What Is the ONDC Network, and How Does It Actually Work? (Plain-English Guide)

If you have tried to understand ONDC and come away more confused than before, it is not your fault. Most explanations either drown you in jargon — “decentralised interoperable protocol” — or they quietly describe it as “India’s answer to Amazon,” which is wrong in a way that matters.

So let me explain it the way I would to a shopkeeper across a counter, because that is who I built for. I run Kaarobari, a Seller App in the ONDC Network, out of Dhule in Maharashtra. We are plugged into this network live. I am not going to describe ONDC from a slide deck — I am going to describe how an actual order travels through it, because once you see the flow, the whole thing suddenly makes sense.

What does ONDC stand for, and what does “open network” mean?

Quick answer: ONDC stands for Open Network for Digital Commerce. “Open network” means no single company owns the customer or the marketplace — many buyer apps and many seller apps all connect through common rules, so a buyer on one app can purchase from a seller listed on a completely different app.

Break the name apart and it explains itself.

• Open — anyone who follows the rules can join, on either side. It is not one company’s private platform.
• Network — it is a connection between many players, not a destination. Like the mobile network: you are on one company’s SIM, your friend is on another, and you can still call each other. You do not both have to be on the same operator.
• Digital Commerce — buying and selling online: products, and increasingly services.

Here is the mobile-network comparison drawn out, because it is the single best way to understand ONDC:

📊 The mobile-network analogy

On a normal shopping app, the buyer and the seller must both be inside that one app’s walls. On the ONDC Network, they do not. The buyer can be in one app, the seller listed through another, and the network carries the deal between them. That one difference is where everything else comes from — including the lower cost, which we will get to.

Is ONDC a company or a network? (this trips everyone up)

Quick answer: Both words point at different things. The network is open and owned by no one. “ONDC” the body is a not-for-profit company (a Section 8 company under Indian law) that builds and looks after the rules — but it does not sell anything, does not hold your product, and never sits between you and your money.

This is the confusion I hear most, so let me settle it cleanly.

There is an organisation called ONDC — a not-for-profit company, incorporated in India, backed by public and private institutions and initiated under the government’s commerce department. Its job is to write and steward the protocol, keep the network fair, and onboard participants. That is it.

Crucially, ONDC the organisation is not a marketplace. You do not “sell on ONDC” the way you sell on a shopping platform. There is no ondc.com storefront where customers browse. ONDC does not take your catalogue, does not touch your inventory, and does not settle your payments. It sets the rules of the road; the cars on the road are the buyer apps and seller apps.

How does an order actually flow? (the part nobody explains)

Quick answer: A buyer searches in their app; that search is sent to the ONDC gateway, which broadcasts it across the network; seller apps reply with matching products; the buyer picks one; and the order, payment and delivery then happen directly between the buyer’s app and the chosen seller’s app. One search reaches many shops at once.

This is the mechanism, and it is our first-party advantage over every generic explainer — because we run this flow live, order after order. Follow one journey, step by step.

📊 One order’s journey across the network

In plain words:

1. The buyer searches — say, “atta 5kg” — inside whatever shopping app they already use.
2. The search goes to the gateway. The buyer app does not know every seller in India. So it hands the search to the ONDC gateway, a neutral post office for the network.
3. The gateway broadcasts it to seller apps across the network. Yours (through Kaarobari) is one of them.
4. Seller apps reply with matching products and prices. The buyer app gathers all those replies into one list.
5. The buyer picks one product — maybe yours, maybe another shop’s — based on price, distance, rating.
6. From there it is direct. Selecting, paying, confirming and delivering happen point-to-point between the buyer’s app and your seller app. The gateway’s job was only the introduction.

The magic is in step 3. One buyer search reaches many independent shops at once, without you buying an ad, and without the buyer having to be inside your app. Your papad or your atta can surface to a customer who has never heard of your shop and is using an app you have never installed. That is what “open network” actually buys you.

How is the ONDC Network different from Amazon or Flipkart?

Quick answer: A marketplace like Amazon or Flipkart is a walled garden — buyers and sellers both live inside one company’s app, and that company controls discovery, pricing visibility and fees. The ONDC Network is open — buyers and sellers can be on different apps, no single company owns the customer, and seller apps compete to serve you. You are listed on a network, not locked inside one platform.

Same goal — connect a buyer to a seller — but the shape is fundamentally different, and the shape decides who holds the power.

📊 Walled marketplace vs open network

The practical differences a seller actually feels:

I want to be fair here, not a cheerleader: the big marketplaces are excellent at what they do, and for some sellers they are the right choice. The point is not that one is evil. The point is structure. In a walled garden, the gatekeeper sets the rules because it owns the only door. On an open network, the doors are many, and that competition is what keeps the seller’s cost down.

Why can the ONDC Network be cheaper for a seller? (the fee math)

Quick answer: Because the network is unbundled and open, the fees are unbundled and competed-down. A seller app’s fee on the ONDC Network is typically a low single-digit percentage — ours is 2% + 18% GST, so a ₹1,000 order costs ₹20 (plus GST on that ₹20). A walled marketplace instead stacks a category commission with collection, closing and shipping fees, which commonly add up to a far larger share of the sale.

This is the section worth screenshotting, because it is the honest arithmetic that most “what is ONDC” pages skip.

Start with the number I can prove, because it is ours:

📊 Our seller-app fee on a ₹1,000 order

Now the comparison — done the honest way, at the level of category, not a named fee table.

