If a transaction is cancelled by the merchant (not necessarily same as refund) then it is highly likely you will not pay currency conversion markup. If it is refunded then depending on network and issuing bank then you could pay the markup fees. Also the conversion rate might not be same for the debit and credit.
Mark up fee is calculated in amount i.e 2 Rupees and 50 paise per Rs. 100(usually markup fee has a range on which it is applied) spent on a foreign land where Indian currency sanctions are not available that means where the secondary currency is not Indian Rupees.
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