According to officials and industry experts, several leading global and Indian restaurants and cafes have approached the Indian Railways seeking information on rules for opening premium food and beverage outlets at stations, where they see greater sales potential than airports. The government had announced last month that it would allow established chains like McDonald’s, KFC, Haldiram’s, Wow Momo and Baskin Robbins to set up their outlets at railway stations.
According to officials, the first such outlets are expected to open in 2026. “We want to make the passenger experience at railway stations similar to that of airports,” a senior official said in an ET report. He said the National Transport Company’s Catering Policy 2017 was revised last month to include premium brand catering outlets.
Branded chains will be licensed
National Restaurants Association of India (NRAI) president Sagar Daryani said the value of orders at airports may be higher, but railway stations provide an opportunity to operate at an unmatched scale. He said that with the right model, railway outlets can generate a very good return on investment, which will be driven by higher sales volume, shorter turnaround time (TAT) and lower entry costs. The government has announced that it will conduct an e-auction to allot five-year licenses to restaurant chains at more than 7,000 stations. They can set up company-owned or franchise stores.
Special conditions will be made
The official said premium food outlets will have to maintain a significant improvement in food and service quality and also pay a fixed license fee for space in the stations. Regional railways will be allowed to make “special conditions” to ensure the efficiency of these restaurants while balancing the interests of passengers. According to a recent study conducted by retail group IRHPL, beverages are a significant contributor to food and beverage sales at airports, as soft drinks, coffee, juice and liquor account for 70 percent of airport food and beverage revenue. Food and beverage companies are anticipating similar demand at railway stations, officials said.
Companies will benefit
A spokesperson for Haldiram, India’s largest packaged ethnic snacks company, said that this policy opens up immense potential for the industry and we have certainly seen many benefits from opening restaurants at railway stations. He further said that some minor issues are yet to be resolved, and we are working with the government for this… If implemented properly, this will become the next big QSR (Quality, Service and Restaurant) business opportunity, as people of all ages and socio-economic classes travel by train.
Income will increase
NRAI President and Wow! Momo co-founder Dariyani said that as the operational framework matures, railways will be a key growth engine for formal food brands. The new outlets will help the railways in its efforts to increase non-fare revenue, which currently accounts for about 3 per cent of its total revenue. As per NITI Aayog’s assessment, there is immense potential in this sector, as the non-eligible revenue of railways in developed countries is around 30 per cent. Indian Railways in FY 2024 Rs. 588.07 crore and in FY 2025 Rs. 686.9 crores earned unreasonably high income.