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Open Network for Digital Commerce

Focus: GS III- Indian Economy

Why in News?

Open Network for Digital Commerce (ONDC) will charge a “small fee” from platforms that will contribute towards “maintenance and development” of the network.

  • The network will seek to reduce the compulsory commissions charged from sellers and logistics partners on the network by private e-commerce firms such as US-based Amazon and homegrown Flipkart — the two largest e-commerce firms in the country.

About Open Network for Digital Commerce (ONDC) project

  • The Open Network for Digital Commerce (ONDC) is a project which is an initiative of the Department of Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry.
  • The task of promoting open networks developed on open-source methodology has been given to the Quality Council of India (QCI) for ONDC project.
  • The expectations for ONDC are to digitise the entire value chain, standardise operations, promote inclusion of suppliers, derive efficiencies in logistics, and enhance value for consumers.
The main aims of ONDC are to:
  • Promote open-source methodology, using open specifications and
  • Promote open network protocols independent of any specific platform
  • Digitise value chains,
  • Promote inclusion of suppliers,
  • Standardize operations,
  • Derive efficiencies in logistics
  • Enhance value for consumers.
Department for Promotion of Industry and Internal Trade (DPIIT)
  • The Department for Promotion of Indu5stry and Internal Trade (DPIIT) is a central government department working under Ministry of Commerce and Industry.
  • The Department is responsible to formulate and implement promotional & developmental measures for growth of industrial sector based on national priorities and socio-economic objectives.
  • Individual administrative ministries are responsible for planning – production, distribution and developmental aspects of industries allocated to them. But the DPIIT is responsible for overall industrial policy.
  • DPIIT is also responsible to facilitate and increase foreign direct investment (FDI) flows India.
What is open-source?
  • Open-source means that the code or the steps of that process is made available freely for others to use, redistribute and modify.
  • 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 licence easing adoption and facilitating collaboration.
  • For example, while the operating system of Apple’s iPhones — iOS — is closed source, meaning it cannot be legally modified or reverse engineered.
  • Google’s Android operating system is open-source, and therefore it is possible for smartphone OEMs such as Samsung, Xiaomi, OnePlus, etc to modify it for their hardware

December 2023