Commerce and Industry Minister Piyush Goyal invited all big and small retailers to join the government-promoted Open Network for Digital Commerce (ONDC).

He mentioned that ONDC will promote local languages, products, and cultural heritage and create opportunities for small businesses. He added that ONDC will foster healthy competition, benefit consumers and contribute to the overall growth of the digital commerce ecosystem in India.

What is ONDC?

• The Department for Promotion of Industry and Internal Trade (DPIIT) has pioneered the initiative of Open Network for Digital Commerce (ONDC).

• ONDC is envisioned to bring together all of India’s e-commerce marketplaces on a single network and empower digital revolution. 

• It aims at promoting open networks developed on open sourced methodology, using open specifications and open network protocols independent of any specific platform.

• These open protocols would be used for establishing public digital infrastructure in the form of open registries and open network gateways to enable exchange of information between providers and consumers.

• The initiative has an objective of reimagining digital commerce with a focus on inclusiveness.

• Today, e-commerce markets work in silos, with each e-commerce platform connecting only its own merchants and customers to each other. ONDC will integrate these closed e-commerce ecosystems and allow each player to be discoverable to a wider market. 

• The network will increase value for all participants by collectively expanding the e-commerce market while retaining its competitive synergies.

• It is expected to digitise the entire value chain, standardise operations, promote inclusion of suppliers, derive efficiencies in logistics and enhance value for consumers.

• As Unified Payments Interface (UPI) is for digital payment domain, and as ‘http’ is for data communication on the World Wide Web, ONDC is intended to become the same for e-commerce in India.

• ONDC received its certificate of incorporation as a private sector non-profit company on December 31, 2021. 

• An advisory council has been constituted to advise the government on measures needed to design and accelerate adoption of ONDC.

Advantages of ONDC

• ONDC aims to go beyond the current platform-centric digital commerce model where the buyer and seller can use the same platform or application for transactions. 

• ONDC is a network-based open protocol that would connect all the buyers and sellers on the network thus bringing better visibility across the Business-to-Consumer (B2C) & Business-to-Business (B2B) landscape. 

• In the ONDC framework, consumers can potentially discover any seller, product, or service by using any compatible application or platform. This will increase the freedom of choice for the consumers and will enable them to match demand with the nearest available supply, allowing them to choose their preferred local businesses. 

• ONDC’s beta test in the city of Bengaluru is a major first step in operationalising a network approach to e-commerce as an alternative to a platform-centric approach. 

• The open network system will make the e-commerce landscape more inclusive, accessible, and experience-driven for all consumers and sellers, especially for small businesses that will exercise more freedom in business decision-making.

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