Lok Sabha Question No. 194 (STARRED), answered on 2023-08-02
Subject: Open Network for Digital Commerce
Ministry: COMMERCE AND INDUSTRY
Asked by: Gyaneshwar Patil, Nayab Singh

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

## LOK SABHA

STARRED QUESTION NO. 194.

TO BE ANSWERED ON WEDNESDAY, THE 02 ND  AUGUST, 2023.

## OPEN NETWORK FOR DIGITAL COMMERCE

- *194.  SHRI GYANESHWAR PATIL: SHRI NAYAB SINGH:

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

- (a) the  details  of  achievement  and  the  policy  of  the  Government  regarding  the newly launched Open Network for Digital Commerce (ONDC);
- (b) the manner in which small traders are likely to be empowered through adoption of 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 मंत्री (श्री पीयूष गोयल) THE MINISTER OF COMMERCE & INDUSTRY (SHRI PIYUSH GOYAL)

- (a) to (d): A statement is laid on the table of the House.

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## STATEMENT REFERRED IN REPLY TO PARTS (a) TO (d) OF THE LOK SABHA STARRED QUESTION NO. 194 FOR ANSWER ON 02.08.2023

- (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), over the period and has expanded the categories to Mobility, Fashion, Beauty and Personal Care, Home & Kitchen, Electronics and Appliances, Health & Wellness and B2B.
-  The  Network  Participants  on  ONDC  have  shown  tremendous  increase, onboarding several sellers and service providers to the network.
-  The sellers and service providers are spread across 300+ 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 potentially empower 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.
-  Organising 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,  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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