Amazon India slashes seller referral fees in retail growth push

By Deborah Mary Sophia

March 2 (Reuters) - Amazon will stop charging sellers in India referral fees for products under 1,000 rupees ($10.98), the company said on Monday, as it looks to attract more merchants to its online marketplace and get a stronger footing in the country's competitive e-commerce industry.

The move expands on Amazon's AMZN.O 'zero-referral fee' policy launched last year, which covered roughly 12 million products priced below 300 rupees and helped drive a 50% surge in new sellers joining Amazon in India. A referral fee is a commission that sellers pay to Amazon for each product sold.

The new structure, effective March 16, covers more than 125 million products, Amazon said, adding that it was also reducing some shipping charges.

"This move is designed to make selling on Amazon more lucrative and simpler, particularly for small businesses and entrepreneurs in tier-2 and tier-3 cities," said Amit Nanda, director of Selling Partner Services for Amazon India.

India has emerged as a crucial market for Amazon, thanks to a rapidly expanding internet user base that has fueled e-commerce growth in the world's most populous country.

But Amazon faces fierce competition in the region from Walmart-backed Flipkart and the retail arm of billionaire Mukesh Ambani's Reliance Industries RELI.NS, while quick-commerce players such as Eternal's ETEA.NS Blinkit and Swiggy's SWIG.NS Instamart have been grabbing market share rapidly.

Amazon said in December that it would invest more than $35 billion in India by 2030, looking to expand its AI infrastructure, but also with a focus on growing retail logistics and spurring small-business growth.

($1 = 91.0480 Indian rupees)