Open networks can create economic impact of Rs 67K cr annually in India’s mobility sector: ONDC

New Delhi (The Uttam Hindu): Open Networks can generate an annual economic impact of up to Rs 67,000 crore in India’s mobility sector, driving inclusive growth and strengthening local economies, according to a whitepaper, released by the government-run Open Network for Digital Commerce (ONDC) on Monday.

The whitepaper explores how innovative business models on open networks can transform India’s mobility sector. It offers insights into how open networks and new business models can redefine India’s urban mobility landscape while driving economic growth, boosting driver incomes, and fostering inclusive development.

It also highlights the challenges with traditional aggregator-driven models, where platform commissions impact driver incomes and reduce their capacity to contribute to local economies.

The open network model such as Zero Commission in the Mobility sector approach offers a compelling alternative, empowering drivers to retain 100 per cent of their earnings.

This model could increase driver incomes by Rs 1.36 lakh annually -- approximately 30 per cent higher than current levels. This could also add up to Rs 20,475 crores annually for 15 lakh drivers across India.

“The ripple effects of this additional income are substantial. Drivers’ households are expected to spend more on better housing, education, healthcare, and nutritious food,” ONDC said.

“This increased spending could stimulate local businesses and generate between Rs 51,000 crores to Rs 67,000 crores annually in additional economic activity, driving inclusive growth and strengthening local economies,” it added.

The paper also underscores the importance of evolving policy frameworks with new models emerging with open networks.

This includes “issuing clarifications for GST that can potentially enhance net tax revenues for the government, with estimates ranging from Rs 54.5 crore to Rs 1,152 crore annually, while promoting broad-based economic growth, fairness, and inclusivity across the ecosystem”, ONDC said.

The whitepaper also shared how digitisation can play a crucial role in this transition, offering transparency, accountability, and additional benefits for both drivers and passengers. It underscores how open networks can help reduce compliance burdens, encourage digital adoption, and ensure a fair and inclusive approach that benefits all stakeholders. ONDC is a network of more than 200 apps, including buyer apps and seller apps.