Open Network for Digital Commerce (ONDC)

Ministry of Commerce & Industry

Context:

Setting up of Advisory Council for Open Network for Digital Commerce (ONDC)

Opening up a fresh front of crackdown on large e-commerce platforms, the Centre has moved ahead with its plans for the Open Network for Digital Commerce (ONDC) by forming an advisory council comprising nine members including National Health Authority CEO RS Sharma and Infosys non-executive chairman Nandan Nilekani. Through the ONDC, the government is looking to standardise protocols for onboarding stakeholders such as sellers on e-marketplaces.

In an order on Monday, the Department for Promotion of Industry and Internal Trade (DPIIT) said that the ONDC “aims at promoting open networks developed on open-sourced methodology, using open specifications and open network protocols, independent on any specific platform. ONDC is expected to digitise the entire value chain, standardise operations, promote inclusion of suppliers, derive efficiency in logistics and enhance value for consumers”

About Open Network for Digital Commerce (ONDC):

• Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry has initiated a project on Open Network for Digital Commerce (ONDC).
• The government has setup a committee and the Quality Council of India will begin a pilot project next month.
• ONDC aims at promoting open networks developed on open sourced methodology, using open specifications and open network protocols independent of any specific platform.
• ONDC is expected to digitize the entire value chain, standardize operations, promote inclusion of suppliers, derive efficiencies in logistics and enhance value for consumers.
•  DPIIT, in a notification, said it has been decided to constitute an advisory council to advise the government on measures needed to design and accelerate the adoption of ONDC.
• The ONDC is a digital project of the government to redefine the e-commerce landscape in the wake of a large number of complaints of malpractices being conducted by existing e-commerce companies.
• This move initiated to standardize the process of onboarding retailers on e-marketplaces, and supply and delivery of products through online channels
• An 11-member committee comprising officials from various ministries and industry representatives has been set up and a pilot project will start next month
• This is a new initiative. The protocol for digital commerce would be similar to what UPI is for online payments and https protocol is for secure communication over the internet

Government Initiatives Regarding e-Commerce in India

• In February 2019, a draft National e-Commerce policy has been prepared and placed in the public domain, which addresses six broad issues of the e-commerce ecosystem viz. e-commerce marketplaces; regulatory issues; infrastructure development; data; stimulating domestic digital economy and export promotion through e-commerce.
• The Department of Commerce initiated an exercise and established a Think Tank on ‘Framework for National Policy on e-Commerce’ and a Task Force under it to deliberate on the challenges confronting India in the arena of the digital economy and electronic commerce (e-commerce).
• The Reserve Bank of India (RBI) has decided to allow “interoperability” among Prepaid Payment Instruments (PPIs) such as digital wallets, prepaid cash coupons and prepaid telephone top-up cards. RBI has also instructed banks and companies to make all know-your-customer (KYC)-compliant prepaid payment instruments (PPIs), like mobile wallets, interoperable amongst themselves via Unified Payments Interface (UPI).
• FDI guidelines for e-commerce by DIPP: In order to increase the participation of foreign players in the e-commerce field, the Government has increased the limit of foreign direct investment (FDI) in the e-commerce marketplace model for up to 100% (in B2B models).
• Government e-Marketplace (GeM) signed a Memorandum of Understanding (MoU) with Union Bank of India to facilitate a cashless, paperless and transparent payment system for an array of services in October 2019.
• The heavy investment of Government of India in rolling out the fibre network for 5G will help boost e-commerce in India
• In the Union Budget of 2018-19, the government has allocated Rs 8,000 crore (US$ 1.24 billion) to BharatNet Project, to provide broadband services to 150,000-gram panchayats

Source: PIB

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