K’taka Passes Bill To Regulate Ecommerce Players Trading Agri Produce

The Karnataka Assembly has passed a legislation which will bring ecommerce platforms trading notified agricultural produce under the ambit of a licensing regime. 

As per news agency PTI, the Karnataka Agricultural Produce Marketing (Regulation and Development) (Amendment) Bill underlines rules for establishing and operating ecommerce platforms for selling certain agricultural products. Such platforms would be able to operate only after obtaining necessary licences.

“For example, DMart, BigBasket, Amazon and Udaan come in our ecommerce platform. They are doing business evading our legal provisions. We are bringing this law to regulate them from doing business without paying cess,” state agricultural marketing minister Shivanand Patil reportedly told the House. 

Patil also claimed that Udaan recently paid a fine of INR 25 Lakh for evading cess. 

According to the report, the bill defines an ”e-commerce platform” as an online medium that facilitates licensed traders to sell notified agricultural produce to licensed retail traders within the market area, strictly for consumer sales and not for resale or processing. 

In addition, it has also incorporated “warehouse service providers” and defined their duties. As per the bill, a warehouse service provider is an entity that “charges a service fee only from the buyer of the notified agricultural produce, with a cap of 5% of the sale price for fruits, vegetables, and flowers, and two per cent for all other notified produce”.

Besides, the bill has put the onus on warehouse service providers to ensure the safe custody and storage of the seller’s goods and provide adequate insurance coverage against certain natural calamities. Patil also noted that the norms also give the power to regulate warehouse service providers to the local agricultural produce market committee (APMC) director. 

The move is expected to have a direct bearing on ecommerce platforms that source their agricultural produce directly from farmers in the state. 

This comes at a time when quick commerce and ecommerce platforms are already locked in pitched battles with distributors and retailers. Last week, the All India Consumer Products Distributors Federation (AICPDF) approached the Competition Commission of India (CCI) to file a complaint against quick commerce players like Blinkit, Zepto and Swiggy Instamart alleging unfair pricing and for monopolising the market.

At the time, the AICPDF also claimed that quick delivery players were impacting the competition in the market by indulging in exclusive supply chain and distribution agreements.