Lok Sabha Question No. 816 (UNSTARRED), answered on 2024-02-07
Subject: ONDC
Ministry: COMMERCE AND INDUSTRY
Asked by: Gyaneshwar Patil

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

## LOK SABHA

## UNSTARRED QUESTION NO. 816.

TO BE ANSWERED ON WEDNESDAY, THE 07 TH  FEBRUARY, 2024.

## ONDC

## 816.   SHRI GYANESHWAR PATIL:

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

- (a) the details of the achievements and policy of  the Government regarding the recently launched Open Network for Digital Commerce (ONDC) initiative;
- (b) the manner in which the small traders are likely to be strengthened by adopting the open network of e-Commerce;
- (c) whether  the  Government  proposes  to  enable  active  participation  of  local customers for the benefit of small traders; and
- (d) if so, the details 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) is a section 8 company, under the initiative  of  the  Department  for  Promotion  of  Industry  and  Internal Trade (DPIIT), Ministry of Commerce & Industry, aimed at promoting open networks for all aspects of the exchange of goods and services over digital or electronic networks.

Achievements of ONDC so far:

-  The ONDC Network started with two categories (F&B and Grocery) and have expanded to other categories such as Mobility, Fashion, Beauty and Personal  Care,  Home  &  Kitchen,  Electronics  and  Appliances,  Health  & Wellness and B2B.
-  The  number  of  Network  Participants  on  ONDC  has  shown  tremendous increase with the onboarding of several sellers and service providers on the network.
-  The sellers and service providers are spread across 540+ cities expanding the geographical coverage of the ONDC network.
-  Special focus is being given to sellers who are being digitized for the first time. Various schemes are being planned and implemented to enable the 'first-time digital' sellers to be a part of the ONDC network.
-  ONDC is working with entities like  the Ministry  of  Agriculture &  Farmers Welfare and NABARD to onboard FPOs and farmers to the network.
-  ONDC is also  actively  working  to  on-board  various  SHGs,  social  sector sellers  and  micro-entrepreneurs  to  the  ONDC  network  with  the  aid  of ecosystem partners like SIDBI.
-  ONDC is also actively working with the Ministry of MSME for formulating a scheme to help the MSMEs to take advantage of ONDC. Currently, various MSMEs  are  onboarding  to  the  ONDC  network  through  existing  ONDC seller apps.

The Government intends to promote ONDC, which is a first-of its- kind, global initiative  aimed  at  democratizing  digital  commerce  in  India.  Government's endeavour  is  to  bring  parity  and  provide  a  level  playing  field  to  large  and small  scale enterprises, facilitating efficient exchange of goods and services.

- (b): The  adoption  of  an  Open  Network  for  e-Commerce  can  strengthen  small traders in several ways:
-  Small  traders  would  be  able  to  use  any  ONDC-compatible  applications instead  of                        being  governed  by  specific  platform-centric  policies.  This  will provide multiple options to small businesses/traders to be discoverable over the network and conduct business.
-  ONDC provides small traders with a network to reach a broader customer base and thus greater opportunities for growth.
-  ONDC provides a level playing field to small traders eliminating the high entry barriers.
-  ONDC  offers  all  businesses  easy participation in digital  commerce irrespective of            size, location, or digital quotient.
-  Small traders onboarding to ONDC can expose them to a larger audience and help them establish their brand in the market.
-  ONDC  offers  opportunities  to  enhance  business  efficiencies  through  a reduction in cost overheads (e.g., acquisition costs, digital presence cost) and inventory costs across businesses in India.
-  Small  traders  discoverable  through  the  ONDC  network  can  enable increased trade of locally manufactured goods in India, thereby multiplying the investment and production of small and medium enterprises.
-  ONDC fosters innovation in the e-commerce space and small traders can benefit from technological advancements, enhancing their capabilities and competitiveness.
-  Enhanced trade can help in economic development and livelihood creation opportunities  across  the  digital  commerce  value  chain  i.e.,  logistics, packaging, final-mile delivery, etc.
- (c) & (d): Yes, the Government recognizes the importance of empowering small traders and promoting local businesses through ONDC. The Government proposes   to enable the active participation of local customers for the benefit of small traders by:
-  Joint  promotion  campaigns  with  industry  associations  and  Government departments to encourage local customers to support small traders and buy from nearby stores available on the ONDC network.
-  Organizing training and capacity-building programs for small traders which can  help  them  improve  their  digital  presence,  marketing  strategies,  and improved customer service. This can enhance their competitiveness and attract more local customers.
-  Educating consumers about ONDC through ONDC Academy and ONDC Sahayak, the benefits of supporting local businesses and the impact of their choices on the local economy.
-  Investments  in  developing  robust  digital  infrastructure,  including  reliable internet connectivity, secure network and payment gateways, automated grievance redressal mechanism and last-mile delivery facilities to facilitate smooth e- commerce transactions for small traders and customers.
-  ONDC is working actively with various departments of all the States and UTs.  Nodal  Officers  for  each  state  and  UT,  have  been  appointed  to accelerate  state  level  engagement  plans.  Various  ONDC  awareness campaigns and workshops have been organised across the country.

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