India will launch an open network for digital commerce (ONDC) as the government tries to end the dominance of U.S. companies Amazon.com and Walmart in the e-commerce market, Reuters news report said.
The launch of the platform on Friday comes after India’s antitrust body raided domestic sellers of Amazon and some of Walmart’s Flipkart following accusations of competition law violations. The companies did not respond to request for comment on the raids.
Indian retailers, key supporters of Prime Minister Narendra Modi, have contended that Amazon and Flipkart’s platforms benefit a few big sellers, via predatory pricing, though the companies say they comply with all Indian laws.
The government’s ONDC platform will allow buyers and sellers to connect and transact with each other online, no matter what other application they use. It will be soft-launched on Friday before being expanded, the trade ministry told Reuters.
The government document said that two large multinational players controlled more than half of the country’s e-commerce trade, limiting access to the market, giving preferential treatment to some sellers and squeezing supplier margins. It did not name the companies.
India’s ONDC plan aimed to onboard 30 million sellers and 10 million merchants online. The plan is to cover at least 100 cities and towns by August.
It would focus on apps in local languages for both buyers and sellers, with a special emphasis on small merchants and rural consumers.
The government said it already received support from retailers and venture capital firms. Lenders such as the State Bank of India (SBI), ICICI Bank and Bank of Baroda have committed total investments of 2.55 billion rupees ($33.26 million) into ONDC.
A Reuters investigation last year, based on Amazon internal documents, showed the company had given preferential treatment for years to a small group of sellers on its platform and used them to bypass Indian laws. Amazon denies any wrongdoing.