India’s Revolutionary ONDC Policy on Hold, Thanks to Data Privacy Issues

The ONDC policy is withheld until the data privacy concerns are resolved

The Open Network for Digital Commerce (ONDC) is now undergoing stabilization, and the Indian government is considering introducing an e-commerce framework once data privacy concerns have been resolved. The Indian government is promoting the ONDC effort to create an infrastructure for the nation's e-commerce sector, similar to what UPI achieved for the country's payments sector. The regulation has the potential to improve India's e-commerce environment. In the end, customers will profit from the ONDC project since it will encourage competition and innovation in the e-commerce sector. The policy is still being developed, but it is anticipated to cover a number of important issues, such as data protection, utilizing platforms with foreign ownership, and supporting domestic e-commerce companies. An important step toward promoting open networks for all facets of trading products and services over digital or electronic networks is the Ministry of Commerce's recent introduction of ONDC.

To the detriment of vendors, the Indian government contends that foreign-funded private businesses Flipkart and Amazon currently control the majority of the country's e-commerce market. By granting equitable access to the market for all participants, whether they are domestic or foreign, the ONDC project seeks to level the playing field. In India, e-commerce currently accounts for about 1 to 2 percent of the nation's overall retail sector. The majority of retail transactions have not yet been converted to digital. The administration has concluded that the transition from physical to digital commerce is unavoidable. Flipkart, Amazon, Reliance, or Tata could now seize that shift, or we could design a system where there would be 40 platforms rather than just four. India is giving the nation a chance to build those 40 platforms through ONDC as compared to America where you mostly have eBay and Amazon. According to MediaNama, independent competition attorney Rahul Rai.

Additionally, the project will develop a set of requirements for online transactions that will be advantageous to both buyers and sellers. India's e-retail business is anticipated to grow from US$150 billion to US$170 billion by 2027, according to Bain & Company. The government is hoping that by fostering competition and innovation in the e-commerce sector, the ONDC project will ultimately benefit consumers.

In India, there isn't yet a separate e-commerce policy. On several topics, including worries about security and data privacy, various parties, including online retailers, have been looking for clarification. According to reports, the government is also considering whether to introduce legislation to control non-personal data. The action is being taken as the government works to encourage emerging technologies like artificial intelligence and data analytics and accelerate the expansion of the nation's digital economy.

The Federation of Indian Chambers of Commerce and Industry reported that the policy is anticipated to have an impact on the Indian e-commerce market, which is predicted to reach US$188 billion in 2025 — more than double from US$64 billion in 2020 — given the growing consumer preference for online shopping. Although the project is still in its early phases, it has the potential to change India's e-commerce environment for the betterment of all parties.

By 2030, India will have 500 million online shoppers, making it the third-largest market worldwide. As more individuals access the internet via mobile devices and more via desktop computers in the years to come, this figure will only increase. The main difficulty presented by this increase, though, is data privacy. Since there is no comprehensive data privacy law in India, e-commerce businesses may acquire, store, and use customer data in ways that are not wholly clear or equitable to them. Before implementing any e-commerce policies, the government is reportedly looking at solutions to these problems.