• On the ONDC Network, the fees are split across the players and each is small. The seller app charges its fee (ours is 2%), and the buyer app charges a “finder fee” for bringing the customer (commonly a low single-digit percentage, capped by the network by category). Both are in the low-single-digits range. Nobody is bundling five charges into one gatekeeper cut.
• On a walled marketplace, the seller typically pays a category commission plus a fixed closing/handling fee plus a payment-collection fee plus shipping/weight fees. Individually each looks small; stacked together, the all-in deduction commonly runs into the tens of percent, and how high depends heavily on the category and the item’s price. (Published marketplace fee schedules vary widely — treat any single headline percentage with caution; the honest statement is “several stacked fees, often adding up to a large share.”)

📊 What reaches the seller (illustrative, category-dependent)

The reason for the gap is not charity — it is the mechanism. In an open network:

1. Nobody owns the customer, so no one can charge a gatekeeper premium for access to buyers.
2. Services are unbundled, so each part (finding the buyer, listing the seller, delivering) competes on its own price instead of being sold as one take-it-or-leave-it bundle.
3. Seller apps compete for sellers. If we charge too much, a shop moves to another seller app and takes its catalogue along — so the fee stays honest.

If you want the numbers pulled apart fully — the seller-app fee versus buyer-app finder fees, category by category — that is exactly what our seller-app fees comparison does, and the full deduction chain (fee, GST, TCS, TDS, the real amount that lands in your bank) is in our pricing breakdown in Hindi.

What does the ONDC Network mean for a small seller?

Quick answer: Three concrete things — a low fee (ours: 2%, only on delivered orders), visibility across many buyer apps at once without buying ads, and a genuine on-ramp for the smallest shops, including a route to start selling within your own state even without a GST number.

This is where “open network” stops being a theory and becomes your monthly income. For a kirana shop, an SHG papad group, or a first-time online seller, the network changes three things:

• You pay for outcomes, not for the privilege of existing. No monthly rent, no listing charge, no ad budget you must burn to be seen. Our fee is 2% only on delivered orders — and ₹0 on anything refunded. If you sell nothing, you owe nothing.
• One listing, many shopfronts. List once with your seller app, and your products can surface across many different buyer apps — the whole network’s demand, not one app’s audience. You are not begging one algorithm for attention.
• A real door for the smallest sellers. You do not need to be a big brand. A shop selling within its own state can begin even without a GST registration, using the enrolment route the network supports — so the shopkeeper who was told “you can’t sell online without GST” actually can. (The full path, documents and the one real catch are in how to sell on the ONDC Network, and in Hindi at ONDC par kaise beche.)

How do you start selling on the ONDC Network?

Quick answer: You sign up with a Seller App in the ONDC Network (like Kaarobari), add your shop and products, complete a one-time KYC, and go live — after which buyer apps across the network can discover your listings. You never deal with “ONDC” directly; the seller app connects you.

You do not integrate anything, and you do not need a developer. In practice it is: choose a seller app, create your shop, list your products, finish KYC once, set your delivery, and your catalogue joins the network. From then on, orders arrive from whichever buyer apps a customer happened to use.

I will not repeat the whole checklist here, because we have a dedicated step-by-step for it — the documents, the costs, the timeline — in how to sell on the ONDC Network. This page was about what the network is; that one is about how you join it.

Frequently asked

“Is ONDC an app I download to shop?”

No — and this is the most common misunderstanding. ONDC is not an app and not a website you shop on. It is the open network behind the apps. You shop through a buyer app and, as a seller, you list through a seller app like Kaarobari. “ONDC” is the shared set of rules that lets those two different apps trade with each other. There is nothing called “the ONDC app” to install.

“What is the full form of ONDC?”

Open Network for Digital Commerce. “Open” because anyone following the rules can join; “network” because it connects many independent apps rather than being one company’s platform; “digital commerce” because it is about buying and selling online. It was created to keep online commerce from being controlled by a small number of large platforms.

“Is ONDC owned by the government?”

Not owned as a government department. ONDC is a not-for-profit company (a Section 8 company under Indian law), initiated under the government’s commerce ministry and backed by a mix of public and private institutions. It stewards the network in the public interest, but it is not a government store and it does not sell anything itself.

“Why would a seller use ONDC instead of a big marketplace?”

Lower, unbundled fees and no single gatekeeper. On the ONDC Network our seller-app fee is 2% (only on delivered orders) instead of a stacked commission-plus-fees structure, and your listing can surface across many buyer apps at once rather than being locked inside one platform’s walls. You also keep your catalogue and can leave any time — there is no lock-in. It is not that marketplaces are bad; it is that an open network changes who holds the power.

“Is my money safe if the buyer and seller are on different apps?”

Yes — because the network defines a standard settlement and a standard complaint system (IGM) that every participant must follow. Money flows through a defined chain with a bank reference (UTR) at the end, and any dispute runs through the same grievance ladder regardless of which apps were involved. Different apps, one shared rulebook — that is exactly what makes it trustworthy.

Read next

Sources & official links

• ONDC — official site, ondc.org — what the network is, and the participant directory (buyer apps, seller apps, logistics)
• ONDC Network Policy — resources.ondc.org — the open, unbundled roles model and participant obligations
• ONDC Strategy Paper & FAQs — resources.ondc.org — the purpose and design of the open network
• DPIIT, Ministry of Commerce & Industry — dpiit.gov.in — the government department that initiated ONDC
• ⚠️ These are the official sources. “ONDC” itself never asks a seller for a fee, a deposit or a payment to “register on ONDC” — you join through a seller app. Anyone charging you to “get ONDC verified” or “list you on ONDC” is misusing the name.
• Kaarobari’s own live participation in the ONDC Network as a Seller App (search/gateway discovery, order and settlement flows), August 2026.

Written by Tejas, founder of Kaarobari (NEXSOL INFOTECH PVT LTD, CIN U62099MR2026PTC474666, Dhule, Maharashtra) — a Seller App in the ONDC Network. We explain the network the way we run it, and we correct the page, not just the date, when something changes.