New Karnataka law brings e-commerce platforms under agricultural market rules

The Karnataka Assembly has passed the Karnataka Agricultural Produce Marketing (Regulation and Development) (Amendment) Bill, bringing e-commerce platforms like D Mart, Big Basket, and Amazon under state regulation when selling agricultural produce. Once implemented, these platforms will be required to pay a cess on sales of items like rice and dal.

State Agricultural Marketing Minister Shivanand Patil explained that while earlier laws applied only to Agricultural Produce Market Committee (APMC) yards, the new amendment extends these rules to online trading platforms. He stated that e-commerce companies operating without legal compliance will now be held accountable. "Platforms like D Mart, Big Basket, Amazon, and Udaan have been working outside our system. This amendment ensures they follow regulations and pay the required cess," Patil told the Assembly.

Key Changes Introduced by the Bill E-Commerce Regulation: Online platforms that allow licensed traders to sell farm produce will now be regulated. Sales must be for direct consumer use and not for resale or processing.

Cess Payment: Like traders in APMC yards, e-commerce platforms will now have to pay a cess on agricultural transactions, preventing revenue losses for the state.

Warehouse Regulation: Warehouse service providers, previously unregulated, will now be formally defined and monitored by the APMC Director, with an appellate authority handling disputes.

Electronic Payments: Farmers will now be able to receive payments electronically, making transactions smoother and reducing payment delays.

Warehouse Service Charges: Charges for storage services will now be capped—5% of the sale price for fruits, vegetables, and flowers, and 2% for other produce.

Storage and Safety Standards: Warehouse operators must store goods safely, provide insurance coverage against risks like fire and theft, and offer essential facilities such as fire-fighting equipment, digital weighing systems, and quality certification.

Minister Patil highlighted the need for stricter enforcement, citing a recent case where Udaan was fined ₹25 lakh for avoiding cess payments. The new law aims to ensure fair trade practices, create a level playing field for all agricultural traders, and secure farmers’ interests in the growing digital marketplace.