TLDRs;
- Amazon expands zero referral fees to 125 million products boosting seller growth.
- The company pledges 35 billion dollars investment and faster Northeast delivery routes.
- Fee cuts respond to Flipkart and Meesho amid rising e-commerce competition.
- Lower costs and quick delivery target smaller cities and value-conscious buyers.
Amazon has announced a major expansion of its zero referral fee program in India, increasing coverage from 12 million products in 2025 to an ambitious 125 million.
The move is part of the company’s broader strategy to strengthen its marketplace presence and attract more sellers, especially in smaller cities where e-commerce penetration is still limited.
Abhinav Singh, who oversees Amazon’s operations in India and Australia, emphasized that sellers have responded positively to the fee reductions. E-commerce still accounts for only a single-digit share of India’s retail market, highlighting the significant growth potential for platforms like Amazon.
Investment and Logistics Boost Expansion
Beyond fee cuts, Amazon has committed over US$35 billion to India through 2030, supplementing nearly US$40 billion already invested. Part of this expansion includes an Amazon Air cargo route connecting Guwahati and Kolkata, which Singh says could accelerate shipments in India’s Northeast by up to five times.
Boston Consulting Group estimates India’s e-commerce market at US$120–140 billion today and projects it could reach US$280–300 billion by 2030. Growth is expected to be driven largely by around 440 million shoppers from smaller cities and emerging retail formats. These figures indicate that Amazon’s current push aligns with the country’s broader digital shopping trends.
Competitive Pressure Shapes Fee Strategy
Industry experts note that Amazon’s expanded zero referral fees are largely reactive, as rivals have already adopted similar approaches. Flipkart rolled out a near-identical zero-commission policy for products under ₹1,000 in November 2025, while Meesho has maintained a zero-commission model since 2021, capturing nearly 37% of India’s e-commerce orders by fiscal 2025.
This shift signals a broader change in the market: platforms are moving away from buyer discounts and focusing more on lowering costs for merchants. Early experiments by Amazon, such as waiving fees on products under ₹300, boosted new seller registrations by 50%, suggesting the wider rollout could have a similarly positive impact.
Hyper-Value Commerce and Quick Delivery
The expanded fee waiver also aligns with the rise of hyper-value commerce, which has grown from 5% to over 12% of India’s online retail market since 2021. Three out of five new buyers since 2020 come from Tier-3 cities or smaller towns, making affordability a key factor for marketplace growth.
Reducing referral fees on lower-priced items can encourage more sellers to join Amazon, while also helping the company compete with quick commerce platforms, which are projected to grow at more than 40% annually through 2030. While percentage-based referral fees are removed, fixed closing and shipping costs remain, suggesting that competition may increasingly focus on delivery speed and operational efficiency rather than just price.
Amazon’s expanded zero referral fees underscore the company’s long-term commitment to India and its strategic focus on lower-cost sellers and underserved regions. By combining fee reductions with major investments in logistics and infrastructure, Amazon aims to strengthen its foothold in one of the world’s fastest-growing e-commerce markets.
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