ONDC, the Open Network for Digital Commerce, lets a shopper on one app discover and buy from sellers listed on completely different apps. It is India's attempt to turn e-commerce from a set of walled-garden platforms into an open, interoperable network — the way email lets a Gmail user message someone on Outlook.

India's digital commerce has long been dominated by a handful of large platforms that control their own seller bases, pricing, and rules. ONDC, a government-backed initiative, was created to break those walls and let businesses of any size compete on equal terms.

This article explains what ONDC is, the problem it solves, how it works, the protocol behind it, its growth so far, who benefits, how it compares with traditional e-commerce, and the challenges that remain.

What is ONDC?

ONDC is not a company, an app, or a single platform, but a set of open standards that let different e-commerce platforms interoperate. The Department for Promotion of Industry and Internal Trade (DPIIT), under India's Ministry of Commerce and Industry, established it as a Section 8 non-profit company on 31 December 2021, according to ONDC.

Its mission is to open up digital commerce so participants of every size can take part:

"ONDC aims to democratise digital commerce by creating an open, interoperable network where businesses of all sizes can participate on equal footing." (Open Network for Digital Commerce / DPIIT, mission statement.)

The model is inspired by UPI, which turned digital payments from platform-locked systems into an interoperable network anyone could access. ONDC applies the same idea to buying and selling goods and services, aiming to make the underlying commerce rails a shared public utility rather than the property of any single company.

The problem ONDC solves

ONDC targets a stark gap in access: of more than 12 million Indians who earn a living buying and selling goods, only a tiny fraction historically reached online customers. Traditional platforms operate as walled gardens, each with its own onboarding, pricing, and rules.

For a small business in a tier-2 city, joining those platforms has meant complex onboarding, commissions as high as 25% on categories like food delivery, and competing against deep-pocketed brands for visibility. Many sellers wanted to go digital but found the barriers prohibitive.

Buyers face the mirror image of the problem. The best price for a product may sit on one app but never appear on another, and purchase history, preferences, and reviews stay siloed within each platform. ONDC is designed to dismantle both sets of barriers at once.

How ONDC works

ONDC operates through 3 connected components that together replace the single-platform model. None of them is a destination a shopper thinks about; they work behind the familiar act of searching and buying, connecting the network's 7.6 lakh-plus sellers to buyers across many apps.

Buyer applications

Buyer apps are the consumer-facing entry points to the network, such as Paytm, Pincode by PhonePe, and Magicpin. A search on one of these apps can surface offerings from thousands of sellers across the entire ONDC network, not just that app's own inventory.

Seller applications

Seller apps are the supply side, helping businesses list products, manage inventory, and fulfil orders. A small bookshop in Kerala can list on a seller app and become discoverable to anyone browsing any buyer app connected to ONDC — the interoperability is the point.

The gateway layer

Gateways are the behind-the-scenes orchestrators. When a shopper searches, the gateway broadcasts the query to relevant seller apps based on location and availability, then aggregates the responses into unified results that the buyer app displays.

The Beckn protocol behind ONDC

ONDC runs on the Beckn protocol, an open standard for decentralised commerce that its creators describe as the first of its kind globally. It was developed by technologists including Nandan Nilekani, Pramod Varma, and Sujith Nair, several of whom were instrumental in building India's earlier digital public infrastructure.

Beckn functions much like HTTP for websites or SMTP for email: it lets different commerce platforms communicate without a central intermediary. The protocol standardises the 4 core stages of a transaction — discovery, ordering, fulfilment, and post-fulfilment — across the network, using a modular microservices architecture that, as IBM notes, platforms can adopt piece by piece rather than rebuilding their systems at once.

ONDC's growth in numbers

ONDC's scale has expanded rapidly from a five-city pilot in April 2022. The network crossed roughly 20.4 crore (204 million) cumulative transactions by March 2025, with about 1.6 crore (16 million) orders in that month alone, according to ONDC Open Data.

The seller base has grown just as fast, reaching more than 7.6 lakh (760,000) sellers and service providers by March 2025, of which about 85% are small businesses. The network now spans well over 1,000 cities and towns.

The category mix has also broadened. After ride-hailing dominated early volumes, grocery and food and beverage now contribute more than half of all orders, and over 70% of demand comes from non-metro, tier-2 and tier-3 areas — exactly the inclusive spread ONDC was built to unlock.

The composition of new sellers reinforces that story. A large share of recent registrations come from non-metro cities, and a meaningful portion are women-led or rural enterprises, signalling that the network is reaching first-time digital sellers rather than simply migrating established online brands.

Who benefits from ONDC?

ONDC's benefits flow to three groups: small sellers, consumers, and the wider digital economy. Each gains from the shift away from platform-controlled commerce.

Small sellers

Small sellers gain a lower-cost route to digital customers. Where traditional platforms charge roughly 15–30% commission, ONDC operates at about 2–8%, and sellers retain their own customer data rather than ceding it to a platform. For a neighbourhood shop, that difference can be the line between digital commerce being unviable and being profitable.

Consumers

Consumers gain choice and competition. Because a single search can reach sellers across the whole network rather than one platform's inventory, sellers compete more directly on price and quality, which can lower costs in categories like food delivery where commissions are high.

The digital economy

The macro opportunity is large. India's e-commerce market is projected to grow from about US$125 billion in 2024 to US$345 billion by 2030, according to IBEF, while online penetration sits at just 4–5% of retail, far below the 15–20% of developed markets.

