PIB Summaries 06 January 2025

Content:

1. Revolutionizing Digital Commerce – The ONDC Initiative
2. Draft Digital Personal Data Protection Rules

Revolutionizing Digital Commerce – The ONDC Initiative

Introduction

The Open Network for Digital Commerce (ONDC) is a transformative initiative launched by the Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce and Industry, Government of India.

 It aims to democratize digital commerce by creating an open network based on open-sourced methodology, open specifications, and network protocols. Launched in April 2022, the initiative seeks to dismantle the dominance of large e-commerce platforms, promoting inclusivity and innovation.

Relevance : GS 2(Governance), GS 3(Economic Development )

Important objectives of ONDC

• Democratization of Commerce: Breaking the monopoly of large e-commerce platforms by enabling interoperability across networks.

• Inclusivity: Empowering small businesses, retailers, and local artisans to participate in digital marketplaces.

• Cost Efficiency: Reducing customer acquisition costs and transaction processing fees for sellers.

• Market Expansion: Bridging regional and linguistic gaps to bring untapped markets into the digital fold.

• Customer Empowerment: Providing buyers with access to a broader array of sellers, increasing choices and promoting competition.

How ONDC Works

ONDC operates on open network protocols, facilitating seamless interaction between participants.

Key features include:

• Decentralized Architecture: ONDC does not own or operate e-commerce services but enables interconnectivity.
• Open Protocols: Ensuring participation from any platform adhering to standardized APIs.
• Role Segregation: Participants are classified as Buyer Applications, Seller Applications, Logistics Providers, and Technology Enablers.

Domains on the ONDC Network

Benefits of ONDC

• Market Democratization: Ensures equal opportunities for businesses of all sizes.
• Economic Growth: Boosts digital commerce activity, contributing to GDP.
• Job Creation: Expands employment opportunities in technology, logistics, and ancillary services.
• Consumer Empowerment: Offers diverse options and competitive pricing for consumers.

ONDC for MSMEs

The ONDC initiative provides significant opportunities for Micro, Small, and Medium Enterprises (MSMEs), helping them overcome challenges such as limited digital reach and high platform costs.

Benefits:

• Increased Visibility: MSMEs gain access to a nationwide customer base.
• Reduced Costs: Interoperable protocols lower platform service expenses.
• Skill Development: Training programs equip MSMEs with digital tools.
• Fair Competition: Enables small businesses to compete with larger players.

MSME-TEAM Initiative:

The Ministry of MSME launched the MSME Trade Enablement and Marketing (TEAM) Initiative to assist five lakh MSMEs in onboarding the ONDC platform. Key features include:

• Financial assistance for catalog preparation, logistics, and packaging.
• Focus on onboarding women-owned MSEs.
• Workshops in Tier 2 and Tier 3 cities to increase outreach.

Collaborations with Government Departments

ONDC collaborates with various government bodies to expand its reach and impact:

• Ministry of MSME: Onboarding small businesses and local artisans.
• Ministry of Agriculture & Farmers Welfare: Onboarding Farmer Producer Organizations (FPOs) and farmers.
• Digital India Program: Leveraging digital infrastructure for widespread access.
• Startup India: Promoting entrepreneurship by integrating startups into the ONDC ecosystem.
• Department of Fisheries: Empowering traditional fishermen and entrepreneurs through digital platforms.

Achievements of ONDC

• Pilot Programs: Successful implementation in cities like Bengaluru and Delhi.
• Expansion: Services have grown from two categories to multiple domains, including Mobility, Fashion, Electronics, and B2B.
• Geographical Coverage: As of January 2024, ONDC covers over 616 cities.
• Fair Price Shops: Digital onboarding of Fair Price Shops in Himachal Pradesh as part of the Digital India initiative.

