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Open Network for Digital Commerce

Open Network for Digital Commerce

#GS2 #Government Policies and Interventions

Context:

The Department for Promotion of Industry and Internal Trade (DPIIT) has issued orders appointing an advisory committee for its Open Network for Digital Commerce (ONDC) project that is aimed at curbing “digital monopolies”.

Key Details:

  • Appointment of advisory committee is in the direction of making e-commerce processes open source, thus creating a platform that can be utilised by all online retailers.
  • Earlier, the Ministry of Consumer Affairs released draft e-commerce rules for consumer protection which seek to bring changes to how e-commerce marketplaces, including Amazon and Flipkart, operate after small businesses complained that they misuse market dominance and deep-discounting to gain an unfair advantage.

What processes are expecting to be open-sourced with this project?

  • The ONDC aims at promoting open networks developed on open-sourced methodology, using open specifications and open network protocols, independent on any specific platform.
  • The project to integrate e-commerce platforms through a network based on open-source technology has been tasked to the Quality Council of India.
  • Sellers will be onboarded through open networks. Other open-source processes will include those such as vendor and price discovery; and product cataloging.
  • The format will be similar to the one which is used in the Unified Payments Interface (UPI).
  • Mega e-commerce companies have proprietary processes and technology for these operations.
  • Marketplaces such as Amazon, Flipkart, Zomato, BigBasket and Grofers will need to register on the ONDC platform to be created by DPIIT and QCI.
  • On ONDC, buyers and sellers may transact irrespective of the fact that they are attached to one specific e-commerce portal.

What is the meaning and significance of making something open-source?

  • Making a software or a process open-source means that the code or the steps of that process is made available freely for others to use, redistribute and modify it.
    • For example, while the operating system of Apple’s iPhones — iOS — is closed source, meaning it cannot be legally modified or reverse engineered, Google’s Android operating system is open-source, and therefore it is possible by smartphone OEMs such as Samsung, Xiaomi, OnePlus, etc to modify it for their hardware.
  • If the ONDC gets implemented and mandated, it would mean that all e-commerce companies will have to operate using the same processes.
  • This could give a huge booster shot to smaller online retailers and new entrants.
  • ONDC is expected to digitize the entire value chain, standardize operations, promote inclusion of suppliers, derive efficiency in logistics and enhance value for consumers.

Quality Council of India

  • QCI was set up in 1997 by the government of India jointly with Indian industry (represented by CII, FICCI and ASSOCHAM) as an autonomous body under the administrative control of the Department for Promotion of Industry and Internal Trade, Ministry of Commerce & Industry.
  • QCI establishes and operates the National Accreditation Structure for conformity assessment bodies; providing accreditation in the field of education, health and quality promotion.
  • The Chairman of QCI is appointed by the Prime Minister on the recommendation of the industry to the government.
  • Quality Council of India publishes a quarterly magazine known as “Quality India”
  • Quality Council of India is governed by a Council comprising of 38 members including the Chairman and Secretary General.
  • The Council has an equal representation of Government, Industry and other Stakeholders.

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