Karnataka Passes Amendment Bill to Regulate E-Commerce Platforms

On March 10, the State Assembly passed the Karnataka Agricultural Produce Marketing (Regulation and Development) (Amendment) Bill, 2025, bringing e-commerce platforms such as Amazon, BigBasket, and D-Mart under its regulatory framework.

This amendment updates the provisions of the 1966 Act and defines an e-commerce platform as an online platform that facilitates licensed traders in selling notified agricultural produce to licensed retail traders in the market area, ultimately for sale to consumers for domestic consumption.

Additionally, the responsibilities of warehouse service providers have been clarified. The Amendment Bill imposes a cap on service charges and requires providers to ensure the safe custody and storage of agricultural produce, including fire safety measures and other necessary precautions.

The Amendment Bill outlines the framework for regulating e-commerce platforms, with the following key provisions:

• License for operating e-commerce platforms: To establish and operate an e-commerce platform for trading in notified agricultural produce such as rice, wheat, fruits, and vegetables, a license has to be obtained by making an application to the Director of Agricultural Marketing and paying the prescribed fee and security deposit.
• Obligations: E-commerce platforms can only allow licensed traders to register. E-commerce platforms can only allow licensed traders to register. They are also required to ensure transparency in their operations and decision-making related to all trading activities.
• Submission of periodical reports and returns: Licensees must maintain records of all the transactions on the e-commerce platform and submit periodical reports and returns at such times and in such forms as specified.
• Cancellation of license: The e-commerce platform license may be suspended or cancelled if it was obtained through fraudulent means, if the license holder becomes insolvent, or for any other reasons as prescribed.
• Appeals process: Any individual aggrieved by an order of the Director of Agricultural Marketing may prefer an appeal to the Karnataka Appellate Tribunal within thirty days of receipt of the order.
• Dispute redressal: A complaint regarding payment-related or other disputes between the e-commerce platform licensee, licensed trader, or buyers must be addressed to the Director of Agricultural Marketing.
• Penalties: The Amendment Bill includes penalties for non-compliance with licensing requirements or obligations, including imprisonment for up to six months, a fine of Rs. 1 lakh, or both.

With the new changes, e-commerce companies that operate in violation of current legal framework will now be held accountable.