India’s food delivery platform sector has emerged as a high-velocity engine for the national economy, nearly doubling its economic footprint within just two years. According to a joint study by the National Council of Applied Economic Research (NCAER) and Prosus, the sector’s growth in output and value addition is currently outpacing the broader Gross Domestic Product (GDP) growth of the country, signaling a structural shift in the food services ecosystem.
The report, titled ‘Impact of Food Delivery Platform on the Indian Economy: GDP, Employment and Taxes’, reveals that the sector’s Gross Value of Output (GVO) surged to approximately ₹1.2 lakh crore in FY24, up from ₹0.61 lakh crore in FY22. This trajectory represents a Compound Annual Growth Rate (CAGR) of 17.1%, nearly twice the pace of India’s overall economic output growth during the same period.
Key Economic Indicators
The study highlights that the sector’s contribution to the national economy is becoming increasingly significant:
- Gross Value Added (GVA): The GVA from food delivery platforms doubled from ₹0.24 lakh crore in FY22 to ₹0.48 lakh crore in FY24.
- Share of Output: As a share of national output, the sector rose from 0.14% to 0.21% in two years. Within the services sector specifically, it now commands a 0.5% share, putting it on par with established industries like land transport and hotels.
- Tax Contributions: For every ₹1 million of production, the sector generates approximately ₹40,000 in indirect taxes. When accounting for backward and forward linkages, the total fiscal impact is nearly double the direct tax contribution.
The Employment Multiplier Effect
One of the most striking findings of the NCAER-Prosus report is the sector’s role as a job creator. Direct employment in the sector grew from 1.08 million workers in FY22 to 1.37 million in FY24, reflecting a CAGR of 12.3%—significantly higher than the national employment growth average of 7.9%.
More importantly, the sector exhibits one of the highest employment multipliers in the services industry. The study estimates that every direct job created on a food delivery platform supports an additional 2.7 jobs across the wider economy, particularly in the supply chain, logistics, and agricultural sectors.
Transforming the Restaurant Ecosystem
The report also analyzed the impact on the restaurant industry, noting a clear trend toward formalization and digital visibility.
- Revenue Shift: The share of restaurant revenue derived from delivery platforms increased from 22% in 2019 to 29% in 2023.
- Market Reach: Approximately 59% of restaurant owners reported an expanded reach to new customers, while over 50% witnessed a net increase in their total customer base.
- Innovation: More than 52% of surveyed restaurants added new menu items specifically tailored for platform demand, indicating a shift in operational strategies to cater to the “delivery-first” consumer.
Expert Insights
Commenting on the findings, Dr. Bornali Bhandari, Professor at NCAER, stated, “The sector’s contribution to output, employment, and indirect taxes is not only measurable but growing at a pace far exceeding that of the broader economy. The evidence points to a structural shift in how food services businesses participate in the economy.”
Sehraj Singh, Managing Director, India & VP – Group Public Policy at Prosus, added, “Platforms have become an essential bridge to demand, giving many small restaurants their first exposure to digital visibility, regulatory compliance, and data-driven decision-making.”
Capital Mirror Analysis
The data suggests that the food delivery sector is no longer just a convenience service but a vital component of India’s digital infrastructure. As the sector scales, the report indicates a growing need for “balanced regulatory approaches” and the integration of platform-sector metrics into national statistical systems to better track this rapidly expanding segment of the service economy.
