Open Network for Digital Commerce

[GS Paper 2 – Govt. Policies and Interventions]

Context – The Department for Promotion of Industry and Internal Trade (DPIIT) has issued orders appointing an advisory committee for its Open Network for Digital Commerce (ONDC) project that is aimed at curbing “digital monopolies”.

About ONDC

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

• The project to integrate e-commerce platforms through a network based on open-source technology has been tasked to the Quality Council of India.

• Implementation of ONDC, which is expected to be on the lines of Unified Payments Interface (UPI) could bring various operational aspects put in place by e-commerce platforms to the same level. Various operational aspects include onboarding of sellers, vendor discovery, price discovery and product cataloging etc.

• On ONDC, buyers and sellers may transact irrespective of the fact that they are attached to one specific e-commerce portal.

Significance of ONDC

• Implementation of this system would mean that all e-commerce companies will have to operate using the same processes (like Android Based Mobile Devices).
• This could give a huge booster shot to smaller online retailers and new entrants.
  
• ONDC is expected to digitize the entire value chain, standardize operations, promote inclusion of suppliers, derive efficiency in logistics and enhance value for consumers.
  
• Making a software or a process open-source means that the code or the steps of that process is made available freely for others to use, redistribute and modify it.

About E-Commerce

• Electronic commerce or e-commerce is a business model that lets firms and individuals buy and sell things over the Internet.

• Propelled by rising smartphone penetration, the launch of 4G networks and increasing consumer wealth, the Indian e-commerce market is expected to grow to USD 200 billion by 2026.

The Indian e-commerce industry has been on an upward growth trajectory and is expected to surpass the US to become the second-largest e-commerce market in the world by 2034.

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