Lok Sabha Question No. 2326 (UNSTARRED), answered on 2022-12-21
Subject: ONDC
Ministry: COMMERCE AND INDUSTRY
Asked by: Gajanan Chandrakant Kirtikar, Ganesan Selvam, Dhanush M Kumar, C.N. Annadurai

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL TRADE

## LOK SABHA

UNSTARRED QUESTION NO. 2326. TO BE ANSWERED ON WEDNESDAY, THE 21 ST   DECEMBER, 2022.

## ONDC

## 2326.  SHRI GAJANAN KIRTIKAR:

SHRI SELVAM G.:

SHRI DHANUSH M. KUMAR:

SHRI C.N. ANNADURAI:

Will the Minister of COMMERCE AND INDUSTRY be pleased to state: वाणिज्य एवं उद्योग मंत्री

- (a) the salient features of new Open Network for Digital Commerce (ONDC) project;
- (b) the  manner  in  which  ONDC  will  help  small  sellers,  traders  and  farmers  to participate in e-commerce with an equal footing as large players;
- (c) the increase in number of recognized startups in the country during the last three years along with the manner in which the said ONDC would empower and nurture the new startups and also the brick-and-mortar stores in the country;
- (d) whether the ONDC has taken steps to bring on-board the entire farm value chain to e-commerce, particularly the Farmer Producer Organisations (FPOs), mandis, processors, exporters, MSMEs and the small retailers;
- (e) if so, the details thereof; and
- (f) whether  ONDC  has  organized  'Grand  Hackathon'  on  agriculture  domain  to promote  open e-Commerce network, if so, the details and its outcome thereof?

## ANSWER

## वाणिज्य एवं उद्योग मंत्रालय में राज्य मंत्री ( श्री सोम प्रकाश ) THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE & INDUSTRY (SHRI SOM PARKASH)

- (a): Open  Network  for  Digital  Commerce  (ONDC)  aims  at  promoting  open networks for all aspects of exchange of goods and services over digital or electronic networks. ONDC is based on open-sourced methodology, using

open specifications and open network protocols independent of any specific platform.

The foundations of ONDC are open protocols for all aspects in the entire chain of activities in exchange of goods and services, similar to hypertext transfer protocol for information exchange over internet, simple mail transfer protocol  for  exchange  of  emails  and  unified  payments  interface  for payments.

These open protocols are building blocks of public digital infrastructure in the form of open registries and open network gateways to enable exchange of information between providers and consumers. Providers and consumers can  use  any  compatible  application  of  their  choice  for  exchange  of information and carrying out transactions over ONDC.

Thus, ONDC goes beyond the current platform-centric digital commerce model  where  the  buyer  and  seller  have  to  use  the  same  platform  or application to be digitally visible and do a business transaction.

- (b): ONDC  protocols standardize operations like cataloguing, inventory management, order management and order fulfilment. Thus, small sellers, traders and farmers can use any ONDC compatible applications instead of being governed by specific platform centric policies. This provides multiple options to them to be discoverable over network and conduct business. It would also encourage easy adoption of digital means by those currently not on digital commerce networks.
- (c): In the last three years (years 2019, 2020 and 2021) 45,951 entities were recognized as startups by the Department for Promotion of Industry and Internal  Trade  (DPIIT).  The  year-wise  number  of  entities  recognised  as startups by the DPIIT in the last three years is as under:

| Year        | Number of entities recognised as startups   |
|-------------|---------------------------------------------|
| 2019        | 11,328                                      |
| 2020        | 14,534                                      |
| 2021        | 20,089                                      |
| Grand Total | 45,951                                      |

ONDC modularizes operations involved in exchange of goods and services. In the traditional model, an e-commerce platform has to create services for buyers, sellers, payments and logistics. In ONDC model, a company may provide any one or more of these services and join the network. Hence, ONDC has potential to open huge opportunities for startups by developing innovative  and  specialized  solutions  for  any  part  of  e-Commerce  value chain  and  integrate  with  the  wider  ecosystem  of  e-commerce  and  scale rapidly.

- (d) & (e): ONDC helps Farmer Producer Organisations (FPOs), mandis, processors, exporters, MSMEs and the small retailers to integrate with ONDC Network. ONDC has supported  Seller-Side  Network  Participants  to  integrate  with ONDC  Network,  testing  them  for  both  technical  as  well  as  operational reliability, and making their details available online for being discovered by any buyer.
- (f) :                 A National Bank for Agriculture and Rural Development (NABARD) - ONDC Grand Challenge was launched in June 2022 with the support of Startup India,  Atal  Innovation  Mission,  NABARD  and  Bombay  Stock  Exchange (BSE) to activate the farm and off-farm sector value chain with e-Commerce,  and  onboard  farmers,  FPOs,  mandis,  agriculture  traders, processors, exporters and retailers on the ONDC network.

The Hackathon was conducted over three days (July 1 - July 3) with more than  700  participants,  and  the  9  winners  were  announced  on  12th  July 2022.

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