How Food Delivery Platforms Are Reshaping India’s Restaurant Ecosystem

NCAER–Prosus Studies Highlight Food Delivery Platforms’ Growing Impact on India’s Economy and Foodservice Industry. The Landmark research shows a strong contribution to GDP and a high employment multiplier within the restaurant ecosystem.

The National Council of Applied Economic Research (NCAER), India’s leading economic policy think tank, recently released two landmark studies in collaboration with Prosus, a global technology company behind some of the world’s leading lifestyle e-commerce brands.

Titled ‘Impact of Food Delivery Platforms on the Indian Economy: GDP, Employment and Taxes and Impact of Food Delivery Platforms on Restaurants’, the studies present clear empirical evidence of how food delivery platforms are reshaping India’s restaurant ecosystem, labour markets, and economic structure. Together, they assess both micro-level business outcomes and the economy-wide contribution of the sector.

The research draws on a rigorous input–output analysis of 640 participating restaurants across 28 Tier 1, Tier 2, and Tier 3 cities. Alongside NCAER’s platform survey published in 2023, these findings complete a three-year research programme examining the evolution and impact of India’s food delivery platform economy.

Reflecting on the findings, Dr Bornali Bhandari, Professor at NCAER, said: “These studies offer a comprehensive empirical picture of how digital food delivery platforms are intersecting with India’s economy. 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.”

“At the restaurant level, the evidence of expanded market access, higher compliance, and improved operational capabilities points to a structural shift in how food service businesses participate in the economy. This research aims to equip policymakers with credible data on a sector that has scaled rapidly and is now deeply woven into India’s digital and economic fabric,” Bhandari added.

Adding an industry perspective, Sehraj Singh, Managing Director, India, and Vice President – Group Public Policy and Corporate Affairs at Prosus, noted: “The findings of these studies reflect what millions of small restaurants and platform workers experience every day. Platforms have become an essential bridge to demand, enabling restaurants to reach customers far beyond their immediate surroundings and giving many their first exposure to digital visibility, regulatory compliance, and data-driven decision-making.”

“The sector’s million-plus workers, supported by India’s growing digital infrastructure, represent one of the most dynamic labour segments in the country. At Prosus, we are proud to invest in platforms that not only grow fast, but grow responsibly—strengthening the economy and aligning with India’s long-term development goals,” Singh hghlighted.

Key findings: Economic impact

The Economic Impact study highlights the sector’s rapidly expanding footprint:

The food delivery platform sector generated ₹1.2 trillion in gross output in 2023-24 and is growing faster than the overall economy.
Direct employment in the sector reached 1.37 million workers in 2023-24, up from 1.08 million in 2021-22.
Each platform-linked job supports an additional 2.7 jobs across the wider economy, making the sector one of the highest employment multipliers within India’s services industry.

Showcasing meaningful gains for restaurants

The Restaurant Impact study points to meaningful gains for participating food service businesses:

59 percent of restaurant owners reported expanded reach to new customers.
52.7 percent introduced new menu items.
50.4 percent experienced an increase in customer volumes.
The share of restaurant revenues derived from platforms rose from 22 percent to 29 percent between 2019 and 2023.

Beyond revenue and reach, platforms also provided critical operational support. These included onboarding assistance, training, menu optimisation guidance, advertising tools, and accounting features—capabilities that many small and home-based kitchens did not possess prior to joining the ecosystem.

Policy implications for food delivery platforms

In addition to empirical findings, the studies outline several policy considerations for India’s evolving food platform economy. The strong link between platform participation and MSME formalisation suggests opportunities for targeted incentives to encourage digital adoption, particularly among small restaurants in Tier 2 and Tier 3 cities.

Given the sector’s high employment multiplier and growing fiscal contribution, the research recommends integrating platform-sector metrics into national statistical and labour monitoring systems to improve visibility into this rapidly expanding services segment. The studies also underline the importance of balanced regulatory frameworks that provide predictability for small businesses while preserving innovation, ease of entry, and consumer benefits.

Finally, as food delivery platforms now employ more than one million workers, enhancing the portability of social protections could strengthen economic security without undermining the flexibility that characterises platform-based work. Together, the studies provide a robust foundation for informed policy discussions on digital platform regulation, MSME development, labour markets, and urban economic planning. By quantifying the sector’s economic footprint and documenting changes in restaurant behaviour, formalisation, and business outcomes, the research advances understanding of a segment that is increasingly central to India’s service-led growth story.

About NCAER
India’s largest and oldest economic think tank, NCAER, was established in 1956 as a public-private partnership by the then Commerce Minister T.T. Krishnamachari and J.R.D. Tata. The vision was for a newly independent country that needed neutral institutions to serve as sounding boards for the government and the private sector. NCAER plays an important role in providing India’s policy makers specific, finite, and actionable economic ideas to reconcile a rapidly changing world with our national aspirations for ViksitBarat@2047.

About Prosus
Prosus powers the world’s leading lifestyle ecommerce brands across Europe, India, and Latin America, unlocking an AI-first world for our 2 billion customers. The Prosus technology ecosystem spans food delivery, payments, classifieds, travel, events, and mobility. Our integrated approach enhances user engagement and creates the foundation for unprecedented AI capabilities through proprietary data and cross-service intelligence.

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