Amazon India cuts reseller referral fees to boost retail business
In a strategic move aimed at enhancing its retail business in India, Amazon has announced a significant reduction in reseller referral fees. This change, effective from March 16, 2026, is part of Amazon’s ongoing efforts to attract more merchants to its online marketplace and solidify its position in the competitive e-commerce landscape of India.
Overview of the New Referral Fee Structure
Amazon will cease charging referral fees for products priced under 1000 rupees (approximately US$10.98). This initiative expands upon the company’s ‘zero-referral fee’ policy introduced last year, which had already covered around 12 million products priced below 300 rupees. This earlier policy contributed to a remarkable 50% increase in the number of new sellers joining the platform in India.
Impact on Sellers and Small Businesses
The new referral fee structure is designed to make selling on Amazon more appealing and straightforward, particularly for small businesses and entrepreneurs located in tier-2 and tier-3 cities. Amit Nanda, the director of Selling Partner Services for Amazon India, emphasized that this initiative aims to foster growth among smaller sellers who may have previously found the costs prohibitive.
Competitive Landscape in Indian E-commerce
India has emerged as a vital market for Amazon, driven by a rapidly growing internet user base that has significantly boosted e-commerce growth. However, Amazon faces intense competition from other major players in the region, including Walmart-backed Flipkart and the retail arm of billionaire Mukesh Ambani’s Reliance Industries. Additionally, quick-commerce companies like Eternal’s Blinkit and Swiggy’s Instamart have been rapidly capturing market share, further intensifying the competitive environment.
Amazon’s Investment in India
In December 2025, Amazon announced plans to invest over $35 billion in India by 2030. This investment aims to enhance its artificial intelligence infrastructure while also focusing on improving retail logistics and promoting the growth of small businesses. The company’s commitment to the Indian market underscores its recognition of the country’s potential for e-commerce expansion.
Expected Outcomes
The reduction in referral fees and the expansion of the zero-referral fee policy are expected to drive a surge in the number of sellers on Amazon’s platform. By making it easier and more cost-effective for small businesses to sell their products online, Amazon aims to create a more vibrant marketplace that benefits both sellers and consumers.
Conclusion
Amazon’s decision to cut reseller referral fees reflects its commitment to fostering a more inclusive and accessible e-commerce environment in India. As the company continues to invest in the region and adapt to the competitive landscape, it is likely to see continued growth and success in its retail operations.
Frequently Asked Questions
Reseller referral fees are commissions that sellers pay to Amazon for each product sold on its platform. These fees vary based on the product category and price.
The new fee structure eliminates referral fees for products priced under 1000 rupees, making it more affordable for small businesses to sell on Amazon. This is expected to encourage more entrepreneurs to join the platform.
Amazon plans to invest over $35 billion in India by 2030, focusing on enhancing its AI infrastructure, improving retail logistics, and supporting the growth of small businesses.
Note: This article is based on information available as of March 2026 and may be subject to change.
