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248 viewsAll GS PapersGS Paper 3
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Approach:

  1. Intro – define Open Network for Digital Commerce.
  2. Briefly state the current status of ONDC in India.
  3. Point out its significance.
  4. Conclusion.

ONDC is a non-profit company whose network will enable the display of products and services from all participating e-commerce platforms in search results across all apps on the network. It is a globally first-of-its-kind initiative that aims to democratize digital commerce, by providing equal opportunities to all marketplace players. It is based on open-sourced methodology, independent of any specific platform.

Current status of ONDC in India: It has been rolled out in 5 citiesDelhi NCR, Bengaluru, Bhopal, Shillong, and Coimbatore. The operations are presently focused on retail and restaurants and facilitating real-time transactions. The open network will later extend to other categories like travel and mobility. Based on a pilot exercise, ONDC will be expanded to 100 cities and towns across India by October 2022. The goal is to accommodate 30 million sellers and 10 million merchants online.

Significance:

  • It will help in enhancing the volume as well the value of e commerce The Government estimates that India’s e-commerce market was worth more than US$ 55 billion in gross merchandise value in 2021 and will grow to US$ 350 billion by the end of this decade. This target seems much more achievable with ONDC.
  • According to the Government, existing platforms work in silos and are tightly controlled, keeping out many small players. However, ONDC will increase competition and foster innovation by start-ups through the display of products and services from all participating e-commerce platforms.
  • It will limit opportunities for selected sellers to receive preferential treatment. This preferential treatment is a common accusation against major e-commerce companies. It will also help to end predatory pricing, especially in high-margin, high-value products.
  • It is expected to make e-commerce more inclusive and accessible for consumers, thus increasing their freedom of choice.
  • ONDC would enable small businesses to use any ONDC-compatible applications. This will provide multiple options to small businesses to acquire businesses, without having to pay deep cuts to aggregator platforms.
  • Businesses are expected to benefit from transparent rules, lightweight investment, and lower cost of business acquisition.
  • It is also expected that the time-to-market as well as time-to-scale shall also be substantially reduced. All this will help in attracting greater investment in the e-commerce space.
  • The digital platforms are becoming an avenue for a new type of global diplomacy. Recently, the Co-Win platform was offered by India to interested countries.

ONDC provides a technological platform to fulfil India’s aspirations to become a middle-income economy that is digitally wired. It offers a vital global template for harnessing technology as a public good at scale in an inclusive and equitable way.

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