Swiggy brings back handling Fees on Instamart

Swiggy officially began rolling back its aggressive “zero-fee” campaign on Instamart, reinstating handling charges on all quick-commerce orders.

The move marks the end of a high-stakes price war experiment that Swiggy launched in late 2025 to compete with Zepto. Management admitted during their recent Q3 FY26 earnings call that the fee waiver had “limited adoption and retention” and failed to attract long-term sticky growth.

1. The Reinstated Fee Structure

The updated charges are now visible on the Swiggy app for all users, regardless of their cart value.

• Handling Fee: Instamart now charges a universal handling fee of ₹7 to ₹10 on every order.
• Surge Fee Rollback: Previously, surge fees were waived for everyone on orders above ₹299. Now, surge fee waivers are strictly restricted to Swiggy One subscribers.
• GST Impact: These fees are subject to the standard 18% GST, which was newly mandated for all delivery and platform charges in September 2025.

2. Why Swiggy Ended the “No-Fee” Era

The decision to bring back fees is a strategic pivot toward profitability as the company prepares for its next fiscal milestone.

• Reinvestment Failure: CFO Rahul Bothra revealed that Swiggy reinvested nearly ₹70–₹80 crore (roughly 90 basis points of margin) into the no-fee campaign. However, the expected surge in “quality” users did not materialize.
• Basket Size Decline: Instamart CEO Amitesh Jha noted that while order volumes grew during the waiver period, the average basket size actually decreased. Customers were placing frequent, small orders that were economically unsustainable for the platform.
• Breakeven Goal: Swiggy is targeting a contribution margin breakeven for its quick-commerce business by the end of Q1 FY27 (June 2026). To reach this, it needs to improve margins by 250 basis points over the next two quarters.

3. Competitive Comparison (Feb 2026)

Swiggy’s retreat from the fee war leaves a fragmented landscape in the quick-commerce sector:

• The Zepto Holdout: As of February 2026, Zepto is the only major player maintaining a handling fee waiver, though it recently raised its free delivery threshold from ₹99 to ₹149.

4. Impact on Swiggy One Subscribers

While the handling fee is now universal, Swiggy is using its Swiggy One subscription as the primary moat to retain users:

• One Benefits: Subscribers still get free delivery on orders above ₹199 and remain the only group exempt from surge pricing.
• The “Premium” Push: By making the app more expensive for casual users, Swiggy aims to push frequent buyers into the subscription tier, which provides more predictable revenue.

Conclusion: Profit Over Presence

The reinstatement of handling fees signals that the era of “growth at any cost” in Indian quick commerce is cooling down. Swiggy’s data suggests that customers who only shop when fees are zero aren’t profitable; by bringing back the fees, the company is betting that its convenience and speed are enough to keep the “sticky” customers who drive actual bottom-line growth.