Context: Recently,the Indian government launched an Open Network for Digital Commerce to end the dominance of the US-based e-commerce companies like Amazon and Walmart in India.

• Goal of ONDC: The goal of ONDC is to change the e-commerce market’s fundamental structure by moving from the current platform-centric model to an open-network model.

Key-highlights

• The Indian government is all set to launch an Open Network for Digital Commerce.
• The government wants to end dominance of the US-based e-commerce companies like Amazon and Walmart in India.
• The launch of the ONDC platform comes in the wake of India’s antitrust body raid on domestic sellers of Amazon and some of Walmart’s Flipkart.

About ONDC platform

• With the launch of ONDC, the government aims to promote an open platform for exchange of goods and services through electronic networks. 
• The open network platform will be launched in five cities including Delhi NCR, Bengaluru, Bhopal, Shillong and Coimbatore.
• It would later be expanded to other cities.
• The plan is to cover at least 100 cities and towns by August. 
• India's ONDC plan aims to onboard 30 million sellers and 10 million merchants online.
• The government will focus on apps in local languages for buyers and sellers. 
• The apps would highlight small merchants and rural consumers.
• The government in a document revealed that the retailers and venture capital firms have lended support to the ONDC plan. 
• Banks such as State Bank of India, ICICI Bank and Bank of Baroda have already committed total investments of 2.55 billion rupees.

Advantages of ONDC

• ONDC will democratize e-commerce, curb digital monopolies and create new opportunities.
• It will protect micro, small, and medium enterprises (MSMEs) and small traders by granting them equal opportunity in the fast-growing $1 trillion retail market.
• As the Unified Payments Interface (UPI) has enabled people to make payments and money transfers through an open network, ONDC will bring a similar change to the e-commerce segment in India.

How does ONDC benefit small traders?

• Access to more buyers.
• Better discoverability of products and cost.
• Autonomy on terms because of multiple choices for being digitally visible.
• Lower cost of doing business.
• More options for value chain services like logistics and fulfillment.

How does ONDC ensure a level playing field?

• ONDC will put in place the ground rules, the network participation rules, the obligation, and dispute resolution.
• To govern the online trade, it will have a set of top-class protocols in critical areas like price discovery, vendor match, and cataloging, ostensibly in open source.

What is ONDC not?

• A government regulatory body
• A super aggregator application or a platform
• A central intermediary
• A medium to help digitise business