"India's e-commerce market is projected to grow from approximately US$125 billion in 2024 to US$345 billion by 2030." (India Brand Equity Foundation (IBEF), 2025.)

ONDC aims to lift digital-commerce penetration sharply as it scales, and independent projections such as one cited by Inc42 put the network's potential GMV around US$48 billion by 2030.

ONDC vs traditional e-commerce

ONDC differs from conventional platforms on almost every structural dimension, from cost to data ownership. The table below summarises the core contrasts.

Dimension	Traditional platforms	ONDC
Commission	~15–30%	~2–8%
Seller onboarding	Platform-specific, often restrictive	Open access via any seller app
Data ownership	Platform owns customer data	Sellers retain data rights
Customer visibility	Limited to one platform's inventory	Network-wide discovery
Market control	Platform-centric	Decentralised and interoperable

The single largest practical difference is the commission gap. Cutting fees from a quarter of a sale to single digits is what makes digital commerce financially viable for the small sellers ONDC targets.

Who is using ONDC today?

ONDC has attracted both consumer apps and large enterprises, with more than 4 prominent buyer apps already live. These include Paytm, Pincode by PhonePe, Magicpin, and Mystore, each connecting shoppers to the wider network.

Major corporations have committed too. PhonePe invested in building its e-commerce platform on the network, and partnerships with Google and Meta aim to integrate ONDC into widely used services — Google with mapping and transit ticketing, and Meta to bring conversational commerce to small businesses via WhatsApp, with a stated ambition to enable around 500,000 MSMEs. Established marketplaces have also begun participating, signalling that the open model is being taken seriously across the industry.

The challenges ONDC still faces

ONDC's open model creates real obstacles that established single platforms do not face. Building new infrastructure while incumbents hold head starts of more than 10 years is difficult on several fronts.

Integration and quality

Technical integration remains messy in practice, because legacy systems do not retrofit easily and many small sellers lack the capability to integrate without help. Maintaining consistent quality across an open network of hundreds of thousands of sellers is also harder than on a tightly controlled platform; ONDC's DigiReady certification helps sellers self-assess readiness, but enforcing standards at scale is an ongoing task.

Awareness and trust

Most Indian consumers still recognise individual platforms rather than ONDC itself. Building awareness that any ONDC app opens the whole network, and earning trust against familiar brands, requires sustained education and time.

Where ONDC is headed

ONDC's trajectory points toward broader categories and deeper geographic reach. The network has expanded from a handful of domains at launch to more than a dozen, spanning food, grocery, fashion, electronics, mobility, and pilots in financial services.

Geographic penetration is the larger prize. With rural online shopping growing quickly and over 70% of ONDC demand already coming from non-metro areas, the network is well suited to tier-2 and tier-3 markets where local sellers and buyers are early in their digital journeys.

Financial services are an emerging frontier. Pilots in credit and other financial products suggest ONDC could become a distribution layer for more than physical goods, extending the open-network model into lending and insurance over time.

If ONDC sustains its momentum, it could reshape not just Indian commerce but the global template for whether digital-commerce infrastructure is run by private platforms or treated as open public infrastructure.

Methodology

This article draws on more than 4 source types — ONDC's own documentation and open-data dashboard, DPIIT, the Beckn Protocol project, and IBEF for e-commerce market data — alongside reputable reporting on network milestones. Quotations reflect the published positions of the cited sources.

Network figures — transactions, sellers, and city coverage — are point-in-time milestones that grow continually; the most recent official figures available at the time of the publication's last review are used and dated to their reporting period. Market-size and GMV projections are estimates that vary across sources and are attributed accordingly.

Frequently asked questions

What is ONDC in simple terms?

ONDC is an open network that lets buyers on one shopping app discover and purchase from sellers listed on other apps. It is a set of standards, not a single app, created by DPIIT as a Section 8 non-profit in December 2021.

How is ONDC different from Amazon or Flipkart?

Amazon and Flipkart are closed platforms that control their own sellers, data, and fees of roughly 15–30%. ONDC is an open, interoperable network with commissions around 2–8%, where sellers keep their data and are discoverable across many apps.

How big is ONDC now?

ONDC crossed about 20.4 crore cumulative transactions by March 2025, with roughly 1.6 crore orders that month, more than 7.6 lakh sellers, and coverage across over 1,000 cities and towns.

How can a small business join ONDC?

A seller chooses an ONDC-compatible seller app, assesses readiness (for example via DigiReady certification), sets up inventory and order processing, lists products, and goes live — after which the catalogue becomes discoverable across ONDC buyer apps.

Key takeaways

ONDC is an open, interoperable commerce network — not an app — established by DPIIT as a Section 8 non-profit on 31 December 2021, modelled on the success of UPI.
It had crossed roughly 20.4 crore cumulative transactions by March 2025, with about 1.6 crore monthly orders, 7.6 lakh+ sellers (about 85% small businesses), and 1,000+ cities covered.
Commissions of about 2–8%, versus 15–30% on traditional platforms, are the core advantage for small sellers, who also keep their customer data.
Grocery and food now drive over half of orders, and more than 70% of demand comes from non-metro, tier-2 and tier-3 areas.
Integration complexity, quality control at scale, and low consumer awareness remain the main hurdles to ONDC's ambitions.

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