The Department for Promotion of Industry and Internal Trade (DPIIT) on July 5, 2021, had issued orders appointing an advisory committee for its Open Network for Digital Commerce (ONDC) Project that is aimed at curbing the digital monopolies.
The project is a step in the direction of making e-commerce processes open-source, thus leading to the creation of a platform that can be utilized by all online retailers.
The Open Network for Digital Commerce (ONDC) project is expected to set standards for onboarding retailers on online marketplaces as well as for the supply and delivery of the products through online channels.
The idea for ONDC had emerged in 2020 to bring some form of standards and streamline the country’s e-commerce ecosystem. Currently in India, different e-marketplaces have a different set of rules, which at times make it difficult for the small traders and suppliers to adopt.
According to DPIIT, the project aims at promoting open networks that are developed on open-sourced methodology, using the open specifications and open network protocols independent of any specific platform.
ONDC is expected to digitize the entire value chain, promote inclusion of suppliers, standardize operations, enhance value for consumers, and derive efficiencies in logistics.
What does it mean to make something open-sourced?
Making a process or software open-source means that the code or the steps of that process is being made available freely for others to use, modify or redistribute it.
For instance, while the operating system of Apple’s iPhones- iOS-is closed source, meaning that 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 Xiaomi, Samsung, OnePlus, etc. to modify it for their hardware.
If the Open Network for Digital Commerce (ONDC) gets implemented and mandated, it will mean that all the e-commerce companies will have to operate using the same processes. This can, in return, can give a huge booster shot to the smaller online retailers and new entrants.
What kind of processes are expected to be open-sourced with ONDC Project?
Various operational aspects, including vendor discovery, onboarding of sellers, product cataloging, and price discovery can be made open sources on the lines of Unified Payment Interface (UIF).
According to an executive of an e-commerce company, if mandated, this can be problematic for larger e-commerce companies, which have the proprietary processes and technology deployed for these segments of operations.
Who are the members of the 9-member panel/ advisory committee set up by DPIIT?
The 9-member panel include-
1. RS Sharma- National Health Authority CEO
2. Nandan Nilekani- Infosys non-executive Chairman
3. Adil Zainulbhai- Quality Control of India Chairman
4. Anjali Bansal- Avaana Capital Founder
5. Arvind Gupta- Digital India Foundation Co-Founder
6. Dilip Asbe- National Payments Corporation India CEO
7. Suresh Sethi- NSDL e-Governance MD & CEO
8. Praveen Khandelwal- CAIT Secretary General
9. Kumar Rajagopalan- Retailers Association of India CEO
What will be their role?
The nine-member panel set up by the Department of Industry and Internal Trade (DPIIT) will suggest measures to design an open network for digital commerce (ONDC) that aims at curbing the monopolistic tendencies of e-commerce platforms, among others.