- The ONDC project was commissioned by the Department for Promotion of Industry and Internal Trade (DPIIT) through the Quality Council of India (QCI).
- The ONDC initiative was introduced to promote the use of open networks for all the aspects of trade in goods and services over digital or electronic platforms.
- ONDC is developed based on an open-sourced model, using open specifications and open network protocols independent of any specific platform.
- ONDC is set to digitise the whole value chain, standardise operations, promote inclusion of suppliers, increase efficiency in logistics, and improve value for consumers.
- The ONDC platform is in the middle of the interfaces which has both buyers and sellers. It connects a buyer who searches for an item on the interface with the sellers who have listed that particular item.
- ONDC will have several backend partners such as logistics service providers, enterprise resource planners, e-commerce store hosting service providers, etc.
Aim of ONDC
- The project ONDC is mainly aimed at curbing “digital monopolies”.
- ONDC, using open specifications and open network protocols independent of any specific platform aims at promoting open networks developed on open sourced methodology.
Implementation of ONDC
- The task of Open Network for Digital Commerce has been assigned to the Quality Council of India (QCI).
- ONDC is to integrate e-commerce platforms through a network based on open-source technology.
- The Open-sourcing project is likely to be on the lines of Unified Payment Interface – UPI, therefore several operational aspects such as onboarding of sellers, vendor discovery, price discovery, and product cataloging could be made open-source by e-commerce platforms.
Significance of Open Network for Digital Commerce
- If the ONDC gets implemented and mandated, it would mean that all e-commerce companies will have to operate using the same processes.
- ONDC could give a huge booster shot to smaller online retailers and new entrants.
- If ONDC is mandated, it could be problematic for larger e-commerce companies, which have proprietary processes and technology deployed for these segments of operations.
- With a view to restrict the dominance of U.S. firms such as Amazon and Walmart in the fast-growing e-commerce market, India soft-launched its Open Network for Digital Commerce (ONDC) recently.
- The Central government believed that the Indian e-commerce market was worth more than $55 billion in gross merchandise value in 2021 and is expected to increase to about $350 billion by 2030.
- Following the success of its payments business in India because of the Unified Payments Interface (UPI), Google has shown interest in joining the ONDC.
- Currently, Google’s shopping business is limited to being an aggregator of listings and doesn’t carry out order fulfilments like delivery, which the companies like Amazon do.