ONDC plans subsidy revival for food delivery; Rs 100–150 crore incentive pool proposed – check details
The Open Network for Digital Commerce (ONDC) is considering reviving its subsidy program with a proposed incentive pool of Rs 100–150 crore for food delivery partners operating on its platform. If implemented, the move would mark a significant policy reversal for the government-backed e-commerce platform, which had previously scaled back such incentives.The new subsidy plan, still in the works and is expected to support platforms like Magicpin, Paytm, Ola Consumer, and Waayu. “The modalities of the scheme are being worked out and the final amount could change. ONDC officials and representatives from restaurants and food delivery firms have been in conversations for the last month on the issue,” ET reported quoting sources.The source further added that this could potentially translate into 80–100 million food orders routed through ONDC.India’s food delivery space is currently dominated by Eternal-owned Zomato and Swiggy, based in Bengaluru. Restaurants, burdened by substantial commission fees, are actively seeking alternative platforms. The National Restaurant Association of India (NRAI) urged its members to join ONDC in January, following the launch of 10-minute delivery services by both major platforms Despite ONDC’s entry into food delivery in 2021 aiming to challenge the market leaders, the impact has been limited. According to brokerage firm BNP Paribas, “High commission fee of 18-25% per order (by Zomato and Swiggy) is driving restaurants to alternatives like ONDC, which charges 10-11% commissions and offers direct customer data access.”However, the firm noted that ONDC has “not seen any meaningful success” to disrupt the market, despite interest from restaurants.The food delivery market, a crucial revenue source for Zomato and Swiggy, is projected to grow from $8 billion in 2023 to $17-21 billion by 2028. Restaurants are exploring additional options, including Rapido’s upcoming low-commission service, Ownly. Growth rates for both major platforms fell below 20% during October-December 2024 and January-March 2025, with analysts estimating further decline to 15-16% in the April-June quarter.ONDC is overseen by a board comprising founding members, government nominees, shareholders, and independent directors. The recent leadership reshuffle comes amid a slump in order volumes.According to data, ONDC’s retail orders, which include e-commerce, groceries, and food delivery — have fallen from a peak of 6.5 million in October 2023 to just 4.1 million in May 2025.ET had earlier reported that the discontinuation of subsidies played a key role in this decline. Since launching pilot operations in 2022, ONDC spent around Rs 95 crore on marketing and incentives in FY23 and FY24. At its peak, it was offering up to Rs 3 crore in monthly subsidies to each network partner, a figure that was later reduced to Rs 30 lakh.
