The Indian food services sector is predicted to develop at a CAGR (compound annual growth rate) of 8.1% between 2024 and 2028, owing to fast urbanisation, substantial GDP growth, a growing younger population, and increased consumer awareness.
According to the India Food Services Report-2024, published by the National Restaurants Association of India (NRAI), the sector contributes 1.9% of India’s GDP. It is expected to rise to Rs 7.76 trillion by 2028 from Rs 5.69 trillion today.
Despite challenges during the COVID-19 outbreak, India’s food services business is rapidly expanding and contributing Rs 33,809 crore to the Indian economy. The post-Covid rebound demonstrates the industry’s resilience, emphasizing the necessity for the government to realize its socioeconomic significance and take prompt action to realise the sector’s full potential.
The sector, which was valued at Rs 4.23 trillion in 2020, has decreased to Rs 2 trillion by 2021. While the organised segment is predicted to increase at a CAGR of 13.2% to reach a market share of 52.9% by 2028, the unorganised segment’s share is expected to fall to 47.1% by 2028, down from 56.2% today.
Casual dining restaurants are the fastest-growing segment within the organised sector, accounting for 48% of the market, followed by quick-service restaurants (QSRs) at 27%. The sector, which was valued at Rs 4.23 trillion in 2020, has decreased to Rs 2 trillion by 2021.
While the organised segment is predicted to increase at a CAGR of 13.2% to reach a market share of 52.9% by 2028, the unorganised segment’s share is expected to fall to 47.1% by 2028, down from 56.2% today.
The average monthly eating out frequency has increased by 20%, reaching 7.9 times in 2023-24 from 6.6 in 2018-19.
Among important suggestions and recommendations to the government, the sector seeks a dedicated food services ministry as well as industry status, which will provide additional support to the booming sector and stimulate entrepreneurship.
The sector has also advocated for a dual GST scheme that would allow for input tax credit and longer operation hours across the country rather than being limited to specific regions.