Maximum Retail Price (MRP) was introduced in India in 1990 through an amendment to the Standards of Weights and Measures (Packaged Commodities) Rules, 1976 by the Ministry of Civil Supplies. MRP was primarily introduced as a consumer protection mechanism to prevent exploitation in markets with fragmented supply chains by
- Preventing Black-Marketing and Price Gouging: In remote areas or during times of high demand (like a festival or a shortage), retailers might be tempted to artificially inflate prices. MRP sets a legal ceiling.
- Providing asymmetric Information Balance: Consumers often do not know the fair market value of packaged goods. The printed MRP gives them instant transparency and bargaining leverage.
It also provides governments with a clear, uniform baseline to calculate indirect taxes (like GST) at the manufacturing level rather than trying to track varying retail prices across millions of stores.
While designed to protect consumers, manufacturers and retailers use MRP as a highly strategic pricing and psychological tool to cheat the customers, at large.
Manufacturers frequently set an artificially high MRP. This allows retailers to offer massive, permanent “discounts” (e.g., “MRP Rs.100, Our Price Rs. 49”). It triggers a psychological sense of value and urgency in the buyer. Sometimes they print different MRPs on the exact same product depending on where it is sold. A bottle of water sold at a local grocery store might have an MRP of Rs. 20, but the same bottle destined for a luxury hotel, multiplex, or airport might have a printed MRP of Rs. 60 to legally justify higher margins.
Additionally, a high MRP gives manufacturers the flexibility to absorb sudden increases in raw material costs or supply chain disruptions without needing to constantly reprint packaging. By setting the maximum cap, manufacturers dictate the maximum profit a retailer can make, effectively maintaining control over their brand’s market positioning and preventing retail wars that could devalue the product.
Other major problems with the Maximum Retail Price (MRP) system include:
- Unpriced loose goods: Fruits, milk, flour, grains, and pulses are often sold without an MRP. Prices can fluctuate daily, and consumers in rural or remote areas may have fewer sellers to choose from. Limited competition can enable traders to overcharge, making effective government oversight important.
- Overcharging: Some retailers charge above the printed MRP or add unexplained fees. Consumers buying several items may not notice.
- Inflated MRPs: Manufacturers may set high MRPs for products sold through channels with limited competition, such as airports, or for goods consumers find difficult to compare. This can enable unusually high margins.
- Artificial discounts: A product with a fair market price of ₹100 might carry an MRP of ₹200 and be advertised at 40% off for ₹120. The customer pays 20% above the fair price but may believe they got a bargain.
- No standard rates for services: Consumers often have little basis for judging the cost of services, from plumbing and electrical work to legal representation. Published reference rates, like taxi fare cards, could help consumers compare prices, even if service rates cannot be fixed.
MRP gives governments a uniform basis for calculating indirect taxes such as GST at the manufacturing level, avoiding the need to track prices across millions of stores. But it can also be used as a pricing and psychological tool that disadvantages consumers.
Generally, manufacturers do set an artificially high MRP such that retailers can advertise steep “discounts” that make ordinary prices seem like bargains. The same product may also carry different MRPs for different sales channels, such as grocery stores, hotels, multiplexes, or airports. A high MRP can further give manufacturers room to absorb cost increases without changing packaging and limit how retailers price a product, helping protect its market position. This is substantiated by the fact that retailers of consumer products invariably promote 50 % or higher discounts or evenbroadcast “Buy one get one oreven two free”. Such promotions are not possible unless the profit margins are very high.
Recently in April 2026, Zee News exposed a massive profiteering scam on its prime-time show DNA, revealing that basic medical equipment was being sold at up to 3,000% markups using inflated Maximum Retail Prices (MRP).Investigative reports showed items
like BP monitors, thermometers, and glucometers procured at low wholesale prices (such as Rs7 or Rs325) carried inflated retail MRPs reaching up to Rs 210 and Rs 1,750.Public
Impact: The expose highlighted how medical mafia and supply chain loopholes fleece ordinary citizens on everyday healthcare essentials.
It is encouraging to note that the Lawmakers and politicians across parties acknowledged the issue, calling for strict rate controls and standardized pricing parameters for medical devices akin to essential drugs. (Although the pricing of essential drugs also needs to be put to strict scrutiny).
Of late even the Maharashtra Food and Drug Administration (FDA) Commissioner Tukaram Mundhe, in addition to the exposure of Food Adulteration across Maharashtra, also, exposed massive price markups of up to 2,841% on essential medical consumables and surgical items in private hospitals. A state-wide audit by the Maharashtra FDA reviewed procurement invoices and patient bills across healthcare facilities. The survey found a huge gap between what hospitals pay to buy basic items and the printed
Maximum Retail Price (MRP) charged to patients:
- IV Infusion Sets: Bought for ₹11.05, billed to patients at ₹325 (a 2,841% markup).
- Routine Syringes: Bought for ₹6.75, billed at ₹57.20 (a 747% markup).
- Catheters: Bought for ₹29.41, billed at ₹310 (a 954% markup).
- IV Cannula Extensions: Bought for ₹22.50, billed at ₹424 (a 1,784% markup).
- Nebulizer Kits: Bought for ₹45, billed at ₹652.
- Hepa Breathing Filters: Bought for ₹50, billed at ₹473.
The above data is confined to medical emergency equipment only but the buck does not stop here. Presently, practically for all the products sold in the Indian retail markets, be it medicines, electronic, electric, mechanical or daily use products like clothing/garments, consumer goods or groceries etc., the MRPs are highly inflated. Does no body in the government look into the gross exploitation of the common man in the country.
Despite the remarkable progress our country has made over the past seven decades, it is worth recalling a warning issued in 1921 by C. Rajagopalachari—Rajaji, one of the most distinguished intellectuals among India’s freedom leaders. Writing from Vellore Jail, he cautioned that… “We all ought to know that Swaraj will not at once or, I think, even for a long time to come, be better government or greater happiness for the people. Elections and their corruptions, injustice, and the power and tyranny of wealth, and inefficiency of administration, will make a hell of life as soon as freedom is given to us. Men will look regretfully back to the old regime of comparative justice, and efficient, peaceful, more or less honest administration. The only thing gained will be that as a race we will be saved from dishonour and subordination. Hope lies only in universal education by which right conduct, fear of God, and love, will be developed among the citizens from childhood. It is only if we succeed in this that Swaraj will mean happiness. Otherwise, it will mean the grinding injustices and tyranny of wealth.”
(The writer is Former Fellow of the United Nations University.
ssapru@gmail.com)