Indian households are likely to spend one third of their food bills on proteins such as meat and poultry by 2025 due to rising disposable income and inflationary pressure, while spending on staples like bread, rice and cereals will decrease from the levels of 2005, Fitch Solutions said on Friday
NEW DELHI :
Indian households are likely to spend one third of their food bills on proteins such as meat and poultry by 2025 due to rising disposable income and inflationary pressure, while spending on staples like bread, rice and cereals will decrease from the levels of 2005, Fitch Solutions said on Friday.
“Growing wages and disposable income has led to a change in proportion over the past 20 years, enabling the average Indian household to afford more than basic food staples," Fitch Solutions, an affiliate of Fitch Ratings, said in a report on India dietary spending.
According to analysis, the average Indian household will spend 35.3% of the total household budget on food in 2025, up 2.1 percentage points from 33.2% in 2005. Household spend on meat and poultry will account for the largest share at 30.7% of total food spending, up from 17.5% in 2005. During the same period, spending on bread, rice and cereals will decline to 23.8% from 28.8%, while spending on fruits will go up to 16% from 6.4%.
However, the rise in meat consumption in India will not be significant and the nominal spending growth is primarily attributable to inflationary pressures. “Between 2005 and 2025, spending on meat will grow by an annual average of 17%, outperforming headline food spending of 12%. However, we note that on a per capita basis, the average Indian will only consume 4kg of meat, as compared to 3.1kg in 2005, implying a compounded annual growth rate of 1.4% over this period. We highlight that the prices of meat and fish have increased by 7.9% year-on-year between 2012 and 2021, above the headline inflation rate of 5.8% across the same time period," it added.
By 2025, poultry will be the most consumed meat, with per capita consumption of 2.9kg, increasing from 1.1kg in 2005 and representing 71% of total meat consumed. “Beef will be one of the least consumed meat at 0.5kg in 2025 decreasing from 1.1kg in 2005. We highlight that the low level of meat consumption is mainly attributable to religious beliefs of Hindus, which represent 79.8% of the population (approximately 900 million people) in India in 2011. Diet in Hinduism varies with its diverse traditions, with some followers advocating a vegetarian diet, while others may opt for non-vegetarian diet that includes meat. However, Hindus who eat meat will generally avoid consuming beef, as it is considered sacred and goes against their religious beliefs," Fitch said.
Rice and cereal products are staple foods in India, as it is relatively inexpensive and serves bulk of the meal, with many dishes revolving around it. Between 2005 and 2025, per capita rice consumption will increase from 70.4kg to 77.1kg, while spending on rice will grow by an annual average of 10.7%. Spending on cereals such as wheat flour will grow by an annual average of 11.9%.