The restaurant business worldwide was one of the hardest hit by the Covid-19 pandemic. The Indian food services market was no exception, as it witnessed 53 per cent degrowth in FY2021 compared to the previous fiscal, a report by the National Restaurant Assoc¬iation of India (NRAI) said on Monday.
The contraction in the food services industry led to the permanent closure of over 25 per cent of food business operators, which resulted in job losses of nearly 2.4 million in India.
The Indian market size slid to an estimated Rs 200,762 crore after a high of Rs 423,624 crore in FY2020, but the organised sector was faster to recover and its share in the food services pie is expected to increase to 54 per cent by FY2025, up from 27 per cent in FY2021, the Covid-19 impact assessment re¬port added. In the ongoing fiscal year, the industry — which employs 7.3 million people — is expected to recover and reach a size of Rs 472,285 crore.
Revenue and profitability also took a significant hit due to Covid-19, with average revenue post-lockdown seeing de-growth of 46 per cent compared to pre-Covid levels, and average profitability falling 88 per cent, said the report that was released at a flagship roundtable of the industry body.
The report cited measures taken by the Centre and policy advocates, and also offered recommendations to the central and state governments to bail the industry out. The recommendations include restoration of input tax credit on the goods and services tax, framing a fair e-commerce policy, unemployment pay cover for employees, general notification allowi¬ng the invoking of force majeure and adjustment of licence fees for the period of operations under restrictive conditions.
Covid impact assessment report on Indian food services industry
- 25% food business operators shut down permanently
- Nearly 2.4 million jobs lost
- Indian food market size shrank to Rs 200,762 crore from Rs 423,624 crore in FY2020
- Average revenue post-lockdown seeing de-growth of 46% compared to pre-Covid levels
- Average profitability falling 88%