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Investing in India: ONDC, how is India protecting its digital sovereignty and boosting its e-commerce?

Last week, I explored the Indian tech ecosystem in Bangalore, Chennai, and Pondicherry with Corentin Orsini,Francisque LEBRUNIEagainstFrédéric BAECKE.

I was impressed by an Indian government initiative designed to help local and rural businesses—which are currently underserved by digital tools—grow online, while also providing a safeguard against foreign e-commerce and payment giants like Amazon and Alibaba.

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The creation of ONDC

The Indian government recently launched ONDC (Open Network for Digital Commerce), a centralized, secure digital platform for payments and transactions across India.

Businesses will be able to list their products and services on this platform and sell them directly to consumers. Shoppers will find products from Amazon alongside those from local merchants, all in one place.

E-commerce penetration is set to skyrocket, and competition will intensify! This will also make it easier for startups to grow. Small merchants, including those in rural areas, will be able to create applications in local Indian languages via ONDC.

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How ONDC works

Electronic transactions will take place without intermediaries, powered by technologies like blockchain, IoT, and AI. This will help reduce costs and improve profitability.

The government will be able to distribute financial aid directly to beneficiaries, cutting out middlemen, reducing administrative costs, and increasing the efficiency of aid programs.

Paytm, BharatPe, and Infibeam—three major Indian mobile payment and e-commerce companies—are set to use ONDC to enhance transactions on their platforms. Zoho will also use it to improve its financial transactions, and startups are beginning to plug into the network. Hopsticks, one of our food delivery startups in mid-sized cities, has already integrated it into its roadmap.

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Moving forward, this will spread to more traditional businesses, and it will be important to keep a close eye on this promising initiative for the Indian digital ecosystem. Once again, innovation is driving a country's growth!

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If you are interested in investing in India, Francisque LEBRUNIE is our team member on the ground! He sends us a huge amount of deal flow, so if you want to join the adventure, click here.