Amazon Seller Fee Cuts in India: Zero Referral Fees Up to ₹1,000 — What Sellers Need to Know

Amazon India has made a major change to seller economics — and low-priced products are at the center of it.

The move comes as Amazon and Flipkart compete aggressively for sellers and shoppers outside India's biggest metros.

What Changed: Amazon India's Expanded Fee Cuts

More products can now be sold without referral fees. Amazon previously offered zero referral fees on products below ₹300. The new structure extends that benefit to products priced up to ₹1,000 across more than 1,800 categories.

That includes everyday products such as:

• T-shirts and shoes
• Earphones
• Sarees and fashion jewellery
• Bed sheets
• Electric kettles
• Coffee tables and chairs
• Toys and pet accessories
• Kitchen, beauty, and grocery products

Amazon says the coverage has expanded more than 10×, from around 1.2 crore products in 2025 to more than 12.5 crore products in 2026.

Amazon's message to sellers: lower selling costs can create more room for competitive pricing, reinvestment, and growth.

There are additional savings, too. Easy Ship fees for products below ₹300 were reduced by more than 20%, while Amazon says sellers shipping multiple units in one box can save 90%+ on selling fees for the second unit onward.

Flipkart's Counter-Move: Zero Fashion Commissions

Amazon isn't making this move in isolation. In July, Flipkart expanded its Zero Commission model across every fashion category and price point. The company said the change is designed to help sellers retain more revenue and reinvest in growth.

That creates an increasingly competitive seller landscape:

The broader message is clear: marketplaces are competing not just for shoppers, but for sellers and their product selection.

Why It Matters: The Small-City Ecommerce Shift

The biggest opportunity may be outside India's largest cities. Amazon has increasingly pointed toward Tier-2 and Tier-3 markets as a major growth engine. During Prime Day 2026, more than 70% of new Prime sign-ups came from Tier-2 and Tier-3 cities.

That matters because lower-priced products are particularly important in markets where customers remain highly price-conscious. Lower seller fees can give brands more flexibility to:

• Reduce selling prices
• Protect existing margins
• Increase advertising investment
• Expand low-ticket product ranges
• Test new markets
• Offer promotions without destroying profitability

But lower fees don't automatically mean higher profits. Sellers still need to account for shipping, returns, advertising, storage, taxes and other marketplace costs.

Market Data: What the Numbers Show

Amazon also reported that its previous fee reduction was followed by 50% year-on-year growth in new sellers joining Amazon.in.

The numbers suggest that reducing seller costs is not simply a pricing exercise. Amazon is using lower fees to encourage more businesses, more products and more marketplace activity.

The Competitive Landscape Behind the Cuts

This is bigger than a referral-fee adjustment. Amazon is competing with Flipkart, Reliance Retail and rapidly expanding quick-commerce platforms for India's increasingly digital consumer.

Amazon has also been pushing deeper into smaller markets while expanding its logistics and quick-commerce capabilities. Reuters reported that Amazon and Flipkart are both increasing their focus on smaller cities as competition intensifies.

For sellers, that creates an important opportunity.

Lower marketplace fees + growing non-metro demand = a reason to revisit products that previously looked marginal. A product that wasn't profitable at an earlier fee structure may now deserve a second look.

What Sellers Should Do Right Now?

Don't simply celebrate the fee reduction. Recalculate your business.

Immediate Seller Checklist

• ✅ Recalculate margins for every product priced up to ₹1,000.
• ✅ Review pricing to determine whether you should keep the savings, lower prices or reinvest in PPC.
• ✅ Check shipping costs, especially for products below ₹300 using Easy Ship.
• ✅ Identify low-ticket products that could now become profitable.
• ✅ Explore Tier-2 and Tier-3 demand instead of focusing only on metro customers.
• ✅ Review advertising budgets before automatically spending every rupee saved on PPC.

The real opportunity isn't "Amazon fees are lower." It's "which of your products become more profitable because of the change?"

How GrowithAmazon Can Help You Profit From Lower Fees

Lower seller fees can improve your economics — but only if you know where to use the savings.

Our team can help you:

• Recalculate product-level profitability
• Identify products benefiting most from the fee cuts
• Optimize pricing and promotions
• Evaluate Tier-2 and Tier-3 expansion opportunities
• Adjust PPC budgets around improved margins
• Build a more profitable low-ticket product strategy

The goal isn't simply to sell more because Amazon charges less. It's to make sure the fee reduction translates into better margins, stronger pricing, and sustainable growth.

Final Takeaway

Amazon's expansion of zero referral fees to products up to ₹1,000 could significantly change the economics of selling lower-priced products in India. With 12.5 crore+ products covered, growing Tier-2/3 demand, and an increasingly aggressive marketplace fee war, sellers have a window to rethink their catalog and pricing strategy.

Don't let the fee cut disappear into your next PPC bill. Recalculate, reposition and use the savings strategically.