Open Network for Digital Commerce (“ONDC”) is an initiative introduced by the Government of India with the agenda of reshaping the future of E-Commerce in India and to curb the monopoly being created by e-commerce giants such as Amazon, Flipkart etc., in the Indian Market.
The E-Commerce market as a result of rapid growth in technology and increase in digitalization have grown exponentially over the last few years and according to a report the E-Commerce market in India is expected to become a $200 Billion industry by the year 2026, growing at a CAGR of 19%.
Now, with the introduction of a concept like ONDC the prediction of E-Commerce sector becoming a $200 Billion industry will become reality sooner then expected, since ONDC will help widen the platform of E-Commerce allowing even the smallest of businesses such as small retailers, neighborhood kirana stores to be part of E-Commerce industry, be discoverable and business worthy.
In this article we will attempt to discuss what is the concept of ONDC and how it will work, how to register on ONDC platform, its timeline and advantages, disadvantages and how it will help redefine the future of E-Commerce sector in India.
ONDC is built on an open-sourced methodology, using open specifications and open network protocols independent of any specific platform for all the aspects involved in the entire chain of activities in exchange of goods and services, similar to hypertext transfer protocol (“HTML”) for information exchange over internet, and unified payments interface (“UPI”) for payments.
ONDC open source protocols will be used to establish public digital infrastructure in the form of open registries and open network gateways to enable exchange of information between providers and consumers freely, allowing producers and consumers to use any compatible application of their choice for exchange of information and carrying out transactions over ONDC.
HOW IT WILL WORK
ONDC open source protocols would standardize all operations, unlike platform-centric E-Commerce model where the buyer and seller have to use the same platform or application to be digitally visible and do a business transaction.
ONDC platform will allow even smallest of businesses to use any ONDC compatible applications instead of being governed by specific platform centric policies, allowing even small business such as small traders, neighborhood kirana stores to be discoverable over network and become business worthy. It will also encourage adoption of digital means for who are currently not on E-Commerce networks.
The DPIIT proposes to govern the ONDC by the Information Technology Act, 2000 and the Data Protection Bill and also aims to ensures to protect the privacy and security of the users of the platform.
PREREQUISITES FOR REGISTRATION
The enterprises interested to participate as seller on this platform, will be required to register themselves with DPIIT with the pre-requisites of providing Goods and Services Tax Identification Number (“GSTIN”) of the business, contact details of the person as well as the business personnel, details of bank account and has to sign an onboarding agreement, which would govern both the parties.
The main aim of the Department for Promotion of Industry and Internal Trade (“DPIIT”) behind the setting up of the ONDC was to provide a platform allowing interoperability between E-Commerce platforms and providing equal opportunity to small businesses especially to the micro, small and medium enterprises (“MSMEs”), since MSMEs have huge potential.
Further, ONDC key aspects of providing ease in access, strong competition, and higher interoperability will help curb digital monopolies in the market. Moreover, it is an inclusive application, which would enable all kinds of supplier to participate on this platform. Further, it will provide visibility to all the sellers registered on their platform instead of only those sellers who are authorized and have been sponsored by paying a huge sum of money.
Moreover, due to easy access and scalability it will be perceived as a compact platform with a wide range of services and product. Thus, this platform would provide comprehensive services which would benefit everyone.
ONDC is a unique initiative introduced by the DPIIT with the aim of democratizing and making E-Commerce more inclusive and accessible for consumers by providing access through any compatible application instead of a platform specific application, providing freedom of choice to consumers.
ONDC is an open source platform promoting open networks for all aspects of exchange of goods and services over digital or electronic network creating interoperability and ease in access, to provide equal opportunity to the small traders and business to participate, be discoverable and become business worthy. Thus, going beyond a platform-centric approach.
Now, as the ONDC platform is on it way of becoming the future playground for E-Commerce platforms in India, the demand for a trustworthy, robust and secure platform is rising. Although, the advisory council of ONDC, considering it is a niche platform, vulnerable to digital attacks had decided that it will be built in compliance with the Information Technology Act, 2000, and emerging Personal Data Protection Bill. However, the absence of a robust data privacy regulations in India, currently will act as an impediment for the ONDC platform from exploring its full potential.
– Team AMLEGALS
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