Amazon India eliminates referral fees to capture Rs1,000 price segment
02 March 2026, Mumbai
In a decisive maneuver to consolidate its position in the high-frequency value segment, Amazon India has announced the elimination of referral fees for products priced under Rs 1,000, effective March 16, 2026. This policy marks a significant tenfold expansion of its 2025 pilot, which initially targeted items under Rs 300. By removing commissions - which typically range from 2 per cent to 16.5 per cent - across over 1,800 categories including apparel, footwear, and fashion accessories, Amazon is directly challenging the zero-commission models of rivals like Meesho and Flipkart’s Shopsy. Internal projections suggest that for a fashion jewelry item priced at Rs 999, sellers could realize a 69 per cent reduction in total marketplace expenses, fundamentally altering the unit economics for MSMEs operating in Tier II and Tier III cities.
Logistics optimization and the tier-II growth engine
The 2026 fee restructuring extends beyond commissions to address the rising cost of ‘Easy Ship’ logistics, which will see a 20 per cent reduction for ultra-low-cost items. This is paired with a new multi-unit incentive where sellers receive a 90 per cent discount on selling fees for additional items shipped in a single package. Amit Nanda, Director- Selling Partner Services, Amazon India, states, these structural changes are designed to improve seller profitability, enabling them to reinvest in product quality and faster delivery. With India’s e-commerce apparel market projected to hit $63 billion by 2030, Amazon’s pivot toward unbranded, mass-market ‘Bazaar’ products reflects a broader industry trend of prioritizing ‘celebratory comfort’ and affordable fast fashion over premium-only catalogues.
Amazon India serves as a primary digital gateway for 1.7 million sellers, over 90 per cent of which are small and medium businesses. Focusing on categories from electronics to ethnic apparel, the platform aims to digitize 15 million micro-enterprises by 2030. Following a 19 per cent revenue growth in FY25, Amazon is currently prioritizing AI-led seller tools and hyper-local logistics to sustain its 2026 growth trajectory.
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