India’s food delivery sector outpaces economy, adds ₹12 lakh crore in output

India’s food delivery platform sector is emerging as a small but fast-scaling engine of economic activity, with its contribution to output, jobs and tax revenues growing far quicker than the broader economy, according to a new study by Prosus and the National Council of Applied Economic Research (NCAER).

The sector’s gross value of output (GVO) nearly doubled in two years, rising from ₹6.13 lakh crore in 2021–22 to ₹12.03 lakh crore in 2023–24 at current prices, the report shows.

As a share of national output, food delivery platforms accounted for 0.21% of total GVO in 2023–24, up from 0.14% two years earlier. Within services, their share stood at 0.5%, placing the sector alongside far more established industries such as hotels, restaurants and land transport.

The income contribution mirrors this rapid expansion. Gross value added (GVA) from food delivery platforms rose from ₹2.43 lakh crore in 2021–22 to ₹4.76 lakh crore in 2023–24, doubling its share of national GVA from 0.1% to 0.2%. Between 2021–22 and 2023–24, the sector’s GVO and GVA grew at compound annual growth rates of 17.1% and 16.9%, roughly twice the pace of all-India output and income growth over the same period.

“Platforms have become an essential bridge to demand, enabling restaurants to reach customers far beyond their immediate surroundings and giving many of them their first exposure to digital visibility, regulatory compliance and data-driven decision-making,” said Sehraj Singh, Managing Director, India and VP – Group Public Policy and Corporate Affairs at Prosus. He added that the sector’s more than one million workers, supported by India’s digital infrastructure, represent “one of the most dynamic labour segments in the country”.

Direct employment increased from 1.08 million workers in 2021–22 to 1.37 million in 2023–24, a CAGR of 12.3%, compared with an all-India employment growth rate of 7.9%. While the sector accounts for just 0.2% of India’s workforce, NCAER’s analysis suggests its wider labour impact is significantly larger once indirect effects are factored in.

Using an input-output model, NCAER estimates that every ₹1 million of output generated by food delivery platforms creates ₹2.05 million of output across the economy. On the income side, every ₹1 million of GVA in the sector generates ₹2.48 million of income economy-wide in 2023–24. Employment multipliers are among the highest in services: one direct job in the sector supports nearly 2.7 additional jobs elsewhere in the economy.

The fiscal impact is also material. For every ₹1 million of production, the sector generates about ₹40,000 in indirect taxes, with overall tax effects almost double the direct tax contribution once linkages with other sectors are considered.

Dr Bornali Bhandari, professor at NCAER, said the findings point to a deeper structural change. “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,” she said. “At the restaurant level, the evidence of expanded market access, higher compliance and improved operational capabilities points to a structural shift in how food services businesses participate in the economy.”