The ONDC Experiment Is Working. Now It Needs the Right Regulatory Safeguards.

ONDC's Genuine Promise

India's Open Network for Digital Commerce is, by any objective measure, one of the most interesting policy experiments in the history of digital governance globally. The core insight — that the vertically integrated aggregator model that has come to dominate global e-commerce is not inevitable, that the functions of discovery, logistics, and payment can be separated and provided as interoperable, open-access services — is both intellectually powerful and empirically validated. Small sellers who list on ONDC pay transaction fees that are, in verified studies, 30 to 60 per cent lower than equivalent fees on closed platforms.

This is not a minor difference. In categories with thin margins — grocery, local services, small-scale manufacturing — a 40 per cent reduction in platform fees is the difference between a viable business and an unviable one. ONDC's potential to preserve the economic viability of the micro-merchant and neighbourhood service provider sector — which employs an enormous number of Indians whose livelihoods are threatened by the aggregation and centralisation of e-commerce — gives the initiative significance well beyond its present transaction volumes.

The Problems That Are Beginning to Emerge

But ONDC is now scaling, and with scale come the problems that open-protocol architectures face when they encounter the full complexity of real-world commerce. The two most significant emerging challenges are counterfeit product listings and consumer grievance resolution. On closed platforms, the platform operator is responsible for the quality of seller listings and for mediating consumer disputes. On ONDC, that responsibility is distributed across buyer applications, seller applications, and the underlying network — a structure that creates significant ambiguity about who bears accountability when a consumer receives a counterfeit product or is unable to return a defective item.

The cases are not hypothetical. Consumer forums in Delhi and Mumbai have documented a meaningful number of ONDC transaction disputes in which consumers were unable to identify a responsible party to address their complaint. Each application — buyer-side and seller-side — pointed to the other as responsible, and the ONDC Foundation itself currently has no direct consumer-facing dispute resolution mandate.

What Governance Is Needed

The prescription is not to recentralise ONDC's architecture. The open-protocol model should be preserved. What is needed is an independent Network Ombudsman with statutory authority to adjudicate cross-application disputes, a unified consumer complaint portal with mandatory response timelines, and a minimum quality standard for seller onboarding that all participating applications must enforce. None of these safeguards requires abandoning the open-protocol design. They require the same maturity of institutional accompaniment that every successful market structure requires when it reaches significant scale. ONDC has earned the right to that investment.