ONDC Startup Mahotsav

DPIIT organized the ONDC Startup Mahotsav on May 17, 2024, in New Delhi, celebrating the collaboration between Startup India and ONDC. Key highlights include:

• Participation of 5,000 startups.
• 125 ecosystem stakeholders signed Letters of Intent (LoI) to collaborate with ONDC.
• Panel discussions on building a collaborative future for Indian e-commerce.

Government Initiatives to Increase Awareness

ONDC has undertaken various measures to increase awareness and adaptation:

• Awareness Workshops: Conducted with industry associations like RAI, PHDCCI, FICCI, NASSCOM.
• Virtual Training: Open digital sessions for startups, students, and business leaders.
• Handbook Distribution: Available in 14 languages to guide sellers.
• Feet on Street Program: Identifying and educating sellers about ONDC.
• CSC Collaboration: Connecting villages to the national digital market.
• ONDC Academy: A repository of educational content for network participants.

Conclusion

ONDC represents a significant step toward a more equitable digital commerce ecosystem in India. By addressing monopolistic practices and empowering smaller players, it has the potential to transform the e-commerce landscape. The initiative is not only a technological framework but also a vision for fostering inclusivity, innovation, and economic growth.

Draft Digital Personal Data Protection Rules

Introduction

The Draft Digital Personal Data Protection Rules aim to safeguard citizens’ rights concerning their personal data. They operationalize the Digital Personal Data Protection Act, 2023 (DPDP Act), emphasizing simplicity, clarity, and a balanced approach between regulation and innovation.

These rules are designed to address digital harms, unauthorized data usage, and personal data breaches while fostering trust and ensuring that citizens benefit from India’s rapidly expanding digital economy.

Relevance : GS 2(Governance )

Features

1. Citizen-Centric Framework:
   1. Data Fiduciaries must provide clear and accessible information about data processing.
   1. Citizens can demand data erasure, appoint digital nominees, and access user-friendly mechanisms to manage their data.

• Empowerment of Citizens:
  • Informed consent provisions.
  • Right to erasure and grievance redressal.
  • Enhanced trust in digital platforms.
  • Online safety measures for children, empowering parents and guardians.

Balance Between Innovation and Regulation

• India’s model uniquely balances innovation with regulation.
• Encourages economic growth while prioritizing citizen welfare.
• Lesser compliance burdens for smaller businesses and startups.
• A transition period for all stakeholders to ensure smooth compliance.

Digital-First Approach

• The rules adopt a “digital by design” philosophy:
  • Digital consent mechanisms.
  • Digital grievance redressal.
  • The Data Protection Board functions as a digital office.

• Citizens can approach the Board digitally, and complaints are adjudicated without requiring physical presence.

• Workflows are optimized for speed and transparency, reflecting India’s forward-looking governance approach.

Addressing Stakeholder Concerns

1. Graded Responsibilities:
   1. Lower compliance burdens for startups and MSMEs.
   1. Higher obligations for Significant Data Fiduciaries.

• Sector-Specific Measures:
  • Sector-specific data protection measures complement the core framework.

• Adjudication and Penalties:
  • The Data Protection Board considers factors like the gravity of defaults and mitigation efforts while imposing penalties.
  • Voluntary undertakings by Data Fiduciaries can result in proceedings being dropped.

• Impact Assessments:
  • Annual data protection impact assessments and audits for Significant Data Fiduciaries ensure compliance.

Inclusive Approach

• The draft rules are based on inputs from various stakeholders and global best practices.
• Grounded in the principles of the DPDP Act.
• The Ministry of Electronics and IT has invited feedback through the MyGov platform until 18 February 2025, reflecting an inclusive law-making approach.

Awareness Initiatives

• The government plans a comprehensive awareness campaign to educate citizens about their rights and responsibilities under the new framework.
• These initiatives aim to foster a culture of data responsibility.

Conclusion

India’s draft Digital Personal Data Protection Rules demonstrate leadership in shaping an equitable digital future. They reflect a commitment to protecting citizens’ digital personal data while promoting innovation-driven and inclusive growth