the Law?
Late 2025
Draft reforms and amendments to the Legal Metrology Rules are expected to be released for public and industry comment.
Mid-2026
If discussions proceed as planned, the new rules could be officially notified and implemented, with a transition period for businesses.
2027+
Expect the first round of major enforcement actions and penalties against non-compliant businesses as the new regime takes full effect.
