Amazon Now Crosses $1 Billion Sales Run Rate; Govt Clarifies UPI Charges

Amazon Now Crosses $1 Billion Annualised Sales

Amazon's quick-commerce service, Amazon Now, has crossed a $1 billion annualised gross sales run rate in India, marking a major milestone for the company.

According to Amazon India country manager Samir Kumar, orders on Amazon Now have doubled every quarter since its launch. The company has also rapidly expanded its coverage and is now present in more than 60 Indian cities and towns.

The milestone comes as Amazon intensifies its competition with established quick-commerce platforms such as Blinkit, Zepto, Swiggy Instamart and Flipkart Minutes.

Amazon Now Expands Beyond Major Metros

Amazon's quick-commerce strategy is increasingly moving beyond India's largest metropolitan markets.

Amazon Now has expanded to several smaller cities and towns, including Tirupati, Guntur, Jalandhar, Vellore, Dharwad, Warangal and Berhampur. The service uses a network of more than 750 micro-fulfilment and urban fulfilment centres to support rapid deliveries.

Amazon plans to expand Amazon Now to 100 cities by Diwali, further increasing its presence in India's rapidly growing quick-commerce market.

Orders Doubling Every Quarter

The growth of Amazon Now has been driven by a sharp increase in order volumes.

Amazon said orders have doubled every quarter since the service was launched. The company has also reported strong engagement among Prime customers, while its expansion into smaller cities is helping attract more non-Prime users.

The company is also working to expand the range of products available through its quick-commerce network, covering groceries, personal care, beauty, fashion, home products, kitchen items and small appliances.

Amazon Targets 100 Cities by Diwali

Amazon is accelerating its expansion ahead of India's festive shopping season.

The company has said it is on track to reach 100 cities by Diwali. Amazon has also announced longer-term plans to expand its delivery-in-minutes network to more than 300 cities across India.

This expansion could significantly increase competition in India's quick-commerce sector, where delivery speed, product selection and fulfilment density have become important competitive factors.

Why Amazon Now's Growth Matters

Amazon's rapid growth in quick commerce shows how consumer shopping habits are changing in India.

Customers increasingly expect everyday products to arrive within minutes rather than hours or days. This has encouraged companies to build local fulfilment networks closer to residential areas.

Amazon's scale in traditional e-commerce gives it an additional advantage in product selection, logistics and its existing customer base. However, maintaining fast delivery while keeping the business economically sustainable will remain a key challenge.

Government Clarifies UPI Charges

While India's quick-commerce sector is expanding rapidly, the government has also provided important clarity on UPI payments.

The Central government has stated that banks and payment system providers cannot impose charges on UPI transactions up to Rs 2,000. Payments made through RuPay debit cards are also protected from charges under the notified framework.

The clarification is significant because UPI has become one of India's most widely used digital payment systems.

UPI Payments Up to Rs 2,000 to Remain Free

Under the government's latest clarification, qualifying UPI transactions of up to Rs 2,000 will remain free for users.

The measure is intended to ensure that small-value digital payments continue to remain accessible and affordable. It also supports the government's broader objective of encouraging digital payments across the country.

For consumers, this means routine UPI payments within the Rs 2,000 threshold will not suddenly attract a transaction fee from banks or payment system providers.

What About UPI Payments Above Rs 2,000?

The government's notification has also fuelled discussion about Merchant Discount Rate (MDR) on higher-value UPI merchant transactions.

The government has maintained the zero-charge protection for UPI transactions up to Rs 2,000, while the structure for higher-value merchant payments has been addressed separately through the emerging MDR framework.

The important distinction is that MDR is a merchant-side payment processing charge and is not the same as a direct fee imposed on consumers for making UPI payments.

UPI Charges and Consumers

For everyday users, the government's clarification provides greater certainty.

Person-to-person transfers and small-value merchant payments continue to be protected from charges under the current framework. The policy is designed to prevent small digital transactions from becoming more expensive for consumers.

The distinction between consumer charges and merchant-side MDR is therefore important when discussing the future of UPI fees.

Why UPI MDR Is Being Discussed

UPI has experienced enormous growth in transaction volumes, creating significant costs for payment infrastructure, technology, security and settlement systems.

The emerging MDR framework is intended to provide a more sustainable financial model for eligible higher-value merchant transactions while preserving free access for consumers and small-value payments.

The latest framework announced by NPCI provides for a 0.4% MDR on specified person-to-merchant UPI transactions above Rs 2,000 from October 15, 2026, subject to specified exemptions and caps.

Small Merchants Get Protection

The new framework also provides protections for smaller merchants.

According to the announced structure, micro and small merchants meeting the specified eligibility criteria will continue to receive zero-MDR treatment, while certain sectors and transaction categories will have separate rates or caps.

This is intended to prevent additional payment costs from disproportionately affecting small businesses.

Two Major Digital Economy Trends

The Amazon Now and UPI developments illustrate two different but connected aspects of India's digital economy.

Amazon's rapid expansion reflects growing demand for instant commerce and faster delivery, while the government's UPI policy demonstrates the importance of keeping digital payments accessible while creating a sustainable financial structure for the payments ecosystem.

Both trends are likely to influence how Indian consumers shop, pay and interact with digital platforms.

What Consumers Should Know

Consumers should distinguish between a direct UPI transaction charge and MDR.

For UPI payments up to Rs 2,000, banks and payment system providers cannot levy charges under the government's latest clarification. Higher-value merchant transactions may be subject to the applicable MDR framework, but consumers are not supposed to be directly charged for the MDR.

At the same time, Amazon Now users can expect the company to expand its minutes-based delivery service to more cities and increase the range of products available through the platform.

Bottom Line

Amazon Now has emerged as a fast-growing player in India's quick-commerce market, crossing a $1 billion annualised gross sales run rate and expanding to more than 60 cities. With plans to reach 100 cities by Diwali and eventually expand much further, Amazon is stepping up competition in the country's instant-delivery sector.

Meanwhile, the government has clarified that UPI transactions up to Rs 2,000 cannot be subjected to bank or payment-system charges. As India considers ways to make the UPI ecosystem financially sustainable, the focus remains on protecting consumers and small merchants while introducing charges for eligible higher-value merchant transactions.