The Open Network for Digital Commerce (ONDC), a transformative initiative led by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry (MoC&I), Government of India (GoI), aimed at revolutionizing digital commerce in India.
- The initiative also aimed to promote open networks for all aspects of goods and services over digital or electrical networks.
- It was 1st launched as pilot project in April, 2022 in 5 Indian cities: New Delhi (Delhi), Bengaluru (Karnataka), Coimbatore (Tamil Nadu (TN)), Bhopal (Madhya Pradesh (MP)) and Shillong (Meghalaya).
About ONDC:
i.It is based on open-sourced methodology, which uses open specifications and open network protocols independent of any specific platform.
ii.It was incorporated as a ‘non-profit’, Section-8 company on December 31, 2021 with an authorized capital of Rs. 500 crore and was incubated at the Quality Council of India (QCI), an independent organisation with DPIIT.
- QCI was joined by Mumbai (Maharashtra)-based Protean eGov Technologies Limited as the co-founder for ONDC.
iii.It aspires to create a level playing field for sellers, buyers, and service providers across India, particularly Micro, Small and Medium Enterprises (MSMEs).
iv.It serves as unified platform where stakeholders can interact freely without constraints of exclusive ecosystems.
Key Investors of ONDC:
- India’s largest Public Sector Bank (PSB), State Bank of India (SBI);
- National Bank for Agriculture and Rural Development(NABARD);
- HDFC Bank Limited;
- Bombay Stock Exchange (BSE);
- Small Industries Development Bank of India (SIDBI);
- ICICI Bank Limited;
- National Securities Depositories Limited (NSDL), among others.
Key Objectives:
i.Democratization of Commerce: To break the monopoly of large e-commerce platforms by enabling interoperability across networks.
ii.Inclusivity: To promote small businesses, retailers, and local artisans to access the digital marketplace.
iii.Cost Efficiency: To reduce the cost of customer acquisition and transaction processing for sellers.
iv.Market Expansion: To fix regional and linguistic gaps, bringing untapped markets into the fold of digital commerce.
v.Customer Empowerment: To increase options for buyers by offering access to a wider array of sellers.
How ONDC Operates?
ONDC uses open network protocols to provide seamless interaction between participants. It allows buyers and sellers from various platforms to transact with each other using standardized APIs.
Key Components of ONDC:
i.Decentralised Architecture: ONDC does not own or operate e-commerce services like conventional platforms. It acts as an enabler for interconnectivity.
ii.Open Protocols: ONDC which is based on open standards, ensures that any seller or buyer platform complying to these protocols can participate.
iii.Role Segregation: Participants are categorised into different roles like: buyer applications, seller applications, and logistics providers, ensuring clear dissemination of responsibilities.
About MSME TEAM Initiative:
i.In June 2024, the Ministry of MSME launched a sub-scheme “MSME Trade Enablement and Marketing Initiative” (MSME-TEAM initiative) under the central sector scheme (CSS) “Raising and Accelerating MSME Performance”, with total budget outlay of Rs 277.35 crore for a period of 3 years up to March 2027.
ii.The primary objective of the scheme is to provide financial assistance to 5 lakh MSMEs across the country to onboard the ONDC platform, through Seller Network participants, for catalogue preparation, account management, among others.
iii.Out of the total target beneficiaries of 5 lakh MSMEs, 2.5 lakh (50%) MSMEs would be women owned MSMEs.
iv.As per the scheme, awareness workshops will be conducted preferably in Tier-2 and Tier-3 Indian cities and MSME clusters for greater outreach, especially among women and Scheduled Caste (SC)/ Scheduled Tribe (ST) owned MSMEs.
ONDC Startup Mahotsav:
i.In May 2024, Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry, organised the “ONDC Startup Mahotsav”, a 1st of its kind event held in New Delhi (Delhi).
ii.ONDC Startup Mahotsav is a unique collaboration between Startup India initiative and ONDC, both are flagship initiatives of DPIIT.
About DRC Portal:
i.In February 2024, ONDC in collaboration with QCI launched the DigiReady Certification (DRC) portal, which aimed to assess and certify digital readiness of MSME entities.
ii.The certification process examines various aspects of digital readiness, including the presence of important documentation, for online operations, proficiency in using software and technology, among others.
Key Initiatives to Promote ONDC:
i.ONDC has been organising awareness workshops in partnership with various industry associations like: Retailers Association of India (RAI),Federation of Indian Chambers of Commerce and Industry (FICCI), National Association of Software and Service Companies (NASSCOM), among others, across the country to educate the small sellers and businesses about ONDC and its benefits.
ii.ONDC has developed a Handbook to help sellers, especially 1st-time sellers succeed in digital commerce in 14 Indian languages.
- ONDC is in partnership with Bhashini to enhance app development and e-commerce in Indian languages.
iii.In 2023, ONDC has launched a Feet on Street(FoS) program to support the Network Participants (NPs), to identify and educate sellers about the benefits of ONDC.
iv.WhatsApp Bot “ONDC Sahayak” launched in 5 different languages to help sellers and buyers to get access of information about ONDC.
Key Accomplishments of ONDC:
Since its launch in 2022, ONDC has achieved significant milestones:
i.Pilot Programs: It has been implemented successfully in select cities like Bengaluru and Delhi.
ii.First ONDC Fair Price Shop: The Department of Food and Public Distribution (DoF&PD), GoI launched a pilot project to onboard the Fair Price Shops (FPSs) in Una and Hamirpur districts of Himachal Pradesh (HP) on the ONDC.
iii.Expansion of services and products available on ONDC network: The ONDC network was initially launched with only two categories i.e. Food and Beverage (F&B) and Grocery, and have gradually expanded to 11 more categories such as: mobility, fashion, beauty and personal care, home & kitchen, electronics and appliances, among others.
Awards and Recognitions:
i.Global IP Convention (GIPC) bestowed the ONDC with the “Disruptive Technology” award in 2023.
ii.It was awarded with the Start-up of the Year at 14th India Digital Awards (IDA)in New Delhi, Delhi in 2024.
iii.ONDC was honoured with the prestigious National Awards for e-Governance (NAeG 2024) under “Application of Emerging Technologies for providing citizen centric services” during the 27th National Conference on e-Governance (NCeG) held in Mumbai, Maharashtra in September, 2024.
About Open Network for Digital Commerce (ONDC):
Managing Director (MD) and Chief Executive Officer (CEO)- Thampi Koshy
Headquarters- New Delhi, Delhi
