Starting a cloud kitchen in India: costs, licences and unit economics

A cloud kitchen in India needs a small leased kitchen, cooking equipment, FSSAI registration, GST and local trade and fire approvals, and listings on Swiggy and Zomato. The hard part is the economics. Aggregators take a large share of each order, so the model works only when food cost, packaging and rent are tight and orders per day are high.

How big is the opportunity, really?

Large for food service overall, unclear for cloud kitchens specifically. NRAI's India Food Services Report 2024 valued the industry at ₹5,69,487 crore in FY24 and projected ₹7,76,511 crore by FY28 (NRAI). We found no national figure for cloud kitchens in NRAI's public summary. A widely repeated "30%" cloud-kitchen share comes from NRAI's Chennai city edition and describes that city's organised segment only (NRAI). Treat any national cloud-kitchen market size you see with caution unless it names its method.

What are my setup options?

There are four common routes, and they trade cash for control. The table sets them out; costs for shared kitchens and brand licences are not published in a form we could verify, so ask each provider for a written quote.

For a sense of what larger operators spend, Curefoods' prospectus gives estimates for new kitchens it planned to open. For 148 new Olio Pizza cloud kitchens averaging 800 square feet, it budgeted ₹52.64 million for civil works, ₹150.84 million for machinery and equipment, ₹45.56 million for security deposits and ₹2.96 million for approvals and licences (Curefoods DRHP). By our division that is about ₹17 lakh per kitchen. Its 1,500-square-foot Eatfit kitchens work out at about ₹36.6 lakh each on the same basis (Curefoods DRHP). A chain buying equipment in bulk is not a first-time operator, so use these figures as a reference point, not a quote.

Which licences does a cloud kitchen need?

Broadly the same as any food business, minus the dine-in approvals. Our café licences guide covers each one and the order to apply. The points that differ for a delivery-only kitchen:

• FSSAI. Registration now covers turnover up to ₹1.5 crore, with a state licence above that (FSSAI). Apply for it first.
• GST. Restaurant service is taxed at 5% without input tax credit (GST Council). For orders placed through an e-commerce operator such as Swiggy or Zomato, the platform pays that tax, not you. The composition scheme is closed to any restaurant that supplies through an e-commerce operator (GST Council).
• Trade licence and fire NOC. These are set by your city and state. Rules differ between cities, so ask the ward office before you sign a lease, especially in a residential or mixed-use building.
• Shops and Establishments. Needed as for any other food business, under your state's Act.

How dependent will I be on Swiggy and Zomato?

Very, unless you plan otherwise from the start. Curefoods, which runs brands such as EatFit and Olio Pizza, earned 82.20% of its FY25 revenue through delivery channels, down from 86.51% in FY23 (Curefoods DRHP). The same filing says it pays aggregators 18% to 22% of net value as service charge and commission, revised routinely (Curefoods DRHP).

A small kitchen should expect to pay more, not less. In July 2026 the president of the Bruhat Bengaluru Hotels Association said restaurants were paying commissions from 8–10% to as high as 28%, before payment-gateway fees, advertising and discount deductions (Business Standard). The associations threatened to stop taking orders. They deferred that after Swiggy and Zomato agreed to make promotional campaigns opt-in, with a new deadline of 1 September (Angel One). We could not confirm what happened after that date.

The rules around platforms are also unsettled. A Competition Commission investigation found in 2024 that exclusivity deals and price-parity requirements at both platforms breached competition law (Business Standard/Reuters). Those are investigative findings, not a final order. In July 2026 NRAI was still asking the Commission for interim relief while the case continued (Business Standard). Read any exclusivity clause in your listing agreement carefully.

What do the unit economics look like at scale?

Thin, even for the biggest operator. Rebel Foods, which runs Faasos, Behrouz Biryani and other delivery brands, reported FY26 operating revenue of ₹1,951.6 crore and a net loss of ₹281.8 crore, according to its filings with the Registrar of Companies (Entrackr).

Its cost lines show where the money goes. Materials cost ₹784.4 crore, brokerage and commission ₹317.7 crore and advertising ₹193.9 crore (Entrackr). By our calculation that is roughly 40%, 16% and 10% of operating revenue. Rebel's figures cover every channel and market it sells in, including outside India, so a kitchen selling only through aggregators should expect a higher commission share. Curefoods reported a loss of ₹1,699.68 million for FY25 (Curefoods DRHP). Company-level losses include head-office and expansion costs, so they do not prove a single kitchen cannot make money. They do show that scale alone has not fixed the model.

Worked example: one delivery brand from a leased kitchen

These numbers are illustrative, chosen to show the maths. They are not benchmarks. Assume a single-brand biryani and rolls kitchen in a 400-square-foot leased unit, selling only through Swiggy and Zomato, with an average order value of ₹350 before GST.

Per order

Fixed costs per month

Break-even is ₹1,82,000 ÷ ₹113, or about 1,611 orders a month: roughly 54 a day. At 1,500 orders a month the kitchen loses about ₹12,500. At 2,000 orders it makes about ₹44,000 a month.

If the kitchen cost ₹15 lakh to set up, ₹44,000 a month pays that back in about 34 months, before any repairs or equipment replacement. Three levers move this most: commission (negotiate, or shift repeat customers to direct ordering), discounts (only opt in to campaigns you have costed), and food cost (fix portions and recipes). Cutting commission from 22% to 18% alone adds ₹14 an order, which lowers break-even to about 48 orders a day.

What should I do before signing a lease?

Test demand before you build. Cook the menu from an existing kitchen or a shared kitchen for a few weeks, list it on both platforms, and track orders per day, repeat rate and ratings. Only commit to your own space once the numbers clear break-even with room to spare.

1. Build the per-order model above with your own menu, supplier prices and the commission in your draft listing agreement.
2. Check the building's zoning and fire approval before paying a deposit.
3. Apply for FSSAI and GST as soon as the lease is signed.
4. Set up a direct-ordering link or WhatsApp channel on day one and put it on every package.
5. Read the aggregator agreement for exclusivity, price parity and campaign opt-in terms.