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).
What is 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 networks developed 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.
- 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.
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What processes can be made open-sourced?
Following operational aspects can be made open source on the lines of Unified Payments Interface (UPI):
- onboarding of sellers
- vendor discovery
- price discovery
- product cataloging
Benefits of ONDC
ONDC is expected to:
- digitize the entire value chain
- standardize operations
- promote inclusion of suppliers
- derive efficiency in logistics
- enhance value for consumers
Impact
- 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.
