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Ups and Downs of Restaurant Industry in India ( Statistics 2013-2020) & Predicted Growth by 2025

By Shuvo Roy Last Updated -- Thursday, 2021-11-18
Restaurant Industry in India

Which country is popular for restaurants around the globe? India is the third most famous and best food server after Italy and France.

The foodservice industry has thrived in the early 250 BC in India. There are indeed so many aphorisms about the blooming of restaurant services.

“It is heard that the long-distance train journey is the prime reason to develop the foodservice in India. On the other hand, the strict dietary requirements of particular castes were a considerable thought to initiate a diversified eatery.”

What is the total number of restaurants in India at present? Approximately 3 crores foodservice businesses are running in India excluding 55,000 hotels in total.

India has the second most foodservice establishments (4.2 million) after China Mainland (9.3 million) in the world. This survey is based on the organized category restaurant.

What are the Major Segments of the Indian Foodservice Industry?

The restaurant industry in India is a popular business sector. The foodservice business sector in India comprises two major segments.

  1. Organized Category (30 - 35%) and
  2. Unorganized Category (65 - 70%)

Source: FICCI

Organized Segment

The organized segment is a well-developed and well-structured restaurant industry in India. The organized segment focuses on the structured supply chain with quality control. 

The restaurants have multiple outlets with proper and efficient management. Besides the operational workflow is seamless with having standardized interior and exterior designs. 

Source: FICCI

  • Dining: Fine Dining, Casual Dining
  • Bars and Lounges: Cafes, Food Courts, Kiosks, Clubs
  • Quick Service Restaurants: Take Away, Home, or Office Delivery

The casual dining, fine dining, and quick-service restaurants cover 75 to 80% of the market where the bars and lounges account for 8 -10%. On the other hand, the catering service has a 13-15% market share.

Source: FICCI

  • Casual Dining Restaurants: 52%
  • Quick Service Restaurants: 20%
  • Restaurants in Hotels: 8%
  • Pubs, Clubs, Bars, and Lounges: 11%
  • Cafe: 5%
  • Ice Cream, or Frozen Desserts: 2%
  • Fine Dining Restaurants: 2%

Unorganized Segment

The biggest portion of the restaurant industry in India is occupied by unorganized foodservice businesses. The lackings of a proper chain of supply, organizational structure, maintenance, technical standardization, business practices are common scenery of an unorganized segment. 

  • Food Trucks
  • Dhabas
  • Street Stalls
  • Roadside Eateries
  • Hawkers
  • Food Carts

What is the Growth Rate of the Restaurant Industry in India in the Last 5 Years?

The foodservice industry is contributing exponentially to the development of the economy of India. In 2020, the COVID-19 pandemic greatly impacts the restaurant industry worldwide. 

The restaurant industry in India has been improving its track although the fluctuation happens based on some unexpected circumstances. 

Foodservice Status In 2016

The restaurant market is worth over 3.10 Lakh Crores in India. It contributed around Rs.22,400 Crores Taxes in that year. Moreover, the foodservice industry employs almost 6 million in India. And the growth rate at Compound Annual Growth Rate (CAGR) of 4% from 2013-1016 based on the report.

Market Size of Indian Restaurant In 2017

It is estimated that the restaurant market size including the organized and unorganized sector is INR 3,37,500 crores in 2017. 

Source: FICCI

Mumbai (11%) and Delhi NCR (11%) contribute a considerable percentage of the overall foodservice market in India which is 22%. Excluding these two metros, there are 6 more mini-metros like Ahmedabad, Pune, Bangalore, Kolkata, Chennai, and Hyderabad which cover 20% market of foodservice.

The projected growth rate by 2022 is 10% and reach Rs.5,52,000 crores 

Market Share and Growth Between 2013 & 2017

In 2013, the unorganized market share was higher (70%) than in the following years. It decreased its share value to 66% in 2016. 

Source: FICCI

And it is projected that the market share of the unorganized segment will drop 57% in 2022. The main reason behind this is the restaurant owners are changing the business segment from unorganized to organized.

Source: FICCI

Restaurant Market in 2018-19 in India

Around 7.3 million people depend on the restaurant industry in 2018-19. The organized foodservice sector at this time was 35% of the total market whereas the unorganized segment covered 65%.

Besides, the organized restaurant sector contributed Rs.18000 crore in taxes. National Restaurant Association predicted that if the unorganized sector would become an organized sector, the number can be 2x. 

