The Karnataka Assembly has enacted a law bringing e-commerce platforms dealing in notified agricultural produce under a licensing framework.

State Agricultural Marketing Minister Shivanand Patil presented the bill in the assembly. He noted that previous regulations applied only to Agricultural produce market committee (APMC) yards, but the new law would now cover online trading platforms as well. He emphasized that e-commerce companies operating without following legal provisions would be held accountable.

This bill brings e-commerce platforms like D Mart, Big Basket and Amazon under its regulatory scope. After implementation these platforms will be required to pay a cess on the sale of agricultural products.

Shivanand Patil emphasized the necessity of stricter enforcement by citing a recent case involving Udaan (Indian B2B e-commerce platform), which was fined Rs 25 lakh for evading cess payments.

The bill also includes new provisions to regulate warehouse service providers. Previously the law only mentioned traders but now it explicitly defines warehouse service providers & their responsibilities. Their operation will be monitored by the APMC Director.

Warehouse service providers will now charge a service fee exclusively to the buyer with fees caped at 5% of the sale price for fruits, vegetables & flowers, and 2% for other notified agricultural produce. They are responsible for ensuring the safe storage of goods providing insurance coverage.

The amendment defines an e-commerce platform as an online marketplace enabling licensed traders to sell agricultural produce directly to licensed retail traders within a designated market area. These transactions must be solely for consumer use not for resale or processing.

There has been an ongoing conflict between quick commerce &e-commerce platforms and traditional distributors and retailers. All India Consumer Products Distributors Federation (AICPDF) filed a complaint with the Competition Commission of India (CCI) against quick commerce companies like Blinkit, Zepto & Swiggy Instamart accusing them of unfair pricing practices and market monopolisation.