Karnataka is planning to come up with a legal framework for setting up a regulatory sandbox which will allow technology entrepreneurs to test their products before going live.
Once operational, the state will be the first in the country to introduce such a law. So far, only regulators like Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI) and Insurance Regulatory and Development Authority (IRDA) have launched regulatory sandbox frameworks.
Under the 'sandbox' norm, companies can test the viability of their innovations in live situation before going for commercial launch.
"We are providing appropriate legal framework for supporting innovations. Recently, the state has set up Karnataka Innovation Authority under which a regulatory sandbox will be created," said BS Yediyurappa, Chief Minister of Karnataka addressing the 22nd Bengaluru Tech Summit here. "Our state is slowly moving from service (sector dominated economy) to product development-based economy."
Karnataka has also set an ambitious target to treble the size of its technology industry to around $150 billion in next five years from current level of about $50 billion. According to the CN Ashwath Narayan, Karnataka’s Deputy Chief Minister as well as the Minster for Information Technology and Biotechnology, this would help India to achieve the ambitious target of making India $1 trillion digital economy by 2025. The state presently accounts for around 40 per cent in India’s total IT exports.
Karnataka is also planning to set up a Technology Development Board that will fund ventures in the new technology domains like artificial intelligence, machine learning, big data and biotechnology among others. The board will have a mandate to support the overall R&D framework apart from facilitating right growth environment for captive centres (global in-house centres or GICs) of global firms.
Bengaluru, which is known as the Silicon Valley of India, houses around 1,400 GICs of most global multinational companies along with many R&D outfits.
"Bengaluru's role in achieving the $1 trillion digital economy will be critical. With an enabling environment, supportive government, large talent pool and rising startup ecosystem, the city is well-poised to lead from the front," said Mohandas Pai, chairman of Aarin Capital.