ONDC will propel Indian e-commerce from 80 million monthly users to 500 million: Nandan Nilekani

Nandan Nilekani

Infosys Chairman Nandan Nilekani said on June 22 that e-commerce companies will need Open Network for Digital Commerce (ONDC) for online purchases to grow from the current 80 million monthly transacting users (MTUs) to 500 million.

"ONDC will create a new class of e-commerce users. Suddenly, people who didn't think of e-commerce earlier will start thinking of it for convenience and order from their neighbourhood stores via ONDC," he said.

"The number of platforms which are in e-commerce will go up. It won't be just two guys, but 10 guys. It might not benefit one guy, but it will benefit India," he added.

Nilekani, who has been instrumental in creating India's digital public infrastructure from Aadhaar and UPI to Fastag and ONDC, was speaking at an event organised by management consulting firm Redseer.

The Infosys veteran highlighted the rapid growth of digital public infrastructure in India, and how it has increased bank account penetration from around 20 percent to over 80 percent in less than a decade.

He pointed out that a confluence of four important events in 2016 has led to the rapid digital adoption in India: Aadhaar hit the 1 billion user mark on April 4, the unified payments interface was launched on April 11, the launch of Jio in September that year which quickly brought down the cost of data and demonetisation in November.

“Aadhaar also laid the foundation of Covid vaccination. You could take one dose in one location and second in another... India is doing irreversible non-linear changes and each change is acting as input for next. This combinatorial innovation at population scale is why it is called digital public infrastructure,” he said.

“Digitisation is leading to formalisation and therefore the rate of tax growth is greater than rate of GDP growth because of compliance growing,” he added.

Nilekani argued that while the internet has grown in the US on the back of the high advertising revenue of $862 per capita shifting online, India can’t take this approach as the number for the country is as low as $7 per capita.

“We needed a different kind of internet infra than West... Essentially, Indian internet is not advertising led, but transaction led... Your transaction history is itself a form of capital that will be unlocked at scale,” he said.