India’s Open Network for Digital Commerce is a critical pillar in the government’s strategy to democratise digital commerce and challenge the dominance of private e-commerce giants. Launched in 2022, ONDC seeks to create a unified, open platform that connects buyers and sellers across applications, offering a level playing field for businesses of all sizes—particularly small and medium enterprises.
The platform is expected to play a pivotal role in the projected fivefold growth of India’s digital commerce market, which is expected to rise from $60–70 billion in 2022 to $320–340 billion by 2030. Much of this expansion is anticipated to be driven by ONDC, which offers a fundamentally different model from conventional online marketplaces.
Unlike traditional platforms where visibility is limited to the user base of a particular app, ONDC allows sellers to be discoverable across multiple platforms. Once a product is listed on the network, it becomes visible to any buyer using any participating application. As T Koshy, the former MD and CEO of ONDC, once explained, the goal is to ensure every catalogued product or service is accessible through a common digital infrastructure, streamlining the user experience.
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Early gains, shifting momentum
By early 2025, ONDC had reached over 1,200 cities, onboarded more than 7 lakh sellers, and expanded its network to 72 seller apps—up from just 31 in the first quarter of FY24. The number of buyer apps more than doubled, rising from nine to 22 over the same period.
March 2025 marked a peak with 20.4 crore transactions on the platform. However, the momentum in retail orders has recently slowed, dipping from 65 lakh in October 2024 to 45 lakh in February 2025. In contrast, mobility and logistics segments have surged, with mobility now accounting for 56% of total transactions—up from 40% six months ago.
India’s e-commerce market ($ billion)
Key players such as Flipkart, Paytm, Amazon, and PhonePe’s Pincode have adopted ONDC protocols, broadening the platform’s reach across sectors like food delivery, healthcare, and fintech. Companies such as Ola, Meesho, Khojle.com, Domino’s, and Namma Yatri are also part of the network. Importantly, over 80% of ONDC’s merchant base consists of small sellers, highlighting its potential to bring micro and small enterprises into the digital fold at minimal cost.
The platform has also signed memoranda of understanding with state governments including Nagaland and Madhya Pradesh to enhance local adoption and bring grassroots sellers online.
e-commerce: Challenges to scale and perception
Despite these achievements, ONDC has yet to significantly dent the market share of entrenched e-commerce giants. Flipkart and Amazon collectively command 83% of the Indian e-commerce market, with ONDC’s penetration still modest at 4.3%, even with full government backing.
User adoption also faces friction. ONDC’s value proposition remains unclear to many consumers, who report difficulties with product availability, inconsistent quality, and a limited selection. The platform’s complexity and decentralised architecture can pose usability challenges, especially in a market accustomed to the seamless, end-to-end services of dominant private platforms.
Furthermore, ONDC’s decision to reduce cash incentives in mature sectors like food delivery has dampened growth in recent months. Combined with weakening urban consumption and a broader demand slump, these factors have slowed ONDC’s expansion in key retail categories.
Trust, infrastructure, and the way ahead
ONDC’s public utility-like model—akin to that of the Unified Payments Interface (UPI)—means it operates without a direct revenue stream, focusing instead on building interoperable digital infrastructure. But this structure comes with its own set of vulnerabilities.
One of the most critical is dispute resolution. While users can currently raise complaints through their respective buyer or seller apps, the absence of a centralised grievance redressal mechanism creates room for unresolved issues, fraud, and customer dissatisfaction. There are also no standard protocols for what happens if the platform nodes themselves fail to resolve a conflict.
For ONDC to evolve into a trusted national utility, robust systems ensuring consumer protection, service consistency, and seller accountability must be established. Seamless user experience—across browsing, ordering, payments, delivery, and post-sales support—will be key to driving adoption.
ONDC – A long road, but a worthy one
India has seen its share of digital infrastructure projects stumble at launch before finding their stride. Aadhaar and UPI both faced scepticism and technical challenges before becoming transformative success stories. Industry observers believe ONDC can follow a similar trajectory—provided it receives continued investment, strong governance, and sustained policy support.
With ambitions to capture 25% of India’s digital commerce market within the next two years and grow the overall e-commerce market to $200 billion by FY 2027-28, ONDC’s scale-up will also require greater private participation and capital infusion.
Its true test will lie in whether it can ensure trust, deliver consistent experiences, and bridge the digital divide for small businesses. If successful, ONDC could not only redefine e-commerce in India but also serve as a global model for inclusive digital trade infrastructure.