Karnataka seeks private sector help to boost e-commerce investments

The state has had many tussles with e-commerce players in the past, the most well known being with Amazon India over the payment of taxes

To attract more foreign investments into the state, Karnataka will tap the burgeoning e-commerce sector. The state has sought ideas from the private sector to give the space a boost in the short term. 

During a meeting between Chief Minister Siddaramaiah and leading industrialists in the state, who are part of the ‘vision group for industries’, it was suggested the government develop a holistic e-commerce policy to drive more investments into the sector. Members of the group asked the government to seek the help of Sachin Bansal, executive chairman and co-founder of e-commerce giant Flipkart, to help frame such a policy. Bansal, a poster boy of India’s e-commerce revolution, is also a member of the vision group, which has Infosys founder N R Narayana Murthy and Biocon founder and chairperson Kiran Mazumdar-Shaw as members. 

“Seeing the e-commerce sector’s growing potential, we suggested a pragmatic and comprehensive policy be developed for the same. We suggest the government take the help of the private sector like Sachin Bansal who is already a part of the vision group. This sector will be a huge investment driver,” said Mazumdar-Shaw. 

Karnataka has had many tussles with e-commerce players in the past, the most well known being with Amazon India over the payment of taxes. The issue has restricted Amazon from signing up more sellers in the state, hurting business since Bengaluru is one among its largest markets in India. 

At that time, Bansal, too, had raised concerns over the lack of clarity for e-commerce firms in the state, especially when it comes to taxation. 

The meeting, which was the first of many between the state and the private sector, aimed to look at short-term measures required for furthering the growth of industries, which could be taken up within five or six months. 

The vision group for industrial development of Karnataka was set up so that the private sector and the government could together deliberate on the solutions on things ranging from Bengaluru’s crumbling infrastructure to boosting manufacturing in the state. The Chief Minister has formed five sub-groups within the vision group, to work towards coming up with solutions for industrial development at the state level and Bengaluru level, in areas like manufacturing of automobiles and aerospace, textiles and garments, and electronics and e-commerce. 

“These sub-groups comprise members within the vision group and will work out an action plan for short-term measures required for further growth of these sectors, which could be taken up within a period of five to six months,” said Siddaramaiah in a press release. 

Other suggestions made by the industry leaders include making use of the Invest Karnataka entity with the help of the private sector to attract more investments into the state and looking at ways by discussion with the private sector on how further ease of business can be delivered. The industry also suggested setting up a task force committee to ensure that implementation takes place faster.

“If there is no task force, all the announcements made will just remain budgetary. We should make sure it is implemented and in the correct way,” added Mazumdar-Shaw. 

The Chief Minister suggested the vision group bring out a comprehensive vision document, which will serve as a guide for future development of industry and related sectors in Karnataka.