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Open Network for Digital Commerce (ONDC)

  • Category
    Polity & Governance
  • Published
    14th Jul, 2021

The Department for Promotion of Industry and Internal Trade (DPIIT) issued orders appointing an advisory committee for its Open Network for Digital Commerce (ONDC).

Context

The Department for Promotion of Industry and Internal Trade (DPIIT) issued orders appointing an advisory committee for its Open Network for Digital Commerce (ONDC).

About

What is Open Network for Digital Commerce (ONDC)?

  • The project is aimed at curbing “digital monopolies”.
  • This is a step in the direction of making e-commerce processes open-source, thus creating a platform that can be utilized by all online retailers.
  • ONDC aims at promoting open networksdeveloped on open-sourced methodology, using open specifications and open network protocols, independent of any specific platform.

What is open-source?

  • Making a software or a process 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.

What are the benefits of ONDC?

  • ONDC is expected to digitize the entire value chain, standardize operations, promote inclusion of suppliers, derive efficiency in logistics and enhance value for consumers.

What will be the Impact of ONDC on business?

On smaller companies:

  • If the ONDC gets implemented and mandated, it would mean that all e-commerce companies will have to operate using the same processes.
  • This could give a huge booster shot to smaller online retailers and new entrants.

On big companies:

  • If mandated, this could be problematic for larger e-commerce companies, which have proprietary processes and technology deployed for these segments of operations.
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