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Amazon will stop charging referral fees to sellers in India for products priced below ₹1,000, the company said on Monday, in a move aimed at attracting more merchants and strengthening its position in the country’s intensely competitive e-commerce market.
The decision significantly expands Amazon’s “zero-referral fee” policy introduced last year, which applied to products priced under ₹300. That earlier initiative covered around 12 million items and led to a 50% jump in new sellers joining Amazon’s Indian marketplace. Under the new structure, effective March 16, more than 125 million products will qualify for zero referral fees. Amazon also said it is reducing certain shipping charges to further lower the cost of selling on its platform.
Referral fees are commissions that sellers pay Amazon on every product sold, and removing them can materially improve margins—particularly for small businesses operating at scale-sensitive price points.
Amit Nanda, Director of Selling Partner Services at Amazon India, said the move is designed to make selling on the platform simpler and more profitable, especially for entrepreneurs and small businesses in tier-2 and tier-3 cities, where price sensitivity and logistics costs are key barriers to growth.
India has become a strategic priority for Amazon as the country’s rapidly expanding internet user base continues to fuel e-commerce adoption. However, the U.S. tech giant faces stiff competition from Flipkart, backed by Walmart, and the retail arm of Reliance Industries. At the same time, quick-commerce platforms such as Blinkit and Instamart have been rapidly gaining market share by offering ultra-fast deliveries, raising competitive pressure across categories.
Amazon’s latest seller-focused move aligns with its broader long-term investment strategy in the country. In December, the company said it plans to invest more than $35 billion in India by 2030, spanning AI infrastructure, logistics expansion, and initiatives aimed at accelerating small-business growth.
By removing referral fees on a much wider range of products, Amazon is betting that lower costs for sellers will translate into deeper assortment, sharper pricing, and stronger engagement—key levers as competition in India’s e-commerce sector continues to intensify.
The decision significantly expands Amazon’s “zero-referral fee” policy introduced last year, which applied to products priced under ₹300. That earlier initiative covered around 12 million items and led to a 50% jump in new sellers joining Amazon’s Indian marketplace. Under the new structure, effective March 16, more than 125 million products will qualify for zero referral fees. Amazon also said it is reducing certain shipping charges to further lower the cost of selling on its platform.
Referral fees are commissions that sellers pay Amazon on every product sold, and removing them can materially improve margins—particularly for small businesses operating at scale-sensitive price points.
Amit Nanda, Director of Selling Partner Services at Amazon India, said the move is designed to make selling on the platform simpler and more profitable, especially for entrepreneurs and small businesses in tier-2 and tier-3 cities, where price sensitivity and logistics costs are key barriers to growth.
India has become a strategic priority for Amazon as the country’s rapidly expanding internet user base continues to fuel e-commerce adoption. However, the U.S. tech giant faces stiff competition from Flipkart, backed by Walmart, and the retail arm of Reliance Industries. At the same time, quick-commerce platforms such as Blinkit and Instamart have been rapidly gaining market share by offering ultra-fast deliveries, raising competitive pressure across categories.
Amazon’s latest seller-focused move aligns with its broader long-term investment strategy in the country. In December, the company said it plans to invest more than $35 billion in India by 2030, spanning AI infrastructure, logistics expansion, and initiatives aimed at accelerating small-business growth.
By removing referral fees on a much wider range of products, Amazon is betting that lower costs for sellers will translate into deeper assortment, sharper pricing, and stronger engagement—key levers as competition in India’s e-commerce sector continues to intensify.
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