Food delivery platforms double economic footprint in two years, outpacing GDP growth

Food delivery platform economy doubled

Food delivery platforms sharply expanded their economic footprint in FY24, with the sector’s contribution to India’s economy nearly doubling over two years and growing far faster than overall GDP, even as the country recorded about 9 percent real economic growth.

According to a study by the National Council of Applied Economic Research (NCAER), the food delivery platform sector generated Rs 1.2 trillion in gross value of output (GVO) in 2023–24, up from Rs 612.7 billion in 2021–22. This lifted the sector’s share in national output to 0.21 percent, from 0.14 percent just two years earlier.

“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,” said Bornali Bhandari, professor at NCAER. “At the restaurant level, the evidence of expanded market access, higher compliance and improved operational capabilities points to a structural shift in how food services businesses participate in the economy.”

Value addition and growth momentum

The sector’s gross value added (GVA) rose to Rs 475.9 billion in FY24, equivalent to about 0.2 percent of national GVA, nearly doubling over the same period.

NCAER estimates show that the sector’s GVO and GVA grew at compound annual rates of 17.1 percent and 16.9 percent, respectively—roughly twice the pace of all-India output growth. In real terms, however, growth was lower at 7.9 percent, reflecting inflation effects.

Employment and spillover effects

Employment directly linked to food delivery platforms increased from 1.08 million workers in 2021–22 to 1.37 million in 2023–24, highlighting the sector’s rising role as a labour-intensive services engine.

The study finds that the employment-to-output ratio in the sector stood at 1.1 in FY24. This implies that for every one job created directly in food delivery platforms, 2.7 jobs were generated across the wider economy—a multiplier higher than most services sectors and broadly comparable to the hotels and restaurants industry.

The spillover effects extend beyond jobs. For every one unit of output added in the food delivery platform sector, 2.05 units of output were generated in the overall economy in 2021–22, underlining the sector’s strong linkage effects with logistics, restaurants, packaging and allied services.

A structurally significant digital sector

Taken together, the findings suggest that food delivery platforms are no longer a peripheral digital service but a structurally significant part of India’s services economy, with growing contributions to output, employment and formalisation.

As the sector scales further, the NCAER study argues, credible measurement of its economic impact will be increasingly important for policymakers assessing labour markets, urban consumption and the evolving digital economy.