Lok Sabha Question No. 107 (STARRED), answered on 2022-02-09
Subject: Open Network for Digital Commerce
Ministry: COMMERCE AND INDUSTRY
Asked by: Bhartruhari Mahtab

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

STARRED QUESTION NO. 107.

TO BE ANSWERED ON WEDNESDAY, THE 9 TH     FEBRUARY, 2022.

## OPEN NETWORK FOR DIGITAL COMMERCE

## *107.  SHRI BHARTRUHARI MAHTAB:

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

- (a) whether  the  Government  is  mulling  to  roll  out  an  Open  Network  for  Digital Commerce  (ONDC),  an  open  source  e-commerce  platform  that  all  online retailers can use;
- (b) if so, the details thereof along with the time by which the said platform is likely to be launched;
- (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  Government  has  invited  suggestions  from  stakeholders  in  the ecosystem and if so, the details thereof; and
- (e) whether the said suggestions have been taken into consideration before rolling out the ONDC platform and if so, the details thereof?

## ANSWER वाणिज्य  एवं उद्योग मंत्री (श्री पीयूष गोयल) THE MINISTER OF COMMERCE & INDUSTRY (SHRI PIYUSH GOYAL)

(a) to (e)

: A Statement is laid on the Table of the House.

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## STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (e) OF THE LOK SABHA STARRED QUESTION NO. 107 FOR ANSWER  ON 09 TH FEBRUARY, 2022.

- (a) & (b): Open Network for Digital Commerce (ONDC) is an initiative aiming at promoting  open  networks  for  all  aspects  of  exchange  of  goods  and services  over  digital  or  electronic  networks.  ONDC  is  based  on opensource 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 used for establishing 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 thus use any compatible application of their choice for exchange of information and carrying out transactions over the network. Thus, ONDC is a network, and not a platform. It goes beyond the current model of digital commerce where the buyer and seller have to be on the same platform to do a business transaction.

- (c): ONDC protocols are meant for standardizing operations like cataloguing, inventory management, order management and order fulfilment. Hence small retailers and small businesses can easily and more economically get  registered  over  an  electronic  network,  be  discoverable  by  buyers from across various platforms and conduct transactions.

ONDC  has  potential  to  open    huge  opportunities  for  startups  for onboarding retailers across the country on electronic network, help them conduct transactions, assist them in fulfilment of orders and aid the entire set of activities needed to do business. Many startups are expected to provide  localized  services  to  small  retailers.  As  small  retailers  mostly operate in local language, large number of Indian language applications are also expected to be developed.

The  total  number  of  recognized  startups  during  the  last  three  years (Financial Year wise) as on 31 st  January 2022 is as below:

| Financial Year                        | Total Number of Recognised Startups   |
|---------------------------------------|---------------------------------------|
| 2018-2019                             | 8,486                                 |
| 2019-2020                             | 12,746                                |
| 2020-2021                             | 16,212                                |
| 2021-2022 (as on 31 st January, 2022) | 16,737                                |
| Total                                 | 54,181                                |

- (d) & (e): The  conceptualization  of  ONDC  is  a  result  of  extensive  stakeholder consultations.

DPIIT constituted a Steering Committee  in November,  2020  for formulation, implementation and policy oversight of  ONDC.  The Committee  comprised  of  senior  representatives  of  Department  for Promotion  of  Industry  and  Internal  Trade,  Department  of  Commerce, Ministry  of  Electronics  and  Information Technology,  Ministry  of  Micro, Small and Medium Enterprises, NITI Aayog,  Quality Council of India, technology and domain experts from National Payments Corporation of India, National Securities Depository Limited and Founder of MyGov as its members. Representatives of Confederation of All India Traders and Retailers Association of India were also part of the Committee.

The Quality Council of India was assigned  the work of carrying out a pilot on Open Network of Digital Commerce in December, 2020.

An  Advisory  Council  was  constituted  in  July,  2021  to  advise  the Government on measures needed to design and accelerate adoption of ONDC. The Advisory Council includes eminent personalities and experts having  substantive  experience  in  implementation  of  population  scale public digital infrastructure.

'Open Network for Digital Commerce' has been registered as a non-profit company  in  December,  2021.  All  activities  are  undertaken  through extensive stakeholder consultations with various stakeholders.

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