Open Network for Digital Commerce (ONDC)

2023 MAY 20

Preliminary   > Economic Development   >   Indian Economy and Issues   >   e-Commerce

Why in news?

  • The Union government is looking to formally launch the Open Network for Digital Commerce (ONDC) in 2023 to “democratize e-commerce” and “to provide alternatives to proprietary e-commerce sites”.

About Open Network for Digital Commerce:

  • Open Network for Digital Commerce (ONDC) is initiated by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry
  • ONDC aims at promoting open networks developed on open-sourced methodology, using open specifications and open network protocols independent of any specific platform.
  • ONDC is expected to digitise the entire value chain, standardise operations, promote inclusion of suppliers, derive efficiencies in logistics, and enhance value for consumers.

What is Open- Source project?

  • An open-source project means that anybody is free to use, study, modify and distribute the project for any purpose.
  • These permissions are enforced through an open-source license easing adoption and facilitating collaboration.
  • ONDC is creating a platform that can be utilized by all online retailers which is an open network protocols- independent of any specific platform.
  • Onboarding of sellers, vendor discovery, price discovery and product cataloguing could be made open source on the lines of Unified Payments Interface (UPI).


  • Digital monopolies
    • As e-commerce giants or Big Tech companies tend to dominate and flout competition law pertaining to monopoly.
    • The e-commerce giants such as amazon have built their own proprietary platforms for operations which makes the smaller retails difficult to grow

Working of ONDC:

  • Sellers will be onboarded through open networks. Other open-source processes will include those such as vendor and price discovery; and product cataloguing.
  • The format will be similar to the one which is used in the Unified Payments Interface (UPI).
  • Marketplaces such as Amazon, Flipkart, Zomato and BigBasket will need to register on the ONDC platform to be created by DPIIT and QCI.
  • The task of implementing DPIIT’s ONDC project has been assigned to the Quality Council of India (QCI)

Benefits of the project:

  • Facilitating smaller online retailers and new entrants in to the digital commerce sector
  • Standardised operations i.e all e-commerce companies will have to operate using the same processes.
  • Reduce the dominance of giants such as Amazon and Walmart-Flipkart.


Which of the following statements is/are correct regarding ‘Open Network for Digital Commerce’ project?

1. The task of implementing the project is assigned to Quality Council of India (QCI)

2. The effective implementation of the project will helps in promoting smaller online retailers and new entrants in to the digital commerce sector

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2