Amazon India has announced a major expansion of its zero-referral fee policy, eliminating commissions on products priced under ₹1,000 effective March 16, 2026. This covers over 125 million items across more than 1,800 categories, building on last year’s waiver for sub-₹300 products that boosted the seller base to nearly 1.7 million. Additional reductions include over 20% cuts to Easy Ship charges for items below ₹300, potentially saving sellers up to 70% on total fees. The strategy targets small businesses in Tier 2 and Tier 3 cities amid intense competition, aiming to increase listings, lower consumer prices, and accelerate volume growth in low-value categories.
Amazon India Intensifies Push for Seller Expansion with Sweeping Fee Reductions
Amazon India is rolling out one of its most aggressive seller support measures yet, eliminating referral fees entirely for all products priced below ₹1,000. This policy, set to take effect on March 16, 2026, dramatically broadens the scope of zero-commission selling on the platform.
Previously, in April 2025, Amazon introduced zero referral fees for items under ₹300, impacting roughly 12 million products. That initiative proved highly successful, driving a 50% increase in new seller registrations and contributing to the platform’s current seller base of nearly 1.7 million merchants. Growth was particularly strong among small businesses and entrepreneurs in Tier 2 and Tier 3 cities, where e-commerce adoption continues to accelerate.
The new expansion multiplies the zero-fee coverage more than tenfold, now encompassing over 12.5 crore (125 million) products. These span more than 1,800 categories, including everyday essentials such as apparel, footwear, earphones, home furnishings, kitchen appliances, furniture, toys, pet supplies, and fashion jewelry. By removing the referral fee—a commission typically calculated as a percentage of the selling price—sellers gain significant margin flexibility, especially on impulse buys and low-average-order-value items.
Complementing the referral fee elimination, Amazon is also slashing Easy Ship charges by more than 20% for products priced under ₹300. Easy Ship, a popular fulfillment option where sellers handle packaging and Amazon manages delivery, becomes even more cost-effective. For multi-unit orders, additional savings of over 90% apply to the second and subsequent units in certain scenarios. Overall, these adjustments could reduce total selling fees by as much as 70%, depending on the category, product price, and fulfillment method chosen.
This move comes at a pivotal time for India’s e-commerce landscape. The market remains fiercely competitive, with players like Flipkart and Meesho vying for dominance in mass-market segments. Meesho’s zero-commission model has appealed to small sellers and price-sensitive consumers, particularly in non-metro areas. Quick commerce platforms are also capturing share in frequent, low-value purchases such as groceries, personal care items, and small household goods. By lowering barriers for sellers, Amazon aims to encourage wider product assortments, more competitive pricing, and higher sales volumes in these high-frequency categories.
Many sellers are expected to pass on a portion of these savings—potentially 50% to 100%—directly to consumers through reduced prices. This could make shopping on Amazon more attractive for budget-conscious buyers, helping retain them amid shifting preferences toward faster delivery options.
The focus on Tier 2 and Tier 3 cities underscores Amazon’s long-term strategy in India. These regions represent untapped potential, with rising internet penetration, smartphone adoption, and disposable incomes fueling online retail demand. Small businesses in these areas often face logistical and cost challenges; reduced fees simplify operations and improve profitability, encouraging more local entrepreneurs to join the platform.
Amazon executives have emphasized that operational efficiencies are being passed back to sellers and, ultimately, customers. The previous fee waiver demonstrated clear results in seller onboarding and category expansion. This broader rollout is designed to replicate and amplify that momentum, positioning Amazon for sustained growth in a market where volume often drives profitability more than high margins on individual sales.
For sellers, the changes offer immediate relief in a cost-sensitive environment. Categories with frequent purchases and lower price points—such as toys, stationery, casual apparel, and small electronics—stand to benefit most. Higher transaction frequency in these segments can lead to greater overall revenue despite thinner per-unit profits.
As the March 16 implementation approaches, sellers are already evaluating inventory expansions and pricing adjustments. The policy signals Amazon’s commitment to empowering its merchant ecosystem, particularly smaller players, as the company seeks to solidify its position in one of the world’s most dynamic e-commerce markets.
Disclaimer: This is a news report based on publicly available information. It is for informational purposes only and does not constitute financial, investment, or business advice.
