Growth Expected in Indian Food Services Sector According to NRAI Report

Growth Expected in Indian Food Services Sector According to NRAI Report

The Indian food services sector is anticipated to experience significant growth in the coming years, with a Compound Annual Growth Rate (CAGR) of 8.1% between 2024 and 2028. This growth is attributed to factors such as rapid urbanization, strong GDP growth, a rising younger population, and increased consumer awareness and exposure, as highlighted in The India Food Services Report-2024 by the National Restaurants Association of India (NRAI). The report reveals that the sector currently contributes 1.9% to India's GDP, and it is projected to reach Rs 7.76 trillion by 2028 from its current value of Rs 5.69 trillion.

Despite facing challenges during the Covid-19 pandemic, the food services industry in India has demonstrated resilience and continues to play a significant role in the country's economy. Kabir Suri, president of NRAI and co-founder and director of Azure Hospitality, emphasized the industry's socio-economic impact and the need for the government to take steps to unlock its full potential. In 2020, the industry was valued at Rs 4.23 trillion but decreased to Rs 2 trillion in 2021, showcasing the impact of the pandemic on the sector.

The report also highlights the changing dynamics within the industry, pointing out the shift towards online food delivery platforms and the increasing frequency of eating out among the urban population. The organized segment is expected to grow at a CAGR of 13.2%, aiming for a market share of 52.9% by 2028, while the unorganized sector's share is predicted to decrease to 47.1% by the same year. Casual dining restaurants are leading the growth in the organized sector, followed by quick-service restaurants, with projections indicating a shift in market share between these segments by 2028. Additionally, the sector is a significant employer, with 8.5 million employees presently, expected to grow to 10.3 million by 2028, showcasing its role in job creation.