As per orders from the Department for Promotion of Industry and Internal Trade (DPIIT), an advisory committee to advise the government for its Open Network for Digital Commerce (ONDC) project was constituted on July 6, 2021. The project aims to curb ‘digital monopolies’, making e-commerce processes open source, so that a platform can be created to be utilised by all online retailers. Expectedly, several operations including onboarding of sellers, vendor discovery, price discovery, and product cataloguing could be made open-source. However, there are apprehensions that if it is mandated, it could be problematic for larger e-commerce companies, such as Amazon, Flipkart, Zomato, bigbasket, and Grofers, which have proprietary processes and technology deployed for these segments of operations, as they will need to register on the ONDC platform.
Aims of the DPIIT
The DPIIT aims at promoting open networks developed on open-source methodology, using open specifications and open network protocols, independent on any specific platform. The project will digitise the entire value chain, standardise operations, promote inclusion of suppliers, derive efficiency in logistics, and enhance value for consumers.
Significance of the Project
If a software or a process is made open-source, it means that the code or the steps of that process is made available freely for others to use, redistribute, and modify it. The move will make the e-commerce ecosystem an open-source, i.e., allowing sellers to be discoverable across multiple platforms for a wider reach to customers instead of being available to customers on only one particular e-commerce platform. It will also help democratise digital commerce much like Unified Payments Interface (UPI). For instance, the operating system of Apple’s iPhones is a closed-source, so it cannot be legally modified or reverse engineered, whereas, Google’s Android operating system (OS) is open-source which can be modified by smartphone original equipment manufacturers (OEMs) like Samsung, Xiaomi, OnePlus, etc., for their use. After the implementation of the project, all e-commerce companies will have to operate using the same processes, possibly giving a huge booster shot to small online retailers and new entrants.
Experts’ Opinion
As per CEO of Retailers Association of India, Kumar Rajagopalan, it is the same as UPI did to the banking capabilities for people. Therefore, everybody uses the same protocol to seamlessly transact real-time. The project will also enable one to trade with anybody and create visibility for his/her product. Buyers and sellers will be able to transact irrespective of the fact that they are attached to one specific e-commerce portal. It will probably work like IMAP/SMTP protocols do for emails, and HTTP for data communication and browsing on the World Wide Web, and so on. Secretary General of CAIT, Praveen Khandelwal opines that this will be a first-of-its-kind initiative in the world to create a level playing field for digital commerce at the scale of a country like India.
The Advisory Council
A nine-member advisory council has been constituted by the Ministry of Commerce to advise the government how to design and accelerate the adoption of ONDC. The council consists of National Health Authority CEO and former Telecom Regulatory Authority of India (TRAI) Chairman, R.S. Sharma; Infosys non-executive chairman, Nandan Nilekani; Quality Control of India Chairman, Adil Zainulbhai; Avaana Capital Founder, Anjali Bansal; Digital India Foundation Co-Founder, Arvind Gupta; National Payments Corporation India CEO, Dilip Asbe; National Securities Depository Limited (NSDL) e-Governance MD & CEO, Suresh Sethi; Confederation of All India Traders (CAIT) Secretary General, Praveen Khandelwal; and Retailers Association of India CEO, Kumar Rajagopalan.
E-Commerce
E-commerce is a modern-day invention that facilitates the trading of goods and/or services through electronic means, or more precisely, the Internet. E-commerce is a business model that lets firms and individuals buy and sell things over the Internet. Propelled by rising smartphone penetration, the launch of 4G networks and increasing consumer wealth, the Indian e-commerce market is expected to grow to US$ 200 billion by 2026.
The Indian e-commerce industry has been on an upward growth trajectory and is expected to surpass the US to become the second-largest e-commerce market in the world by 2034.
© Spectrum Books Pvt Ltd.