Why Amazon is betting bigger on India as e-commerce growth shifts beyond metros

Company says e-commerce penetration remains low, with growth driven by smaller cities and rising consumer demand.

Amazon views India as a long-term investment market where e-commerce remains in its early stages, with significant scope for growth supported by macroeconomic fundamentals and rising consumer demand, a senior company executive said.

Abhinav Singh, Vice President – Operations, India and Australia at Amazon, said the company has expanded its ‘zero referral fee’ programme to 12.5 crore products, up from 1.2 crore items in 2025, and that the move has received an encouraging response from sellers.

“The response from the sellers has been very encouraging. They're excited not just with the fee reduction, but also excited to pass on those benefits to the customers, so customers in the marketplace can enjoy better prices,” Singh said.

He added that sellers are also able to improve margins under the revised structure.

Singh said Amazon continues to see India as a strategic long-term market, citing structural growth drivers.

“We have been very sure that for us being in India is a long-term investment… retail and within that e-commerce is just about getting started. It is a single-digit percentage of the overall retail market, and there is tremendous headroom for us to grow,” he said.

He added that demographic trends, economic growth, and infrastructure development support the company’s outlook.

“Amazon is very optimistic about the long-term potential in India. There is the demographic dividend… the GDP is growing at a rapid pace… and people are beginning to consume a lot,” Singh said.

According to a report by Boston Consulting Group (BCG), India’s e-commerce market, currently estimated at USD 120–140 billion, is projected to grow to USD 280–300 billion by 2030, with a shopper base of nearly 440 million.

The report said e-commerce would still account for only 7–8 percent of total consumer spending, indicating continued expansion potential.

BCG noted that category-focused platforms now account for over 60 percent of online spending, while horizontal marketplaces contribute just under one-third.

The report also highlighted the rise of quick commerce, social commerce, and community-led discovery models as drivers of increased adoption, particularly in smaller cities.

Amazon has committed to investing over USD 35 billion in India through 2030, adding to nearly USD 40 billion already invested in the market.

The December 2025 announcement said the investment would focus on expansion, AI-driven digitisation, export growth, and job creation.

Singh said growth is increasingly visible in Tier 2 and Tier 3 markets, where adoption continues to rise.

Amazon has built a nationwide logistics network covering all postcodes, including remote locations such as Havelock Island in the Andaman and Nicobar Islands and Majuli in Assam.

The company has partnered with Indian Railways, the postal network, airlines, and developed its own infrastructure to strengthen last-mile delivery, Singh said.

Amazon recently added a Guwahati–Kolkata route to its Amazon Air cargo fleet to improve connectivity in the Northeast.

The expansion is expected to increase delivery speeds by up to five times across states including Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura.

“With this expansion of the network, customers in the Northeast are going to enjoy speeds up to five times faster than what they've seen so far,” Singh said.

Singh said Amazon continues to prioritise speed, selection, convenience, and pricing for customers.

The company is also implementing measures to improve working conditions for employees at its fulfilment centres, sortation centres, and delivery stations.