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Post at: Aug 16 2021

Open Network for Digital Commerce (ONDC)

Recent Context

  • On July 5, 2021, the Department for Promotion of Industry and Internal Trade (DPIIT) has issued orders appointing an advisory committee for its Open Network for Digital Commerce (ONDC) project.
  • The task of implementing DPIITs ONDC project has been assigned to the Quality Council of India (QCI).

About ONDC Project

  • ONDC seeks to promote open networks, which are developed using the open-source methodology.
  • 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.
  • They will encourage the usage of standardized open specifications and open network protocols, which are not dependent on any particular platform or customized one.

What is meant by ‘Open Source’?

  • An open source project means that anybody is free to use, study, modify and distribute the project for any purpose. For example, while the operating system of Apple’s iPhones – IOS – is closed source, meaning it cannot be legally modified or reverse engineered, and Google’s Android operating system is open source, and therefore it is possible by smartphone OEMs such as Samsung, Xiaomi, Oneplus etc to modify it for their hardware.
  • The permission are enforced through an open source license easing adoption and facilitating collaboration.

What processes are expecting to be open-sourced with this project?

  • Several operational aspects including onboarding of sellers, vendor discovery, price discovery and product cataloguing could be made open source on the lines of Unified Payments Interface (UPI).
  • If mandated, this could be problematic for larger e-commerce companies, which has proprietary processes and technology deployed for these segments of operations.

What is the significance of Making something open-source?

What does the DPIIT intend from the Project?

  • The ONDC aims at promoting open networks developed on open-sourced methodology, using open specification and open network protocols, independent on any specific platform.
  • ONDC is expected to digitize the entire value chain, standardize operation, promote inclusion of supplier, derive efficiency in logistics and enhance value for consumers.

Digital Monopoly (DM)

  • DMs refer to a scenario wherein e-commerce giants or Big Tech companies tend to dominate and flout competition law pertaining to monopoly.
  • The giants have built their own proprietary platform for operations.

Conclusion

  • ONDC will make sure consumer and seller interest will be protected as the UPI did.
  • It will help local start-ups and reduce the dominance of giants such as Amazon Walmart and Flipkart.

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​​​​​​​@  Yogesh Pratap Singh


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