Protocol Over Platform: How ONDC Is Unbundling India's Digital Economy

While AI centralized intelligence in 2025, India's Open Network for Digital Commerce represented a counter-narrative. ONDC isn't a platform like Amazon or Uber but a protocol—open specifications allowing any buyer app to connect with any seller app. By 2025, it processed 18.2 million daily transactions, validating the protocol economy thesis against platform monopolies. The growth trajectory tells the story. From under 1,000 daily transactions at launch in 2022, ONDC scaled to 5 million by 2024 and reached 18.2 million by October 2025. Active merchants grew from thousands to over 764,000, spanning 616+ cities. This expansion demonstrates that protocol-based economics can achieve mass adoption when designed correctly. ONDC unbundles the e-commerce value chain. Traditional platforms handle cataloging, payments, and logistics in one closed system. ONDC separates these functions: buyer apps like Paytm and PhonePe handle consumer acquisition, seller apps manage merchant inventory, and logistics providers handle delivery. This hyper-specialization allows a small kirana store to reach customers without building an app—they simply plug into a seller aggregator. Mobility emerged as the killer use case, accounting for 56% of total transactions by late 2025. The Kochi Open Mobility Network allowed local taxi drivers to bypass high commissions from Uber and Ola. Protocol-based economics prove most effective in high-frequency, commoditized services where the platform tax is most visible. When drivers can keep more revenue and riders pay less, both sides benefit from removing the middleman. The forecast suggests ONDC could facilitate $200-$300 billion in gross merchandise value by 2030, fundamentally altering India's internet economics. The shift moves markets from winner-take-all to winner-shares-protocol. Small merchants gain access to digital infrastructure without surrendering margins to platform monopolies. The next generation of Indian entrepreneurs will emerge from this e-marketplace ecosystem. The broader implication extends beyond commerce. ONDC demonstrates that digital public infrastructure can challenge private platform power through open standards. The protocol approach distributes value capture across participants rather than concentrating it in a single company. As India's digital public infrastructure matures alongside robust FDI inflows exceeding $80 billion annually, the ONDC model provides a blueprint for reimagining how digital economies can function without surrendering sovereignty to foreign platform giants.