With ONDC in place, separate national retail policy takes a backseat
The Indian government is rethinking its retail policy approach. With the Open Network for Digital Commerce (ONDC) expanding rapidly, officials have paused plans for a separate national retail policy. Many of the goals set for the policy are already being met through ONDC, according to government sources.
This marks a significant shift—from traditional policies to a platform-driven strategy that aims to reshape retail through technology.
A Policy on Hold
The Department for Promotion of Industry and Internal Trade (DPIIT) had been developing a national policy to support India’s vast retail sector. The policy was intended to ease regulations and streamline operations for both online and offline players. But progress has now stalled.
A senior official said, “ONDC is achieving much of what the retail policy aimed to do. So, our focus is now on strengthening ONDC.”
This highlights a change in direction. The government now sees ONDC as a core tool to reform retail.
What Is ONDC?
ONDC is a government-backed digital commerce platform launched in 2021. It connects buyers and sellers through an open network. This setup removes the need to rely on dominant platforms like Amazon or Flipkart.
ONDC provides open protocols for cataloging, inventory, payments, and order management. It enables local businesses to sell online without being tied to any single app or platform.
Tackling Fragmentation
One major aim of the original policy was to reduce fragmentation in the retail space. ONDC is already addressing this. It brings local shops, service providers, and small businesses into a unified digital framework.
By standardizing systems and allowing competition on services and pricing, ONDC helps create a level playing field.
Mixed Industry Reactions
Some industry bodies are disappointed by the delay. They hoped the retail policy would resolve other issues like FDI rules, labor laws, and state-level regulatory differences.
However, small businesses and startups see more benefit in ONDC. It offers immediate tools for growth.
“The government has built the rails. Now we need faster onboarding and incentives,” said the founder of a logistics startup linked to ONDC.
A Platform-First Approach
India seems to be entering an era where platforms replace traditional policies. Unlike written rules, ONDC is flexible and can be adjusted in real time. It lets the government respond quickly to new challenges.
“Instead of a long policy document, ONDC offers a dynamic solution,” said a New Delhi-based policy expert.
ONDC’s Challenges
ONDC is promising but still faces hurdles. Many small shopkeepers are yet to join the network. Digital literacy and infrastructure remain weak in smaller towns.
Issues like payments, delivery systems, and trust also need attention. Without a national policy, some states may still enforce inconsistent rules.
What’s Next?
The government might revisit the idea of a retail policy later. But that future policy may support ONDC instead of running parallel to it. Any new framework will likely address legal gaps and boost the network’s adoption.
Right now, ONDC stands as India’s primary tool for retail reform.
Long-Term Strategy
India is moving toward open networks and digital public infrastructure. After UPI and Aadhaar, ONDC is the next big step.
If successful, it could become the retail sector’s version of UPI, giving equal access to every seller.
Conclusion
The National Retail Policy may be on pause, but India’s retail sector is not. ONDC offers a digital-first solution that’s already transforming how retail works.
Rather than enforcing a one-size-fits-all policy, the government is enabling a flexible, tech-driven future. This shift could define how India manages digital commerce in the years to come.
