India’s food delivery and quick commerce sectors are set for a fresh phase of growth, with analysts pointing to the recent goods and services tax (GST) reforms, stronger discretionary spending, and a revival in consumer confidence as the key drivers.
Industry trackers note that growth in online food delivery had cooled in recent quarters, with gross order value (GOV) for market leaders Swiggy and Zomato slowing to 18% in FY25, from 19-20% in FY24. Quick commerce players too had faced pressure, as aggressive competition, rapid expansion of dark stores, and higher customer acquisition costs weighed on margins.
That slowdown may now be short-lived. Brokerage Motilal Oswal said GST rationalisation and the upcoming festive season should help lift order volumes and frequency, with food services and QC among the biggest beneficiaries. Naveen Malpani, partner and consumer industry leader at Grant Thornton Bharat, said, “The GST rationalisation is expected to unlock momentum in discretionary spending, particularly in food services and quick commerce.”
Swiggy’s Food Marketplace CEO Rohit Kapoor echoed that view in a recent LinkedIn post, noting that the reforms will provide a “strong tailwind” for the sector. Zomato’s District CEO Rahul Ganjoo added that lower tax slabs will make quality experiences more accessible for both metro and emerging city consumers, boosting consumption at large.
However, some players argue the impact could be uneven. Since delivery services now fall under Section 9(5) of the CGST Act, platforms must collect and remit GST on delivery charges. Several companies have already raised fees, which could nudge up consumer costs.
Kazem Samandari, co-founder and executive chairman of French patisserie chain L’Opera, said the sector still needs critical reforms such as input credit eligibility. “The benefits are minimal and indirect. What we require most is input credit access,” he noted.
