NEW DELHI: Swiggy and Eternal (formerly Zomato) told stock exchanges that India’s new labour codes, rolled out Friday with immediate effect, would not have any “material impact” on their business. But analysts say the math points the other way: once the mandated contributions kick in, the Code on Social Security 2020 (CoSS), levy is likely to push up operating costs across food delivery and quick commerce—at a time when both platforms have little room to absorb fresh shocks. Under the Code on Social Security, 2020, platforms must contribute 1-2% of annual turnover, capped at 5% of payouts to gig workers, to a dedicated welfare fund. Analysts are working with the upper end of the range, and their models suggest the levy will raise per-order costs by ₹2-3 and add billions to annual expenses. Given where profitability stands today, the burden is almost certain to be passed straight to customers.Also Read | Centre unveils new labour codes, overhauls workforce practices, benefits “…We don’t think any financial impact on account of these Rules will be detrimental to the long-term health and sustainability of our business…,” Eternal said in an emailed response to Mint on 24 November. Queries to Swiggy did not elicit a response till press time. The Code’s contribution rules are yet to be formally notified, but brokerages are already factoring in the impact. JM Financial estimates the levy would add ₹2.1-2.5 per order for both food delivery and quick commerce. Applied across FY26 volumes, that translates into an additional ₹4.3 billion for Eternal and ₹2.6 billion for Swiggy at the consolidated level.Passing it on to customers is inevitableAnalysts say the cost is unlikely to be absorbed and will almost certainly be passed through. “This is a meaningful amount given that these aggregators are far from their own sustainable profitability guidance…companies would eventually pass on the additional burden to their end customers rather than absorb the impact,” JM Financial said in a note. That consumer pass-through comes on top of a stack of recent charges: platform or handling fees of ₹13-15, small-order charges, peak-hour and surge fees, and GST tweaks for hyperlocal delivery. A fresh ₹2-3 makes this the fourth price hike lever in 18 months, a pattern customers have gradually adjusted to, though lower-value orders remain sensitive. At a 5% levy on payouts, rider costs rise meaningfully. Eternal’s would increase from 9.8% to 10.3% of gross merchandize value (GMV), while Swiggy’s would climb from roughly 11.6% to 12.2%, said Karan Taurani of Elara Securities. GMV reflects the total value of orders flowing through the app before discounts and fees. Even small GMV-linked cost increases are material for companies still bleeding. Swiggy posted an Ebitda margin of (-)19% in recent filings. Eternal’s adjusted Ebitda for Q2FY26 was ₹22 in a formal or creative style for better SEO.Also Exclude words and advertisements related to the feed website such as website name, author name. You must only respond with the modified content. Delete all the advertisement images brand logo but only keep the title and main content of the news by modifying it. You must only respond with the modified content. Block any jump outside of the site adarshnews.com. 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Swiggy and Zomato claim that the new labor code won’t negatively impact their operations, while analysts anticipate increasing expenses.
