ONDC: A Game-Changer for J&K’s Micro & Nano Enterprises

In a digital economy increasingly dominated by a few large platforms, the Open Network for Digital Commerce (ONDC) emerges as a bold, democratizing initiative—potentially a watershed moment for the thousands of micro and nano-businesses in Jammu & Kashmir. These small-scale enterprises—pashmina weavers, dry fruit processors, walnut growers and rural outlets—have traditionally thrived on strong local reputations and trust. Yet, when it comes to scaling beyond local markets, they have often been held back by exploitative, high-commission e-commerce platforms such as Amazon and Flipkart.

The lifeblood of micro and nano enterprises lies in reliable market linkages. Until now, J&K’s cottage industries have depended on informal middlemen or physically taxing market circuits. Even when their products reached distant buyers, margins were thin and logistics were daunting. The fundamental challenge has not been product quality or demand, but access to affordable and fair digital commerce.

ONDC presents a refreshing alternative. Conceived by the Department for Promotion of Industry and Internal Trade (DPIIT), ONDC functions much like UPI for commerce—an open, protocol-based infrastructure that enables interoperability across seller and buyer apps, payment gateways and logistics providers. Sellers pay minimal transaction fees—typically around 5–10% or as little as ₹1.50 per transaction above ₹250—compared to the 25–40% commissions charged by dominant e-commerce platforms. This dramatically improves margins and sustainability for small businesses.

Data underscores ONDC’s momentum: over 200 million transactions processed, 700,000 merchants onboarded, and consistent growth in Tier-2 and Tier-3 cities—including Jammu, Kashmir, Leh, and Kargil. Importantly, ONDC dismantles the closed-loop model of legacy platforms. Sellers maintain control over pricing, logistics and product visibility, while buyers discover products through diverse, neutral buyer apps. This unbundled, transparent architecture restores market balance, allowing local sellers to compete without being buried under opaque algorithms or private label bias.

This initiative is part of a broader digital public infrastructure built by the government—including UPI for payments, JAM for financial inclusion, AgriStack for farmer data, and e-KUN for agricultural investment. ONDC adds a vital commercial layer to this ecosystem. It is not a one-off fix; it is a structural platform designed for scale, equity and resilience.

For entrepreneurs in J&K, the value proposition is clear. Most operate in rural or semi-urban belts, relying heavily on seasonal tourism and informal trade. They face high packaging and logistics costs, limited online visibility and low digital literacy. ONDC offers these businesses a viable pathway to national markets, stronger margins and digital independence—helping them break systemic barriers that have long hindered their growth.

ONDC’s relevance is further amplified when viewed alongside initiatives like Mission YUVA, the Government of J&K’s flagship program to foster self-employment and enterprise creation. With a target of establishing over 1.3 lakh new businesses across sectors, Mission YUVA aims to empower a new generation of nano and micro-entrepreneurs. Integrating these budding ventures with ONDC from the outset can ensure they are not just credit-linked but market-ready—providing them immediate access to digital commerce and enabling scale, visibility, and sustainability right from inception.

To unlock this potential, the Government of J&K should consider developing a dedicated, state-specific seller platform integrated with ONDC. This single-window interface would simplify onboarding for first-time nano sellers—especially in remote and tribal regions—and offer features such as product photography assistance, catalog templates, vernacular training modules, and branding support tailored to heritage products. By reducing dependence on commercial aggregators and aligning with ONDC protocols, such a platform would empower local entrepreneurs with control over pricing, inventory, and storytelling—critical for building consumer trust and long-term brand identity.

The advantages are tangible. ONDC’s decentralized, transparent structure benefits sellers in ways traditional platforms have failed to deliver. A comparative look reveals the stark contrast:

For entrepreneurs in J&K, these distinctions mean better earnings, lower onboarding risks and true visibility in the marketplace.

National trends further validate the model. With over 60% of ONDC orders coming from Tier-2 and Tier-3 cities, the platform is already gaining traction in regions similar to J&K. States like Kerala and Madhya Pradesh have successfully onboarded handloom and tribal collectives, witnessing revenue growth of 30–40% in under a year. If replicated in J&K, ONDC could breathe new life into its heritage sectors—reviving traditional crafts, expanding agro-processing markets, and boosting rural employment through digital inclusion.

Yet, adoption will depend on addressing real challenges. Digital literacy gaps remain across remote belts. Internet connectivity is uneven in hilly and border regions. Standardized packaging and branding support is often lacking, making online products less appealing to urban buyers. Even with ONDC’s simplified onboarding, first-time sellers require handholding. Logistics and payment gateway coverage also need to be strengthened to ensure reliable fulfilment and trust in the system.

These gaps can be bridged through concerted support—from government, J&K Bank, Trade Promotion organizations and community bodies—to build awareness, train digitally, integrate logistics and credit, and achieve scale. Institutions like the Indian Institute of Technology Jammu can be entrusted with developing a dedicated, state-specific seller platform integrated with ONDC. By building an enabling environment around ONDC, the government can ensure that digital commerce becomes truly inclusive and sustainable.

In an era where platform giants often overshadow the producers they rely on, ONDC is a timely correction. It restores agency to sellers, transparency to buyers and fairness to the marketplace. For Jammu & Kashmir, it offers more than just a route to digital trade—it offers a chance to redefine its economic narrative. If UPI changed how India pays, ONDC may well redefine how India sells—and for J&K, it could finally bring the market to the doorstep, on equitable terms with full dignity and respect.

 (The authors are DGM at J&K Bank and AGM at NABARD respectively. Views expressed are personal and not representative of respective organizations)

By: Rakesh Magotra