According to a report released by the National Restaurant Association of India (NRAI), the Indian food services industry is expected to grow at a CAGR of 8.1 percent by 2028 from the current ₹5.69-lakh crore to ₹7.76-lakh crore. It will be crores. .

The industry body noted that this would make India the third-largest foodservice market globally, overtaking Japan, and also the second-fastest growing.

In fact, the organized segment is expected to grow at a faster rate of 13.2 percent and will overtake the unorganized segment to touch ₹ 4.10-lakh crore in the next 3-4 years, rising to 52.9 percent from the current 43.8 percent.

Kabir Suri, President, NRAI and Co-Founder and Director, Azure Hospitality, said, “Despite the setbacks witnessed during the COVID-19 pandemic when the food service sector was hit hard, it has shown amazing resilience and is now growing rapidly. Experiencing growth. The growth is due to rising incomes, growing demand from Tier-2 and Tier-3 markets, rapid urbanization and a young population, among other factors.

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The industry now directly employs 85.5 lakh people, which is expected to grow by 20 percent by 2028 and contribute Rs 33,809 crore to the Indian exchequer, he added.

Urbanization

In fact, rising incomes and urbanization are leading to a significant increase in food consumption among Indian consumers. According to NRAI estimates, the average frequency of eating out increased from about 6.6 times in 2018-19 to about 8 times per month in FY24. It added that out of 8 times a month, customers order an average of 4.2 times a month and eat out 3.7 times.

Nitin Saluja, Founder, Chaayos and Chairman, Report Steering Committee, NRAI said, “Contrary to some beliefs, dining out is not declining simply because consumer adoption of food delivery services has increased. Delivery is largely replacing the use cases that used to suffice with home cooking.With rapid urbanization and busy lifestyles, the number of consumers cooking at home is decreasing shows that consumers like to choose food for family gatherings, social occasions, celebrating national holidays or trying new foods among others.

Asked about the outlook for FY25, Saloja said the industry is expected to continue to grow at a CAGR of 8 percent with top cities expected to account for a major share of growth.

The organized segment is dominated by casual dining restaurants, which have been the fastest growing format with a 48 percent share, followed by quick service restaurants. Cloud kitchen (35 percent), cafe (18.6 percent) and QSR (17.5 percent) are expected to be the fastest growing formats during the period 2024-28.

NRAI has urged the government to give industry status to the food services sector, ease and standard licensing system across the country and allow longer working hours. The industry body has also urged the government to come up with two options for the GST slab, which is 12 percent with input tax credit and 5 percent without input tax credit.

It has also said that there is a need for a fair and equitable e-commerce policy that includes reasonable limits on commissions charged to restaurants.

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