Amazon India expands its zero-referral fee policy to products under 1,000 rupees, aiming to attract more sellers and strengthen its position in the competitive e-commerce market.
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| Amazon India’s new fee structure, effective March 16, covers over 125 million products as the company pushes to expand its seller base and compete with Flipkart and Reliance. Image: CH |
BENGALURU, India — March 2, 2026:
Amazon is stepping up its push to dominate India’s competitive e-commerce market by expanding its zero-referral fee policy, removing commissions on products priced under 1,000 rupees (approximately $10.98). The revised policy, effective March 16, will cover more than 125 million products and is accompanied by reductions in certain shipping charges, signaling a strategic bet on growing its seller base.
The move builds on last year’s initiative, which eliminated fees for around 12 million products under 300 rupees and helped drive a 50% surge in new sellers joining Amazon India. Referral fees, which sellers pay for each product sold, have traditionally been a major revenue source for the platform. By cutting these fees across a far broader range of products, Amazon India is aiming to make selling more lucrative and simpler, particularly for small businesses and entrepreneurs in tier-2 and tier-3 cities.
“This initiative is designed to support small merchants and make selling on Amazon easier and more profitable,” said Amit Nanda, director of Selling Partner Services at Amazon India. The approach reflects Amazon’s broader strategy of nurturing a diverse and engaged seller ecosystem, which has become crucial as the company seeks scale in India’s rapidly growing digital retail market.
India has emerged as a pivotal market for Amazon, thanks to its massive internet user base and expanding online shopping adoption. Yet, the company faces stiff competition from Flipkart, backed by Walmart, and the retail arm of Reliance Industries, controlled by billionaire Mukesh Ambani. Quick-commerce players such as Blinkit and Swiggy’s Instamart are also grabbing market share with ultra-fast delivery, adding pressure on traditional e-commerce platforms.
By reducing referral fees and shipping costs, Amazon hopes to expand its product catalog, attract more merchants, and encourage competitive pricing for consumers. The strategy is particularly aimed at smaller sellers in emerging cities, where e-commerce penetration is accelerating but logistics challenges remain.
This initiative complements Amazon’s long-term investment plans. In December, the company announced it would invest more than $35 billion in India by 2030, focusing on AI infrastructure, retail logistics, and small-business growth. The goal is not only to scale operations but also to strengthen the underlying technology and fulfillment networks that support its marketplace.
While the zero-referral fee expansion could drive seller growth and consumer adoption, it carries risks. Lower fees may squeeze short-term margins, intensify price competition, and pressure profitability, particularly as Amazon competes with well-funded local rivals and quick-commerce platforms. Regulatory scrutiny around foreign e-commerce investments also adds another layer of uncertainty.
Ultimately, Amazon India’s latest move highlights the importance of seller economics in the battle for digital retail supremacy. By making it more profitable for merchants to list products and easier for consumers to access affordable goods, the company is betting that marketplace scale, not short-term margins, will secure its lead in one of the world’s most dynamic e-commerce markets.