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The Open Network for Digital Commerce (ONDC) is India’s pioneering initiative to build Digital Public Infrastructure for e-commerce much like how UPI revolutionized payments. As a DPI, ONDC is not a platform or app, but a protocol an open, interoperable network that allows buyers and sellers to connect freely across any compatible application, regardless of the platform they use.
Its core purpose is to democratize digital commerce, enabling millions of small and medium businesses, especially from Bharat’s informal and underserved segments — to participate in the digital economy without relying on a single dominant intermediary.
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The Open Network for Digital Commerce (ONDC) is a transformative national initiative by the Government of India, operating as a not-for-profit Section 8 company under the Ministry of Commerce and Industry. Its core purpose is to democratise digital commerce by shifting from the current few-platform-dominated model to an open, interoperable, and inclusive network.
Is ONDC a government platform or a private company?
It's a private non-profit (Section 8) company established by the government, acting as a public digital infrastructure. It's not a platform or a Mobile app.
Under which ministry does it operate?
Ministry of Commerce and Industry, DPIIT (Department for Promotion of Industry and Internal Trade).
Why a Section 8 company?
To ensure its non-profit, public-good focus and prevent it from becoming another monopolistic entity. It's designed for long-term national benefit, not private gain.
What problems is ONDC solving?
The dominance of a few large e-commerce players, limited market access for small businesses, and a lack of transparency in online commerce.
A handful of large platforms heavily influence India’s digital commerce landscape. This concentration leads to:
Limited Access
Small businesses, local retailers, and artisans struggle to gain visibility and compete effectively.
Unfair Practices
Control over algorithms, pricing, and logistics by large players can disadvantage smaller sellers and limit consumer choice.
Innovation Bottleneck
A platform-centric model can stifle innovation by locking participants into a single ecosystem.
It enables:
Fair Competition
Allowing all participants to connect and transact on an open network, regardless of the app or platform they use.
Increased Market Access
Empowering millions of small and medium enterprises (MSMEs) and Farmer Producer Organisations (FPOs) to reach a wider audience.
Consumer Choice & Better Prices
By fostering competition, ONDC drives down costs and offers consumers more options and transparent pricing.
Why is breaking monopolies crucial for economic growth?
It fosters healthy competition, innovation, enables broader participation, and ensures wealth distribution, rather than concentration.
ONDC is neither a mobile app nor another e-commerce platform.
Instead, ONDC is a "protocol" or a "network". Think of it like the internet itself or a common language that allows different applications to communicate.
Imagine different telecom operators that can all connect to each other because they speak the same "protocol" (telephone network). Similarly, ONDC enables different "buyer apps" and "seller apps" to interact seamlessly.
Buyer Apps
The applications consumers use to discover and purchase products/services (Example: a new shopping app, or existing apps like Paytm integrating ONDC).
Seller Apps:
Applications that help businesses list their products and manage orders on the ONDC network.
Logistics Partners
Delivery services that integrate with ONDC to fulfil orders from any seller to any buyer app.
Technology Service Providers (TSPs)
Companies that provide the technical infrastructure, software, and tools to help Buyer Apps, Seller Apps, and Logistics Partners integrate with and operate on the ONDC network.
What does "network unbundling" mean?
It means separating the different components of e-commerce (buyer interfaceseller interface, logistics, payments) so they can operate independently but still connect through a standard set of rules.
Does a small seller need to build their app?
No. They just need to onboard through an existing "seller app" that is connected to the ONDC network.
ONDC is a game-changer for India's vast network of FPOs, MSMEs, Self-Help Groups (SHGs), and artisans. These groups often face significant barriers to digital commerce, including high costs, limited technical expertise, and restricted market access
With ONDC, they can:
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ONDC SAHAYAK
