India’s Food Delivery Sector Poised for 20%+ Growth Boost, Says Report

After several quarters of slowing momentum, India’s food delivery sector is set to regain its pace, with growth expected to surpass 20% over the next two to four quarters, according to a new report by brokerage firm Motilal Oswal.

The uptick is expected to be driven by festive season demand, improving discretionary spending, and the positive impact of recent GST reforms, which are putting more money in consumers’ hands.

While the sector had previously been growing at 17–18%, market leaders Zomato and Swiggy saw their gross order value (GOV) growth cool to around 18% in FY25, down from the 19–20% levels seen in FY24. However, the brokerage now projects a strong rebound, revising its forecast for FY26–FY27 to 21–23% growth. “Discretionary spending could rebound, supported by GST reforms that leave more disposable income in consumers’ hands,” the report noted.

In anticipation of higher order volumes and rising costs, both Swiggy and Zomato have raised platform fees. Swiggy has increased its fee to ₹15 per order, up from ₹14, while Zomato recently upped its charge to ₹12, from ₹10. These hikes come amid rising operational expenses, as both platforms look to protect margins during the high-traffic festive period.

A key concern looming over the sector is a new tax liability following a recent clarification from the GST Council. Online food delivery platforms must now pay 18% GST on behalf of their delivery partners, who were previously exempt from the tax. This change is expected to cost both Zomato and Swiggy an additional ₹180–200 crore annually, according to the report.

Executives from both companies told a media house that these added costs may eventually be passed on to consumers, raising the possibility of higher delivery charges in the near future.

Despite cost pressures, analysts remain bullish on the sector’s prospects. The combination of improved consumer sentiment, rising festive demand, and expanding urban markets is expected to help food delivery platforms regain momentum after a sluggish year.