ONDC to implement network fees, reduces financial incentives cap (#1685313)

The government-backed Open Network for Digital Commerce plans to introduce a network fee on its seller apps from the beginning of 2025 and has significantly reduced the upper limit of monthly assistance that network participants can seek.

“ONDC reduced the upper cap to Rs 30 lakh for matured network participants,” an anonymous source close to the matter told ET Tech. ONDC has fixed its limit of available financial incentives per network participant at Rs 40 lakh for December, significantly down from Rs 3 crore in July this year. Moreover, for businesses which surpassed an average of one million orders in the August to October period, their December assistance has been capped at Rs 30 lakh.
 
“Our expenditure is towards network enablement, keeping track of operations, governance, to make sure the whole network runs in a disciplined fashion, and the financial incentives we give to trigger consumer trials,” ONDC’s chief executive T Koshy told the Economic Times. “By the end of next year, we would like to achieve eight to 10 times the number of current daily transactions.”
 
To date, ONDC has enabled approximately 142 million transactions and reported a total of 14.45 million transactions in the month of November this year alone. The business has seen fashion and home related products emerge as some of its big ticket items. ONDC also aims to focus on hyperlocal logistics for growth.