The idea of building an interoperable architecture for e-commerce was so convincing that DPIIT secretary Anurag Jain sanctioned Rs 10 crore within three minutes of being briefed, the top bureaucrat told Moneycontrol on the sidelines of the World Economic Forum in Davos.
“When I joined as the DPIIT secretary, the team came to brief me about ONDC (Open Network for Digital Commerce). Frankly speaking, it did not take me more than 3 minutes to understand and appreciate it. They wanted Rs 10 crore to be sanctioned which I did within 3 minutes,” he said.
“Then I told them that the way to make people understand ONDC is — what UPI did to payments, ONDC will do to e-commerce… unbundling and making it interoperable,” he added.
The Department for Promotion of Industry and Internal Trade (DPIIT) secretary said that ONDC will ensure that 'the oligopolies of the world wither away' and that the entry barriers to e-commerce in India are removed.
Also read: Understanding ONDC, the open network billed to be the UPI of e-commerce
ONDC, which was founded as a non-profit in late 2021, is building a digital network for the e-commerce industry that allows any online seller to connect with any buyer in India.
It aims to raise e-commerce penetration in the next two years to 25 percent of India's consumer purchases, from nearly 8 percent now, in a country of 1.35 billion people. It also hopes to sign up 900 million buyers and 1.2 million sellers on the shared network within the next five years, while achieving gross merchandise value of $48 billion.
Jain also spoke about the government's production-linked incentive (PLI) schemes, which aim to kickstart manufacturing in critical sectors.
For example, the PLI scheme for mobile phones has helped India’s exports of these devices to $3.16 billion in FY21 from near zero in 2014. Mobile and electronics majors such as Apple and Samsung continue to invest in India. However, similar success is yet to be seen in sectors such as textiles, pharmaceuticals, specialty steel, and solar PV modules.
“It will take some time before you start seeing the results on the ground for the other PLI schemes. It is a cycle where the investment happens, then production starts and subsequently the incentives are drawn,” said Jain.
“The design of most of the 14 PLI schemes is similar. What happened is that mobile and two pharmaceutical PLIs were started in 2020. And mobile was the first one to take off which is why the results have started coming,” he added.
In addition, he emphasised that the government will disburse Rs 4,000 crore in incentives across seven PLI schemes by March of this year.
The roadmap for ensuring India's growth over the next three to four decades has been set, according to Jain, with tailwinds such as infrastructure-focused government capex, the transition to green energy, and the demographic dividend of the country.
“A trained, good engineer will demand a starting salary of $200,000 in the US. The same talent you can get in India for $40,000. That's 1/5 of the cost. And therefore, almost 90 percent of the Fortune 100 companies have got their R&D centres in India,” he said.
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