India’s Restaurant Sector Can Generate 1.5 Crore Jobs by 2028 with Policy Reforms, Says NRAI VP

India’s restaurant sector, which currently employs approximately 85 lakh people, has the potential to generate employment for 1.5 crore individuals by 2028. 

This optimistic projection comes from Mr Zorawar Kalra, Vice President of the National Restaurant Association of India (NRAI), who believes that the right policy support could unlock significant growth and employment opportunities for the industry.

Key Demand: Granting ‘Industry’ Status and GST ITC

One of the primary demands from the NRAI is to grant the restaurant sector ‘industry’ status—an acknowledgement that would help streamline access to various government schemes and incentives. Additionally, the association is pressing for the availability of input tax credit (ITC) under the Goods and Services Tax (GST) framework.

Currently, restaurants are taxed either at 5 per cent GST without ITC or at 18 per cent with ITC. This dual structure is seen as unfavourable and burdensome, especially for smaller players in the industry. Kalra, who also heads Massive Restaurants Pvt Ltd, stated that the lack of ITC is a significant operational challenge and expressed hope that this issue would be addressed by the government soon.

Tensions with Aggregators Over Fair Competition

Beyond taxation, the relationship between restaurants and food delivery aggregators such as Swiggy and Zomato remains strained. The NRAI has voiced concerns over these platforms launching their own private-label brands in the quick-commerce segment a move seen as threatening to fair market dynamics.

Kalra called for open dialogue between aggregators and restaurant owners to ensure mutually beneficial operations. “Aggregators must engage more constructively with the sector and acknowledge the challenges it faces,” he added.

Service Charge Issue Remains Under Legal Review

The issue of service charges levied by restaurants continues to be a matter of legal debate. With the case currently sub judice and scheduled for a hearing in the Delhi High Court on May 9, 2025, Kalra chose not to comment in detail. However, he affirmed that service charges are globally accepted and remain optional for customers in India.

Read More: Best Hotel Stocks in India in April 2025 – Indian Hotels, Oriental Hotels & More – 5yr CAGR Basis. 

Conclusion

With over 5 lakh restaurants under its umbrella, the NRAI believes that the restaurant industry is poised to play a pivotal role in India’s economic future, provided that it receives the regulatory recognition and support it seeks. Kalra concluded that policy reforms, especially around GST and the aggregator ecosystem, could empower the sector to exceed employment targets and contribute meaningfully to national growth.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.