India’s restaurant and food services industry has the potential to become a leading employment generator, creating up to 1.5 crore jobs by 2028, provided it receives targeted policy reforms and infrastructural support. This projection was recently highlighted by the National Restaurant Association of India (NRAI), which urged stakeholders to prioritise formalisation and streamline regulatory hurdles to unlock the sector’s next phase of growth.
Currently employing over 85 lakh individuals, the Indian restaurant sector contributes significantly to the country’s service economy. Yet, according to the NRAI’s latest India Food Services Report 2024, the potential for expansion is largely untapped, with a majority of the industry still operating informally or semi-formally.
“The food services sector has shown exceptional resilience and growth potential post-pandemic,” said Zorawar Kalra, Vice President of NRAI. “With the right impetus — including industry recognition and input tax credit on GST — we can double our employment numbers and build an ecosystem that empowers both entrepreneurs and workers.”
India’s Appetite for Expansion
Valued at ₹5.69 lakh crore in FY24, the food services industry is projected to reach ₹7.76 lakh crore by FY28, driven by rising disposable incomes, urbanisation, and a growing dining-out culture. The NRAI report also forecasts the industry’s organised segment to grow from 43.8% in FY24 to 52.9% by FY28, suggesting a clear shift towards formal business models.
This shift is not just cosmetic — it could translate into tangible employment gains, especially in Tier 2 and Tier 3 cities where demand is rising, and operational models like quick service restaurants (QSRs), cloud kitchens, and food courts are rapidly proliferating.
The combination of demand-side drivers and backend innovations such as kitchen automation, tech-led inventory control, and delivery platform integrations is expected to further accelerate scale.
Structural Bottlenecks Still Persist
However, the industry’s momentum is tempered by several long-standing challenges. Licensing remains a multi-window process, with restaurants often needing to secure 15–20 approvals from various local and state authorities. This administrative burden disproportionately affects smaller and first-time operators, particularly in the informal sector.
“The sector’s growth is being stifled by regulatory complexities,” said Anurag Katriar, Past President of NRAI and CEO of Indigo Hospitality. “A unified hospitality policy, standardisation of licenses, and enabling digital compliance will be key to unleashing its employment potential.”
Another major hurdle is the lack of GST input credit, which significantly raises operational costs. Industry leaders argue that restoring this benefit could improve profitability, enable reinvestment in talent, and incentivise formalisation.
Skilling and Formalisation Are the Way Forward
Beyond policy tweaks, the NRAI has also advocated for a national skilling roadmap tailored to the food services sector. With increasing customer expectations for hygiene, consistency, and service, upskilling the workforce across front-of-house, kitchen, and delivery roles is seen as critical.
By integrating hospitality training into vocational curriculums and supporting apprenticeships, the industry could build a robust, future-ready workforce. The current estimate of 85.5 lakh jobs is expected to rise to 1.03 crore by FY28, according to NRAI’s baseline projections. However, if broader formalisation and incentives are implemented, this number could surge to 1.5 crore, as projected by Kalra and other senior leaders.
A Call to Action
The NRAI’s latest projections are not merely a growth forecast — they’re a call to action. As India aims to become a $5 trillion economy, service sectors like hospitality will play a critical role in job creation and urban economic development.
With the right mix of policy alignment, technological enablement, and skilling investments, India’s food services industry could become a cornerstone of inclusive economic growth — nourishing not just its people, but its workforce.
