The Department of Food and Public Distribution has initiated a pioneering pilot project to incorporate 11 fair price shops (FPS) from Una and Hamirpur districts of Himachal Pradesh into the Open Network Digital Commerce (ONDC) platform. The introduction of this project by Shri Sanjeev Chopra – Secretary, Department of Food and Public Distribution, sets the stage for potential adoption state-wide and nationwide. Aligned with the goals of Digital India, this effort signifies a significant shift towards digitising essential services, aiming to modernise FPS operations and improve income opportunities for FPS dealers while enhancing satisfaction for beneficiaries. He commended MicroSave Consulting (MSC) for its role in organising the pilot rollout. This will give FPS dealers a digital presence in the marketplace and access a much broader customer base beyond National Food Security Act (NFSA) beneficiaries, and a fair competition platform against larger retailers and e-commerce platforms. Beneficiaries who encounter challenges with online purchases can seek assistance from FPS dealers for placing digital orders.
In December 2021, ONDC, a government-backed platform, was launched as a Section 8 company with the Quality Council of India and Protean eGov Technologies Limited as founding members. It operates in over 500 cities nationwide, aiming to revolutionize e-commerce through open-network transactions for goods and services.
In India, where over 12 million sellers earn their livelihood, only about 15,000 sellers (0.125% of the total) have embraced e-commerce, excluding many from small towns and rural areas. ONDC seeks to bridge this gap, aspiring to elevate e-retail penetration from 4.3% to its maximum potential, ensuring inclusive participation from sellers of all types and sizes. The mission is to enable widespread and comprehensive seller participation in the digital marketplace, benefiting Micro, Small, and Medium-sized Enterprises (SMEs) that face hefty transaction costs imposed by e-commerce platforms. Lower transaction costs allow SMEs to conduct business with distant clients.
Recently, Chennai Metro Rail became the inaugural metro service on the ONDC platform for ticketing services. In November 2023, Hindustan Unilever (HUL) strategically announced support to onboard approximately 1.3 million kirana stores onto ONDC. This move is expected to empower kirana stores, enabling effective competition with e-commerce and quick-service grocery retailers through HUL’s Shikhar module for seamless online integration.
The ONDC platform has established an advisory council to accelerate adoption, featuring notable members such as Nandan Nilekani from Infosys and R S Sharma, CEO of the National Health Authority.