GST reforms, festive demand to boost food delivery and Q-commerce, say analysts

Food delivery apps, quick service restaurants (QSRs), and quick commerce (QC) firms are bracing for a fresh wave of growth, driven by recent Goods and Services Tax (GST) reforms, higher discretionary spending, and a pickup in consumer confidence. Analysts say the upcoming festive season could provide an added boost to demand.

The sector had been struggling in recent quarters. Growth in gross order value (GOV) for both Swiggy and Zomato slowed to 18% in FY25, compared with 19–20% in FY24, as weak consumer sentiment and inflationary pressures weighed on demand. Quick commerce players, meanwhile, faced profitability challenges due to aggressive competition, rapid dark store expansion, and steep customer acquisition costs.

That trend now appears to be shifting. 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.” With tax cuts on essentials and rising disposable incomes, QC operators could benefit most, especially in non-metro markets.

Swiggy’s Food Marketplace CEO Rohit Kapoor also struck an optimistic note. “These reforms stimulate consumption, support small businesses, and provide a strong tailwind for the quick commerce sector,” he said in a LinkedIn post on Friday.

Still, analysts caution that the benefits for food delivery firms may not be uniform. The inclusion of delivery services under Section 9(5) of the CGST Act means platforms must now collect and remit GST on delivery charges. This, according to Malpani, has already led to higher delivery fees on most apps. “This could lead to a marginal increase in delivery costs, though subscription models may help cushion the impact for regular users,” he noted.

Rahul Ganjoo, CEO of District by Zomato, said the Council’s tax moves would help expand access for a wider set of consumers. “The GST Council’s decision to rationalise tax slabs will make quality experiences more accessible for urban and emerging city consumers and will also aid consumption and the economy in general,” he said.

Not everyone is convinced, though. Kazem Samandari, co-founder and executive chairman of French patisserie chain L’Opéra, pointed out that the direct benefits to the restaurant industry remain limited. “The (GST) benefits are minimal, and indirect, such as possible lower costs for equipment and some services. What our fraternity needs most is to allow input credits, which are currently not available to us,” he said.

Industry watchers believe the real test will come in the festive season, when consumer sentiment usually peaks. If spending momentum revives as expected, both delivery and quick commerce could be headed for a stronger growth cycle.

With inputs from TOI