Food delivery sector to surpass 20% growth over next two to four quarters: Report
The sector, which had been expanding at around 17–18%, has seen growth taper in recent quarters.
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India’s food delivery industry is expected to accelerate beyond 20% growth over the next two to four quarters, buoyed by festive season demand and the positive impact of recent Goods and Services Tax (GST) reforms, according to a report by brokerage Motilal Oswal.
The sector, which had been expanding at around 17–18%, has seen growth taper in recent quarters. Gross order value (GOV) for market leaders Zomato and Swiggy eased from 19–20% in FY24 to about 18% in FY25. The brokerage now forecasts a rebound, revising its growth estimates for the two platforms upwards to 21–23% for FY26–FY27, from 19–20% earlier.
“Discretionary spending could rebound, supported by GST reforms that leave more disposable income in consumers’ hands,” the report stated.
As with last year, both Swiggy and Zomato have increased their platform fees ahead of the festive rush to offset rising operating costs and shore up margins. Swiggy raised its fee to ₹15 from ₹14, shortly after Zomato lifted its charge to ₹12 from ₹10.
However, analysts caution that growth momentum comes with an added tax liability. Following a clarification from the GST Council, online food delivery platforms are now required to pay the 18% GST on behalf of their delivery partners, who were previously exempt. This is expected to result in an additional annual outgo of ₹180–200 crore each for both Zomato and Swiggy.
Executives at the companies told The Economic Times that the extra costs are likely to be passed on to consumers.
