Budget 2025: NRAI seeks industry status, subsidies for food services sector

National Restaurant Association of India (NRAI) on Wednesday asked the government to grant industry status to the food services sector while seeking an equitable and fair e-commerce policy to provide a level-playing field to protect restaurants, delivery partners and consumers from potentially exploitative practices of platforms.

In its pre-Budget recommendations, National Restaurant Association of India (NRAI) said restaurants should be allowed to operate for longer hours, and also sought targeted subsidy schemes and access to debt financing for SMEs.

NRAI said the industry is expected to reach Rs 7,76,511 crore and grow at an 8.1 per cent CAGR by 2028, making it the third-largest food services market globally.

"Given the size (and) immense contribution of the food services industry to the country's economy, it should be accorded an industry status," NRAI said in a statement.

Industry status helps in getting lower utility tariffs, reduced property taxes, easier access to finance, and softer loans.  Get more details on Budget 2025

Seeking an equitable and fair e-commerce policy, NRAI said, "Balanced policies and regulations are required to enable a level-playing field where platforms can continue to innovate while restaurants, delivery partners and consumers are protected from potentially exploitative practices."  The restaurants' association also called for rationalisation of licences saying a simplified and standardised licence policy -- applicable across the country should essentially cover issues related to food safety, hygiene, environment, human safety, labour and taxation.

On the taxation part, NRAI recommended restoration of GST input tax credit and said, "In addition to the existing 5 per cent slab without ITC, a new slab of between 12 per cent and 18 per cent GST, with ITC as the government deems fit, may kindly be introduced for restaurants not located in hotels with room tariff of more than Rs 7,500."  Calling for a review of notification for GST on commercial leases through RCM, NRAI said, the notification has caused inflationary pressure on most of the smaller restaurants and MSME business owners who were generally renting from unregistered dealers.

NRAI President Sagar Daryani said the food services industry is critical to India's economy, providing significant revenue to the government, employment, and consumption. Despite its potential, the sector faces challenges that restrict its growth and expansion.

"To address these challenges, timely support and reforms are required. Balanced and fair policies will not only unlock the industry's maximum potential but will also ensure long-term growth, benefiting millions of employees, consumers, and businesses while reinforcing its position as a key economic driver," he added.