ONDC to Hit 30-40 Million Monthly Transactions by March 2025, Says CEO

The government-backed Open Network for Digital Commerce (ONDC) aims to achieve 30-40 million monthly transactions by March next year, according to its MD & CEO T Koshy. The platform recorded 10 million transactions in June, a notable increase from over 7 million in March. "In March, it was 7 million-plus transactions. Now in June we had 10 million transactions and I think by the end of the fiscal year it should be 30 to 40 million monthly transactions," Koshy stated at a CII event.

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Merchant Onboarding and Flow-Based Lending

Currently, the ONDC platform has onboarded 5-6 lakh merchants, with expectations for this number to grow significantly in the coming months. Koshy mentioned that ONDC has initiated a pilot scheme to collaborate with banks and financial institutions. This scheme aims to enable merchants on the platform to secure loans or credit based on their transaction history rather than physical collateral. "It is called flow-based lending, not asset-based lending. Today, 80-90 per cent of loans are only against physical collateral... So, that is a shift that we are going to see. We have launched that, we already did a pilot," Koshy explained.

Earlier in the day, IT Secretary S Krishnan highlighted the vast opportunities for MSMEs in India's manufacturing sector. He emphasised that the Ministry of Electronics and IT (Meity) is exploring ways to boost the electronics components ecosystem in the country. Krishnan urged MSMEs to seize growth opportunities, adopt technology and digital tools, and evolve into larger enterprises over time. "You enter as a startup and try to exit within a reasonable time frame. So we should not have intergenerational MSMEs anymore in this country," he said.

Electronics Manufacturing and MSME Role

Krishnan also pointed out India's aspirations to become a significant electronics manufacturing hub, which is crucial for employment, resilience, and exports. He noted that component manufacturing offers MSMEs substantial opportunities for success and is essential for national needs. "There is a huge requirement for components and that component requirement is where I think MSMEs have a huge role to play and need to come into play in a significant way," he said.

India's success in mobile manufacturing was cited by Krishnan as an example of potential growth. The country now produces 33 crore mobile units annually, compared to importing 21 crore units a decade ago when domestic manufacturing was only at 5 crore units. However, he pointed out that while domestic production meets almost all local demand, value addition remains low at 18-20 per cent.

For electronics manufacturing to establish deep roots in India, Krishnan stressed the need for a significant proportion of components to be produced locally. "Our goal is that value addition should double to 35-40 per cent in the next 5 years so we are able to take forward the component manufacturing ecosystem and there the role of MSMEs will be significant," he said.

Koshy also mentioned that ONDC plans to introduce insurance as an additional component on its platform soon. This move aims to further support merchants by providing them with more comprehensive services.

The ONDC was established with the objective of democratising India's e-commerce ecosystem. By enabling easier access to loans through flow-based lending and expanding merchant services, ONDC aims to foster growth among small businesses and enhance their participation in digital commerce.

Krishnan concluded his remarks by emphasising India's competitive advantage due to lower labour costs and the employment-oriented nature of electronics assembly. However, he stressed the importance of maintaining competitiveness for continued growth in this sector.

The initiatives discussed at the CII event reflect ongoing efforts to support MSMEs and enhance India's position as a key player in global electronics manufacturing.