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In a move that offers significant relief to thousands of small online merchants, Amazon India has announced it will continue to waive referral fees for products sold under ₹1,000. The waiver, which was originally set to expire at the end of November, has now been extended through December 31, 2025.
For Amazon’s vast network of sellers, this is more than just a holiday bonus; it is a tactical response to a fiercely competitive market. The decision comes just days after rival Flipkart introduced a similar zero-commission structure for the sub-₹1,000 price bracket, intensifying the battle for India’s budget-conscious shoppers.
Why this matters for sellers
For those outside the immediate e-commerce loop, a “referral fee” is essentially the commission a platform charges a seller for every transaction. Depending on the category, whether it is apparel, home decor, or electronics accessories, this fee typically ranges from 5% to over 15% of the sale price.
By removing this cost for items priced below ₹1,000, Amazon is essentially letting sellers keep a much larger share of their earnings. For a small business selling a ₹900 handbag, saving a 10-12% commission can mean the difference between a break-even sale and a healthy profit. This is particularly critical for “Direct-to-Consumer” (D2C) brands and micro-entrepreneurs who operate on razor-thin margins and rely on volume rather than high per-unit profits.
The battle for the “Value” shopper
The timing of this extension is not a coincidence. The Indian e-commerce sector is currently witnessing a tug-of-war for the “value” segment, customers who primarily buy unbranded or affordable lifestyle products.
Meesho has long dominated this space with its permanent zero-commission model, which made it incredibly attractive to small suppliers from Tier-2 and Tier-3 cities. Flipkart recently aggressively countered this with its own fee waivers to stop sellers from migrating. Amazon’s decision to extend its waiver ensures it doesn’t get left behind. If Amazon remained the “expensive” place to sell, merchants might have moved their cheaper inventory elsewhere, leaving Amazon with a gap in its catalog.
Looking ahead to 2026
This isn’t the first time Amazon has adjusted its fees to stay competitive. Earlier in 2025, the company slashed fees for lower-priced items, acknowledging that the growth in Indian e-commerce is coming from smaller towns and budget purchases.
While this current relief is temporary, valid only until the New Year, it provides a crucial window for sellers to clear year-end inventory without worrying about steep commissions. The big question remains whether Amazon will be forced to make some version of this policy permanent in 2026 to match its rivals. But for now, at least until December 31, the cost of doing business on Amazon just got a little cheaper.
