ONDC: All you need to know about govt initiative challenging Amazon, Flipkart

Published on Aug 14, 2021 12:21 PM IST
ONDC aims at promoting open networks developed on open-sourced methodology, using open specifications and open network protocols independent of any specific platform. Union minister Piyush Goyal said that ONDC will create new opportunities and remove monopolistic environments.
The initiative is being spearheaded by the commerce and industry ministry, headed by Piyush Goyal.(PTI File Photo)
The initiative is being spearheaded by the commerce and industry ministry, headed by Piyush Goyal.(PTI File Photo)
By | Written by Amit Chaturvedi, Hindustan Times, New Delhi

The central government is moving fast on its promise of creating an open network for digital commerce (ONDC), which aims to democratise digital commerce. The initiative is being spearheaded by the commerce and industry ministry and can bring bad news for large e-commerce companies like Amazon and Flipkart.

"Chaired a meeting of the Open Network for Digital Commerce (ONDC). Deliberated with the members of the board & experts on how the initiative will democratise digital commerce & move it from platform-centric model to an open-network model," Union commerce and industries minister Piyush Goyal said on Twitter on Friday. He added that this will create new opportunities and remove monopolistic environments.

The government has set up a nine-member advisory council to suggest the steps required for the adoption of ONDC.

What is open network for digital commerce?

ONDC aims at promoting open networks developed on open-sourced methodology, using open specifications and open network protocols independent of any specific platform. According to the ministry, ONDC is expected to digitise the entire value chain, standardise operations, promote inclusion of suppliers, derive efficiencies in logistics, and enhance value for consumers.

In simple words, the ONDC initiative aims to promote open networks for all aspects of the exchange of goods and services over digital or electronic networks. Goyal had earlier said that ONDC will work for both products and services.

A UPI of e-commerce?

The commerce ministry said that ONDC is globally first-of-its-kind initiative that aims to democratise digital commerce, moving it from a platform-centric model to an open-network. "As UPI is to the digital payment domain, ONDC is to e-commerce in India," it said in a release.

Elaborating further, the ministry said that ONDC will enable, buyers and sellers to be digitally visible and transact through an open network, no matter what platform/application they use.

ONDC will empower merchants and consumers by breaking silos to form a single network to drive innovation and scale, transforming all businesses from retail goods, food to mobility, said the ministry.

How will ONDC function?

The Centre has laid down a detailed procedure for the functioning of the open network which primarily focuses on ensuring confidentiality and privacy of data in the network.

"It shall not mandate sharing of any transaction-level data by participants with ONDC and work with them to publish anonymised aggregate metrics on network performance without compromising on confidentiality and privacy," the ministry said in the release.

"ONDC will be compliant with the information technology act, 2000 and designed for compliance with the emerging personal data protection bill," the release further said.

The government also plans to establish an independent regulatory authority for e-commerce like Sebi.

The advisory council

The advisory council on ONDC was constituted by the Centre on July 5. It is take over as a guide and mentor in mentor to design, implementation and national rollout of ONDC.

The nine members of the advisory council include Nandan Nilekani from Infosys, National Health Authority Chief Executive Officer R S Sharma, QCI Chairman Adil Zainulbhai, Avaana Capital Founder Anjali Bansal, and Digital India Foundation Co-Founder Arvind Gupta.

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