Technology

ONDC explained: India’s open network for commerce

ONDC lets a shopper on one app buy from a seller listed on a different app. Here is how that works, who runs it, and what the numbers say about where it has succeeded and where it has struggled.

Chander Prakash

By Founder & Editor

5 min read

Illustrative cover: ONDC explained: India's open network for commerce
Illustration: Pointales

ONDC, the Open Network for Digital Commerce, is a set of shared rules that lets any shopping app talk to any seller’s app. On Amazon or Flipkart, the buyer and seller must both be on the same platform. On ONDC, a shopper using one app (say, Paytm or Magicpin) can order from a shop that listed its products on a completely different app. ONDC itself does not sell anything, hold inventory or run a consumer app. It is closer to UPI than to a marketplace: a common language that many companies agree to speak.

A protocol, not a platform

The commerce ministry describes ONDC as an initiative of the Department for Promotion of Industry and Internal Trade (DPIIT), launched in April 2022, that uses “open specifications and open network protocols independent of any specific platform” (PIB). It adds that ONDC “does not own or operate e-commerce services” and acts as an enabler of interconnection.

Technically, ONDC’s API specifications are built on the open-source Beckn protocol, as its published specification on GitHub shows (ONDC on GitHub). A protocol is a fixed set of message formats: if every app formats a “search”, “order” or “cancel” the same way, they can work together without bespoke integrations.

This fits the wider idea of digital public infrastructure explained in our pillar, India Stack explained.

Who does what on the network

Companies that connect to ONDC are called network participants. The main roles, as described by the government, are:

RoleWhat it doesExample of who plays it
Buyer appWhere the customer searches, orders and paysConsumer apps that have joined ONDC
Seller appLets shops and brands list products and accept ordersPlatforms serving small retailers and brands
Logistics providerPicks up and delivers ordersDelivery and courier firms on the network
Technology service providerBuilds software for the other participantsIT vendors
GatewayBroadcasts a buyer’s search to the relevant seller appsRun within the network

Sources: PIB, ONDC.

The network started with two categories, food and beverage and grocery, and expanded into mobility, fashion, beauty, electronics, home and kitchen, health and B2B trade (PIB). Later additions include financial services, agriculture and education (PIB).

How an order flows

ONDC’s developer documentation lays out the message sequence that every order follows (ONDC developer docs). In plain terms:

  1. Search. You type “atta” into a buyer app. The app sends a search request, which a gateway passes to seller apps on the network.
  2. Catalogue. Seller apps reply with matching products, prices and delivery estimates from their shops.
  3. Select. You pick an item. The buyer app checks the latest price and availability with that seller app.
  4. Initialise. The buyer app sends your address and billing details, and the seller app returns final charges and payment terms.
  5. Confirm. You pay, and the order is confirmed on both sides.
  6. Fulfil. The seller (or a logistics provider on ONDC) packs and delivers, while status updates flow back to your buyer app. Cancellations and returns use the same shared messages.

The protocol also defines how payments are collected and settled between participants. The point is that neither app needed a private contract or custom integration with the other.

Who runs ONDC

ONDC was set up as a non-profit, Section 8 company (the Companies Act category for not-for-profit bodies), incubated at the Quality Council of India, with Protean as co-founder. It has an authorised capital of ₹500 crore, and several public and private banks and financial institutions hold equity in it (PIB).

So ONDC is government-backed but not a government department. It writes the network rules, onboards participants and handles network-level grievances, while the apps compete for customers. Its current managing director and CEO is Vibhor Jain (ONDC).

What has worked

The strongest results so far are outside classic online shopping, going by ONDC’s own figures for FY2025-26 (ONDC):

  • Volume. ONDC says the network enabled 218 million transactions in FY2025-26.
  • Public transport. Metro ticketing is live in Bengaluru, Chennai, Delhi, Kochi, Pune and on all three Mumbai Metro lines, and bus ticketing in 21 cities. ONDC says the network handles over 300,000 tickets a day, bookable through 25+ apps.
  • Ride-hailing. ONDC says ONDC-powered autos and cabs support more than 9 lakh drivers across 55 cities and towns, and that the cooperative Bharat Taxi service uses ONDC as its backbone.

On the retail side, the government reported more than 1.16 lakh retail sellers live on ONDC from over 630 cities and towns as of December 2025 (PIB).

What hasn’t worked as hoped

Retail, the part most people associate with ONDC, has been harder. In March 2025, Business Standard reported that retail orders peaked at 6.5 million in October 2024 and fell to 4.6 million in February 2025, as ONDC cut the monthly cap on incentives from ₹3 crore in July 2024 to about ₹30 lakh (Business Standard).

The same report said PhonePe’s Pincode app had exited ONDC, Paytm had removed ONDC’s shopping icon from its home screen, and ONDC planned a ₹1.5 service fee on seller-app orders above ₹250 from April 2025. Over the same period, mobility transactions rose 47%, from 5.5 million to 8.1 million.

The pattern suggests that discounts funded by incentives drove early retail growth, and that an open protocol alone does not solve the harder problems: reliable delivery, consistent quality and customer service across many independent apps. That is the ground where closed platforms, including fast delivery models described in how quick commerce works, still hold the advantage.

The point: ONDC is not an app but a common protocol that lets any buyer app reach any seller app, run by a government-backed non-profit company. It has found real traction in transport ticketing and ride-hailing, but retail orders fell once incentives were cut. Whether it becomes “UPI for commerce” depends on fulfilment and trust, not just open standards.

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