Amazon India Eliminates Commissions on Budget Items to Counter Growing Rivalry from Flipkart and Reliance

Amazon India eliminates referral fees for items under 1,000 rupees. See how this $35B strategy aims to outpace Flipkart and Reliance in the budget retail war.

By: AXL Media

Published: Mar 2, 2026, 4:40 AM EST

Source: The information in this article was sourced from CNA

Aggressive Commission Cuts Target India's Budget Retail Sector

In a major bid to dominate the world’s most populous consumer market, Amazon India has announced it will stop charging referral fees for all products priced below 1,000 rupees ($10.98). This expansion of the company’s "zero-referral fee" policy, which previously only applied to items under 300 rupees, represents a significant sacrifice of short-term commission revenue to secure long-term merchant loyalty. By removing the financial barrier for 125 million products, Amazon is positioning itself as the most cost-effective platform for high-volume, low-margin goods. Amit Nanda, Director of Selling Partner Services for Amazon India, stated that the move is specifically designed to simplify the selling process for entrepreneurs located in tier-2 and tier-3 cities.

Incentivizing Small Business Migration to Digital Platforms

The decision follows a successful pilot program launched last year that covered approximately 12 million low-priced products. According to company data, that initial fee waiver triggered a 50% surge in new sellers joining the platform, proving that commission costs were a primary hurdle for small-scale Indian manufacturers. By scaling this policy tenfold to include 125 million items, Amazon is attempting to create a massive "on-ramp" for traditional brick-and-mortar shops to transition into e-commerce. To further sweeten the deal for these new partners, the company also confirmed it is reducing certain shipping charges, effectively lowering the total cost of fulfillment for budget-conscious vendors.

Escalating Rivalry with Domestic Retail Giants

Amazon’s tactical shift comes as it faces intensifying pressure from Walmart-backed Flipkart and Mukesh Ambani’s Reliance Industries. These domestic heavyweights have leveraged deep local logistics networks and aggressive pricing to challenge Amazon’s early lead in the territory. While Amazon has been the traditional leader in premium electronics and global brands, the budget segment remains the primary battleground for capturing India's burgeoning middle class. By eliminating referral fees on sub-1,000 rupee items, Amazon is directly attacking the price sensitivity that defines the majority of Indian e-commerce transactions, attempting to undercut the strategic advantages held by its primary rivals.