ONDC protocol set to move to next stage

The government’s Open Network for Digital Commerce (ONDC) protocol for e-commerce is set to move to the next stage. ONDC is envisaged as a neutral platform that will set open-source protocols for cataloging, vendor matching, and price discovery, in line with the Unified Payments Interface (UPI).

The Department for Promotion of Industry and Internal Trade (DPIIT) has roped in a dozen shareholders for Section 8 under the Companies Act. The shareholders have committed initial equity of Rs 185 crore. Sources said two to three shareholders are expected to join before the company is registered.

They revealed that the technology team has simulated a transaction for the ONDC protocol. This will be used as a tool where e-commerce players, kirana and other brick-to-mortar retailers, and logistics players come and sell their products. “We can go live in a few months. We have already done a hackathon, and more are planned next month to help us develop and fine-tune it,” the sources said.

Moreover, the government is looking to bring more sellers onto ONDC. This is part of its plan to take on Amazon and Flipkart, which are becoming entrenched in the market. As the big players embed themselves, brick-and-mortar stores are complaining they are losing out.

Minister for Commerce and Industry Piyush Goyal said the ONDC will create new opportunities and remove monopolistic environments. ONDC aims to foster open networks built on open-source methodology, using open specifications and network protocols, and independent of any specific platform.

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Experts say that once the platform is implemented and mandated, all e-commerce companies in India will have to operate using the same processes, akin to Android-based mobile devices, regardless of brand. It would boost smaller online retailers and new entrants by bringing discoverability, interoperability, and inclusivity.

It will empower suppliers and consumers by breaking the monopoly of giant platforms, driving innovation and transforming businesses in sectors like retail, food, and mobility.