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ONDC – OPEN NETWORK FOR DIGITAL COMMERCE

“E-Commerce is a powerful means to connect the unconnected to global trade.”


With the aim to break up digital monopolies, Open Network for Digital Commerce is an initiative that aims to advance open networks for all aspects of the exchange of goods and services over digital networks.


Open Network for Digital Commerce is an initiative that aims to advance open networks for all aspects of the exchange of goods and services over digital networks. It is based on an open protocol that will allow any network-enabled application to explore and engage with local commerce across segments, including mobility, shopping, food order and delivery, among others. An initiative of the Department for Promoting Industry and Internal Trade of the Ministry of Commerce and Industry (DPIIT), the government is certain that ONDC will help open up new markets for small business owners while decreasing the monopoly of large corporations. The platform aims to break up digital monopolies, create new opportunities, and enable independent merchants, small and medium-sized businesses, and microbusinesses to participate in online marketplaces.

By moving it away from a platform-centric strategy and towards an open network, ONDC is an e-commerce UPI that seeks to democratize digital or electronic commerce. Through ONDC, merchants will be able to save their data and access it later to build credit histories and communicate with customers. The government-backed platform aims to level the playing field for online retail powerhouses like Amazon and Flipkart as well as traditional brick and mortar stores that have complained about online retailers' dishonest business practices.

The platform will also be compliant with the Personal Data Protection Bill as well as the Information Technology Act of 2000. ONDC hopes to enable suppliers and buyers to trade via an open network regardless of the platform or application they use. By dissolving silos and establishing a cohesive network that will foster innovation and scalability across all industries. The new framework promises to support platforms-independent open networks created utilizing open-source methods, open specifications, and open network protocols. The entire value chain will be digitized, processes will be standardized, supplier inclusion will be boosted, logistics will be more effective, and customer value will rise.

The government's official statement states that ONDC will take all necessary measures to ensure the confidentiality and privacy of the network data. It won't be necessary for participants to share transaction level data with ONDC. To design and expedite the deployment of ONDC, which is currently in its experimental stage, the government has established a nine-member advisory council.

The Ministry of Commerce and Industry launched the open network for digital commerce's experimental phase in April in five cities: Delhi NCR, Bengaluru, Bhopal, Shillong, and Coimbatore. In these cities, people were allowed to carry out transactions. The presence of an open network for digital commerce, a Unified Payments Interface (UPI)-type protocol, will be gradually expanded to more cities after the successful launch of its pilot phase. With the goal of enlisting 10 million merchants and 30 million sellers, ONDC will soon be extended to more than 100 cities across the nation.

Up to 20 reputable national organizations have so far pledged to ONDC a total of Rs. 255 crore. Investments have historically been insured by lenders like State Bank of India, UCO Bank, HDFC Bank, ICICI Bank, and Bank of Baroda.


Did You Know?

In April, Bengaluru based Woolly Farms received an order from buyer application Paytm. This was the first transaction on ONDC.



BY:

Gursimran Kaur & Simran Kaur Johar

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