Yup it is similar to google shopping www.google.com/shopping
I think they are still doing the same thing. Doesn't look like any products are actually sold by Amazon.
They're providing transaction processing, inventory tracking, and in some cases (e.g., http://www.amazon.in/gp/product/9380349300 selected at random from the gateway) fulfillment services.
Given the scope of their 3P seller business in other markets (say, the US), this constitutes a much larger entry into the market than some comments are making it out to be.