Blitz Bureau
THE Open Network for Digital Commerce (ONDC) is a transformative initiative by the Department for Promotion of Industry and Internal Trade (DPIIT) of the Ministry of Commerce aimed at democratising digital commerce. Launched in April 2022, ONDC is an initiative promoting open networks for all aspects of exchange of goods and services over digital or electronic networks.
It is based on open-sourced methodology, using open specifications and open network protocols independent of any specific platform. It envisions creating a level playing field for sellers, buyers, and service providers across India, particularly small and medium enterprises (MSMEs).
ONDC serves as a unified platform where stakeholders can interact freely without the constraints of exclusive ecosystems. By fostering open protocols and reducing dependency on monopolistic platforms, ONDC aims at catalysing innovation and inclusivity in the digital commerce landscape. With the vision to create an organisation with a startup mindset supported by the Government, ONDC was incorporated as a non-profit, Section-8 company and incubated at the Quality Council of India ((QCI). The QCI was joined by Protean as the co-founder for incorporation of ONDC.
ONDC objectives
The following are the key objectives of ONDC: Democratisation of commerce: Break the dominance of large e-commerce platforms by enabling interoperability across networks. Inclusivity: Empower small businesses, retailers, and local artisans to access the digital marketplace.
Cost efficiency: Lower the cost of customer acquisition and transaction processing for sellers. Market expansion: Bridge regional and linguistic gaps, bringing untapped markets into the fold of digital commerce. Customer empowerment: Increase options for buyers by providing access to a broader array of sellers.
ONDC employs open network protocols to facilitate seamless interaction between participants. The network enables buyers and sellers from different platforms to transact with each other using standardised APIs. The domains on the ONDC network include Food & Beverage; Groceries, Fashion & Footwear; Men’s Accessories; Home & Kitchen; Beauty & Personal Care; Health & Wellness; Gift Cards; Mobility; Financial Services; and Agriculture.
Benefits, collaborations
The implementation of ONDC is having a profound impact on India’s economy. This includes market democratization, economic growth, job creation, and consumer empowerment.
ONDC actively collaborates with multiple Government bodies to expand its reach and effectiveness. These include the Ministry of MSME; the Ministry of Commerce and Industry; Digital India Programme; Startup India; Quality Council of India; the Department of Fisheries, and the Ministry of Agriculture & Farmers Welfare and NABARD.
Micro, Small, and Medium Enterprises (MSMEs) form the backbone of India’s economy. ONDC provides them with a unique opportunity to overcome challenges such as limited digital reach and high platform costs.
ONDC protocols would standardise operations like cataloguing, inventory management, order management and order fulfilment. Thus, small businesses would be able to use any ONDC compatible applications instead of being governed by specific platform centric policies.
The Ministry of MSME launched a subscheme ‘MSME Trade Enablement and Marketing Initiative’, which aims at assisting five lakh MSMEs to onboard the ONDC platform, through awareness workshops which will include hand-holding assistance for onboarding onto ONDC.
Startup Mahotsav
The Department for Promotion of Industry and Internal Trade (DPIIT) organised the ‘ONDC Startup Mahotsav’, in May last year in New Delhi. The event symbolised the celebration and collaboration of two of DPIIT’s flagship initiatives – the Startup India initiative and ONDC. It witnessed participation of around 5,000 startups in hybrid mode. Over 125 ecosystem stakeholders including startups, unicorns and high growth businesses signed Letter of Intent (LoI) during the event.
These LoIs signify the potential of ONDC and the eagerness of leading startups of the country to collaborate with the platform.
The ONDC has taken various initiatives to increase awareness, adaptation and training among small businesses for fully leveraging the benefits of ONDC and become ONDC compliant. These include: workshops; virtual training & technical training sessions; a handbook in 14 languages; collaboration with Bhashini to improve app development and e-commerce in Indic languages; a Feet on Street programme; and a WhatsApp Bot called ‘ONDC Sahayak’
ONDC represents a bold step towards creating a fair, open, and inclusive digital commerce ecosystem in India. By addressing the challenges of monopolistic practices and empowering smaller players, it has the potential to transform the e-commerce landscape. The initiative is not just a technological framework but a visio.
Why has India initiated this revolution?
India has been a world leader in demonstrating the successfull adoption of digital infrastructures at the population scale, such as UPI, AADHAAR and more ONDC (Open Network for Digital Commerce) is yet another tech-based initiative to transform the way e-commerce functions in the country by enabling 3-commerce through an open protocol based on open-source specifications.
The initiative will not only facilitate the rapid adoption of 3-commerce but also boost and strengthen the growth of startups in India. By facilitating scalable and cost-effective e-commerce through the open protocol, ONDC will empower startups to grow collaboratively.
