Consumer Affairs Secretary Urges ONDC to Tackle Liability Issues in E-Commerce

• ByStartupStory     |    December 12, 2023

Rohit Kumar Singh, Consumer Affairs Secretary, has called upon the Open Network for Digital Commerce (ONDC) to address concerns related to liability in cases of incorrect or defective product deliveries. Speaking at the ‘Deloitte Growth with Impact Government Summit,’ Singh emphasized the need to resolve liability issues to ensure satisfactory services for consumers, as reported by news agency PTI.

Singh highlighted scenarios where the responsibility for incorrect deliveries becomes complex, stating, “If I order through an app of a bank through Amazon and buy it from a seller located elsewhere and I get the wrong phone, then who is liable? So the issue of liability… I keep telling Mr. T Koshy (ONDC CEO) that you have to address the issue of liability; otherwise, this thing is not going to work.”

ONDC, a private non-profit platform supported by the Department for Promotion of Industry and Internal Trade (DPIIT), was incorporated on December 31, 2021, with the goal of democratizing e-commerce in India. Launched in April last year in five cities, including Delhi NCR, Bengaluru, Bhopal, Shillong, and Coimbatore, ONDC has witnessed significant growth. Initially focusing on food and grocery delivery, the platform has expanded to include partners in electronics, fashion, and mobility services.

CEO T Koshy revealed ONDC’s plans to enter the financial products and services segment, along with potential expansions into skill-based services such as appliance repair and teaching assistance. Consumer Affairs Secretary Singh expressed his hope for ONDC’s success but raised concerns about the platform’s legal position in cases of liability.

Singh questioned the potential legal complexities, stating, “I hope ONDC becomes a success, but in the law where does ONDC fit in? It is neither the seller nor the buyer. But If I am buying through the app…if something goes wrong, there are five parts of the chain (in ONDC supply chain), then who is liable.”

The Consumer Affairs Secretary emphasized the importance of addressing liability issues before ONDC becomes more extensive and urged the platform to proactively handle grievances to ensure proper redressal. Despite these challenges, recent reports suggest that ONDC is positioned to significantly impact the e-commerce space, potentially generating $250-300 billion in gross merchandise value by 2030, according to Redseer.

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