Karnataka Plans Regulatory Sandbox Under Innovation Act

The Karnataka government has announced plans to establish a regulatory sandbox framework under the Karnataka Innovation Act to support responsible development of emerging technologies. The proposal comes amid rapid digital expansion in India, driven largely by rural internet adoption and increasing use of artificial intelligence-enabled services.

Regulatory Sandbox Framework Explained

The proposed regulatory sandbox will allow innovators, startups, and research institutions to test new technologies in a controlled environment. The objective is to balance innovation with accountability, safety, and public trust. The framework will enable experimentation while parallel long-term governance mechanisms are developed. Officials highlighted that such models are critical to ensure laws and regulations keep pace with fast-evolving digital technologies without stifling innovation.

Role of Karnataka in India’s Technology Ecosystem

The state government emphasised that Karnataka continues to position itself as a national hub for advanced technology. Accelerator programmes, deep-tech skilling initiatives, and expanded Centres of Excellence are being strengthened to build talent capacity. These initiatives aim to deepen collaboration between industry, academia, and government. The state is also contributing to the development of India’s national artificial intelligence architecture by building on-ground competencies and research capabilities.

Findings from Internet in India Report 2025

The Internet in India Report 2025 highlighted significant growth in the country’s digital user base. India recorded 958 million active internet users in 2025, marking nearly eight per cent year-on-year growth. Rural India emerged as the primary driver, now accounting for over 57 per cent of active internet users. Rural user growth was reported to be almost four times faster than urban growth. Increased adoption was attributed to short-video platforms, e-commerce expansion, and growing reliance on AI-powered digital services.

Important Facts for Exams

• Regulatory sandboxes allow testing of innovations under relaxed regulatory conditions.
• Rural India accounts for over 57 per cent of India’s active internet users.
• India had 958 million active internet users in 2025.
• AI-enabled features include voice search, chatbots, and image recognition.

AI Adoption and Digital Inclusion Trends

The report noted that 44 per cent of users have engaged with AI-enabled features such as voice search, image search, chatbots, and AI filters. Usage was highest among younger demographics. Short-video consumption reached 588 million users, while multi-device usage rose to 193 million users, reflecting broader digital inclusion. Industry leaders stressed that as digital infrastructure becomes central to economic growth across banking, payments, education, and healthcare, governance and transparency in AI deployment must scale alongside technological expansion.