India’s Food Delivery Boom: An Economic Engine Driving Growth, Jobs, and Restaurant Transformation 

India’s food delivery platform sector has emerged as a major economic force, nearly doubling its gross output to ₹1.2 trillion in just two years and growing faster than the national economy. It directly employs 1.37 million workers and creates a powerful ripple effect, with each platform job supporting an additional 2.7 jobs across the wider economy in restaurants, logistics, and agriculture.

While platforms have transformed many small businesses—enabling 59% of surveyed restaurants to reach new customers and increasing their digital revenue share—significant challenges persist, including steep commission fees that have risen to nearly 25%, leading to dissatisfaction among over a third of restaurant partners. The studies call for balanced policies that harness the sector’s high growth and job multiplier for inclusive development while addressing issues of fair pricing and social security for its workforce.

India’s Food Delivery Boom: An Economic Engine Driving Growth, Jobs, and Restaurant Transformation 

India’s food delivery platform sector is no longer a mere convenience; it has evolved into a significant economic engine. Landmark studies reveal an industry that is not just growing, but fundamentally reshaping labor markets, empowering small businesses, and generating widespread economic value at a pace that outstrips the national economy. 

The tension within this rapid expansion is palpable. For every restaurateur celebrating a surge in new customers, there is another grappling with rising commission fees. For every policy aimed at formalizing the economy through these platforms, there is a million-strong workforce seeking better social protections. This is the story of India’s food delivery revolution—a complex, high-stakes transformation where growth and friction coexist. 

Quantifying the Boom: From Output to Employment 

The scale of the food delivery sector’s growth is best understood through its economic footprint. According to the National Council of Applied Economic Research (NCAER) and Prosus, the sector’s gross output reached a staggering ₹1.2 trillion (or ₹1.2 lakh crore) in the 2023–24 financial year. What makes this figure remarkable is not just its size, but its velocity: in just two years, from 2021–22 to 2023–24, the sector’s gross value of output nearly doubled, growing at a compound annual growth rate (CAGR) of 17.1%. 

To put this in perspective, the table below compares the sector’s growth with the broader Indian economy: 

This explosive growth has directly translated into jobs. Direct employment in the sector swelled from 1.08 million workers in 2021–22 to 1.37 million in 2023–24. While this constitutes about 0.2% of India’s total workforce, its impact is amplified far beyond these direct numbers through a powerful “multiplier effect”. 

The Ripple Effect: Unpacking the Economic Multiplier 

The true economic power of the food delivery sector lies in its ability to generate activity far beyond app interfaces and delivery bikes. The NCAER-Prosus study employs rigorous input-output analysis to quantify this spillover effect, revealing one of the highest employment multipliers in India’s services sector. 

• Employment Multiplier: Each direct job on a food delivery platform supports more than 2.7 additional jobs across the wider economy. This means the sector’s 1.37 million direct workers are indirectly responsible for sustaining nearly 3.7 million more jobs in allied industries like restaurant kitchens, logistics, packaging, agriculture, and tech support. 

• Income & Production Multipliers: Every ₹1 million of income generated within the food delivery sector creates ₹2.48 million in income across the entire economy. Similarly, for production, every ₹1 million in sector output generates ₹2.05 million in wider economic production. 

• Tax Contribution: The sector also contributes to public coffers. For every ₹1 million of production, it generates approximately ₹40,000 in indirect taxes, with the overall fiscal impact nearly doubling when linkages to other sectors are considered. 

This multiplier effect illustrates that food delivery platforms have become critical nodes in a vast economic network, stimulating growth from farm to fork and from software developer to delivery rider. 

The Restaurant Revolution: Digital Transformation at the Micro-Level 

At the heart of this economic engine are India’s restaurants. A separate NCAER-Prosus study surveying 640 restaurants across 28 Tier 1, 2, and 3 cities provides a granular look at how platforms are reshaping small businesses. 

The data shows a clear trend toward deeper digital integration and business growth, summarized in the table below: 

This digital shift is structural. The revenue share restaurants derive from platforms has steadily climbed, from 22% in 2019 to 29% in 2023. For many small and home-based kitchens, platforms provide their first exposure to essential digital tools—from onboarding support and menu optimization to digital advertising and basic accounting features—thereby acting as a catalyst for formalization and professionalization. 

The Other Side of the Plate: Commissions, Dissatisfaction, and Trade-offs 

However, this transformation is not without significant friction. The same NDTV report that highlights growth also reveals a striking contradiction: approximately 35% of restaurants using platforms stated they would exit if given the choice. 

The primary driver of this dissatisfaction is financial pressure. Restaurant owners report that the average commission per order charged by platforms has soared from 9.6% in 2019 to 24.6% in 2023. For many, especially smaller outlets with little negotiating power, this erodes profitability despite steady order volumes. Additional grievances include perceived poor platform customer service and insufficient overall profitability. 

This creates a classic dependency dynamic. As Sehraj Singh of Prosus noted, platforms have become an “essential bridge to demand”. The majority of restaurants stay for the visibility and access to a vast customer network—benefits that often outweigh the steep costs, making an exit difficult even when margins are squeezed. The relationship is thus defined by a complex trade-off between reach and profitability. 

Policy Imperatives for a Sustainable Platform Economy 

The studies conclude with crucial policy considerations to ensure this high-growth sector develops in a balanced and sustainable manner. 

• Encouraging MSME Formalization: The strong link between platform adoption and business formalization presents an opportunity. Policymakers could design targeted incentives for small restaurants, particularly in Tier 2 and 3 cities, to adopt digital tools and expand their market reach digitally. 

• Modernizing Economic Measurement: Given the sector’s high multipliers and rapid growth, there is a clear need to integrate platform-sector metrics into national statistical and labor monitoring systems. This would allow for more accurate tracking and informed policymaking. 

• Balanced Regulation and Worker Security: Regulations must walk a tightrope—supporting predictable operations for small businesses while preserving the innovation and consumer benefits that platforms bring. Critically, with over a million platform-linked workers, enhancing the portability of social security benefits is paramount. This would strengthen economic security for this dynamic workforce without compromising the flexibility that defines platform work. 

Conclusion: A Powerful, Evolving Engine 

India’s food delivery platform sector stands at a pivotal juncture. It has unequivocally proven itself as a powerful engine for economic output, job creation, and the digital empowerment of small businesses. Its growth story, however, is layered with the legitimate concerns of restaurant partners and delivery workers who form its foundation. 

The path forward requires acknowledging this duality. The sector’s future vitality depends not just on continued growth in orders and valuations, but on fostering a more equitable ecosystem. By addressing commission structures, enhancing social protections, and implementing forward-thinking policies, India can harness the full potential of this digital transformation. The goal must be to ensure that this economic engine powers inclusive and sustainable growth, benefiting every link in the chain from the farmer and the chef to the delivery rider and the consumer.