Indian Government Urges Ecommerce Companies to Join Open Network for Digital Commerce (ONDC)

• ByStartupStory     |    May 12, 2023

According to a senior official, the government is urging all ecommerce companies to join the Open Network for Digital Commerce (ONDC), and the goal of this initiative is not to eliminate any businesses.

Rajesh Kumar Singh, the Secretary of the Department for Promotion of Industry and Internal Trade (DPIIT), explained that the purpose of this move is to democratize ecommerce for small and medium-sized enterprises (MSMEs) and smaller producers in remote areas of the country by providing them with a fair and equal opportunity.

“Singh emphasized that the government’s goal is not to compete with or eliminate any specific ecommerce portal or provider. Instead, the aim is to be inclusive and encourage all ecommerce players to participate in the network”, as he explained to reporters.

The significance of this statement lies in the fact that there have been reports indicating that prices of some food products offered by seller apps that have joined the ONDC initiative are lower than those offered by well-known food delivery service providers.

Singh pointed out that ultimately, consumers will benefit from increased competition. “Therefore, the government is not concerned about reports suggesting that some sellers’ margins may be affected by the initiative. The primary objective is to encourage healthy competition, even if it leads to the squeezing of margins that may have been created by a monopoly position”, according to Singh.

Singh stated that the ultimate objective is to onboard all stakeholders and establish a distinctive public digital infrastructure, akin to UPI, that is specific to India.

The vision is to “develop a distinct digital public infrastructure that benefits everyone and delivers exceptional service standards at an affordable price for all segments of society”, as per Singh’s explanation.

Established on December 31, 2021, ONDC is a Section 8 company that was initiated by the DPIIT to develop a supportive framework to enable small retailers to leverage digital commerce. It is not a software, platform, intermediary, or application but a collection of specifications intended to encourage open, unbundled, and interoperable open networks.

Follow Startup Story