The Indian Government recently increased service tax on restaurant bills from the previous 5.6% to 5.8% under the Swachh Bharat cess for the Prime Minister’s pet cleanliness project. This exercise is set to make thousands of crores for the government owing to the huge growth in the ‘eating out’ industry.
$48 Billion Appetite
Although the restaurant space in India has always been big, it hasn’t had the kind of growth that is seen in Europe and North America. With consistent changes in urban lifestyle and consumer behavior however, things appear to have shifted in the industry’s favor. The current forecast expects the Indian food service industry grow to a mammoth $48 billion dwarfing almost every other Indian industry from Films to Telecom. Entry of food tech startups like Zomato and Foodpanda have also fueled this unprecedented growth to some extent.
Not just Quick and Fast food
The largest contributors to the boom in the food service space have been casual dining and QSRs (quick service restaurants) with bars, cafes and fine dining restaurants following suit. While global fast food brands haven’t been secretive about their focus on Indian markets, more international fine dining restaurants have started showing interest in entering the Indian market. The most recent one being French restaurant group Le Cirque. Fine dining, along with food pickup and delivery services such as Foodpanda, Swiggy and Getmefood is expected to drive further growth in the food service space.
Growing Foodie Population
Already a haven for food enthusiasts, India has a fast growing population pushing demand for various cuisines and styles of food. With the penetration of internet and social networks especially those with photo sharing like Instagram and Zomato, restaurants now feel the pressure to bring in innovation in terms of service, uniqueness and presentation. This is making for a great time for new creative and unique restaurants to setup shop in India.
Delivery and Pickup
The rise of the Indian startup ecosystem has seen with it, an excessive amount of startups surfacing in the Food Tech Industry. A majority of these startups are involved in the food delivery marketplace and hyper-local last mile delivery models. This has opened Indian restaurants to a whole new business opportunity. The food delivery space is growing just as fast as the ‘eating out’ industry and it might just become one more reason to start your restaurant in India.