Amazon India has announced a reduction in the referral fees it charges sellers on its platform as part of a strategy to strengthen its retail business and encourage more merchants to sell online.
Referral fees are charges that Amazon collects from sellers for each item they sell on the marketplace. By lowering these fees across selected product categories, Amazon is making it cheaper for small and large sellers alike to do business on its platform.
Under the new structure, referral fees will be reduced for a range of categories including apparel, footwear, home goods and other consumer products. In some cases, fees have been cut by several percentage points. Amazon says the change will help sellers improve their profit margins and reinvest more into pricing, selection and customer service. The adjusted fee system is expected to take effect from March 2026 and will be reviewed periodically.
In a statement, Amazon pointed out that the Indian e-commerce market is highly competitive, with several players vying for market share. By lowering fees, Amazon aims to attract more sellers and deepen its product offerings, particularly in categories that are important for everyday shopping. This move is also part of Amazon’s broader plan to grow its retail sales and strengthen customer loyalty in India, where online shopping has been rapidly expanding.
Market analysts say that cutting referral fees could benefit thousands of existing sellers and encourage new ones to join the platform. Lower costs could help sellers offer better prices to customers, potentially driving higher sales volumes for Amazon overall. However, the impact on Amazon’s profitability remains to be seen, as reduced fee income could weigh on short-term earnings.
The decision comes at a time when global e-commerce growth is slowing compared with the rapid expansion seen during the pandemic years. In India, while online retail continues to grow, margins are tight and competition from other marketplaces and social commerce players is intense. Amazon’s fee cuts are seen as a strategic move to reinforce its position and build long-term seller partnerships.
Sellers on the platform have generally welcomed the changes, saying that lower fees will help them scale their business and remain competitive on price. Some sellers also noted that simplification of fee structures could reduce accounting complexity.
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