After the retail and insurance sector, the restaurant industry is the second largest business service. The market size of the foodservice industry was Rs.3.7 trillion. The growth rate was 10% and the CAGR growth of 8.4% from 2013 to 2018. 

On the other hand, the Indian restaurant service was worth around Rs.4.2 trillion in 2019. Compared to 2016, it increased CAGR by 11%. 

Foodservice Market in 2020 in India

Based on the research of the Indian Hospitality Industry, the number of restaurants in India was 2.3 crore (unorganized sector) in 2020. In addition, the organized restaurant number was 75 lakh. 

The pandemic situation greatly impacts the food industry. In 2020, the highest market share of the foodservice industry is the Quick service restaurant chain which holds 55%. The market value of the restaurant industry in 2020 was almost Rs. 4 trillion. 

India couldn’t get off the claw of the pandemic. 25% of restaurant owners had to permanently quit due to the pandemic situation. In this regard, 2.4 million employees lost their workplaces. Besides, the Indian restaurant market dropped off 53% in the devastating year.

The Indian restaurant market size fell from Rs 423,624 crore to Rs 200,762 crore in FY2020.

The Present (2021) Foodservice Industry Status in India

India is one of the biggest marketplaces for the food industry worldwide. At present, almost 9 million people are involved in the foodservice sector in India.

  • The market value of the unorganized segment: Rs. 1.6 trillion
  • The market value of the organized sector: Rs. 2.5 trillion
  • Largest market share: Casual dining restaurants 

The growth at CAGR at 6% by 2021 was predicted in 2016. But this rate of growth increased more than expected. By 2022 the growth at CAGR is predicted to be 7% in the unorganized sector and 16% in the organized sector. 

The market share of the unorganized sector is predicted at 57% which is 11% lower than in 2017. On the other hand, 9% market share will increase in the organized segment of the foodservice industry which is from 2017 to 2022.

At present, the number of restaurants in India is growing. The market size of the Indian foodservice market is Rs. 4,98,500 crore in 2021  including organized, unorganized, chain markets, restaurants in hotels.

The market share has greatly dropped from 2013 to 2021 which is 70% to 7% in the unorganized segment. On the contrary, the organized market share fluctuated.

Prime Influencers of Indian Food Industry


  • A huge population: 1.38 billion
  • Earning population group: 15-60 Years
  • A higher number of working people
  • Highest spending age group: Below 25 Years

Per Capita Expenditure

  • Increased GDP 
  • CAGR: 10.5%
  • Per capita income: Rs. 86, 659


  • GDP growth rate: 9.5%
  • Fastest growing country

Source: Statista

Virtual Transaction

  • Credit Card 
  • Debit Card
  • Growing plastic money
  • Cashless spending
  • Cashback or discount offer


  • Internet users: 825.30 million
  • Growth rate: 3.79%
  • Wired broadband connection: 22.8 million
  • Growth rate: 2.2%

Women Employment

  • Female employee: 41.25%

Source: Statista

  • Increased education rate: 70.3%

Predicted Foodservice Market in India by 2025

In 2025, the Indian foodservice market is forecasted to reach $95.75 billion. The growth of CAGR at 10.3%. 

Besides, the latest report found that online food service will be doubled by 2025 in the Indian market which is worth $13 billion. 

On the other hand, the chain restaurant has already reached the value of Rs. 400 billion in 2020. It is expected that by 2025, it’ll reach Rs. 960 billion.

Source: Statista

Source: FICCI

Source: FICCI

The dependent workforce on the foodservice sector will be nearly 15.3 million in India by 2025. 

By 2025-2026, the restaurant types that will be popular to the consumers are-

  • Full-service restaurants
  • Quick service restaurants
  • Fast food restaurants
  • Street stalls
  • Cafes or Bars
  • Fully home delivery based services

The two main structures of the eatery will be seen including

  • Chained outlets
  • Independent outlets

Last Prediction

The impact of Covid-19 is the greatest barrier of the way of the foodservice business. Although modern technology comes up with a restaurant business solution, it hampers thousands of foodservice businesses.

The growth rate will be higher in the long run than the prediction if the foodservice industry ensures the integration of modern restaurant management software. 

Moreover, the online food ordering system is emerging. It’s a magnificent opportunity for entrepreneurs to start a food service business nowadays and ensure profitability and sustainability.

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