Indian Household Consumption Diversifying Beyond Food Essentials, Finds SBI Research Report

Indian household consumption is increasingly diversifying, with spending gradually moving beyond basic food essentials toward non-food products and services. According to a research report titled 'India's Consumption Journey' by SBI Research, this transition is being shaped by changing dietary preferences and evolving household structures.

The findings are based on the Household Consumption Expenditure Survey (HCES) 2023-24, which was conducted by the National Statistics Office (NSO) and analyzed data from 2,61,953 households across both rural and urban regions of India.

Data from the report shows that food expenditure accounts for approximately 32.82 percent of total household consumption expenditure. Meanwhile, non-food items and services together make up nearly 67 percent of the consumption basket, highlighting a clear structural shift in how households allocate their budgets.

The research highlighted a growing preference for protein-rich foods, vegetables, and fruits across households regardless of income categories, though notable regional differences persist. Among states, Sikkim recorded the highest average household expenditure on selected protein-rich food items at ₹1,776, followed by Goa at ₹1,711 and Haryana at ₹1,649. Conversely, Odisha reported the lowest expenditure in this category at ₹656, followed by West Bengal at ₹745 and Chhattisgarh at ₹729.

Demographic composition also plays a key role in influencing household food choices. Families with a higher proportion of elderly members tend to allocate relatively larger shares of their budget toward milk, fruits, and vegetables. In contrast, households with a larger share of children spend more on milk products, served food, and packaged food.

Geographical variations remain evident across specific food categories. Milk and milk products accounted for 28.6 percent of food expenditure in Haryana, while cereals constituted 38.6 percent in Jharkhand. Additionally, Chhattisgarh recorded the highest expenditure shares for pulses at 20.5 percent and vegetables at 14.3 percent.

The report noted that food consumption patterns remain heterogeneous even among households with similar overall expenditure levels, with differences particularly pronounced in cereals and pulses. While the findings point toward a gradual movement in India toward more balanced dietary patterns, disparities in protein consumption across states and gender groups remain significant.

Overall, the SBI Research report indicates that India's consumption journey is driven by changing household needs, demographic factors, and a broader diversification of spending beyond essential food items.

"The shift in household spending toward non-food items and services, as highlighted by the SBI Research data, points to an evolving consumer market in India. For businesses and entrepreneurs, understanding these changing consumption patterns across demographics and regions is crucial. As non-food expenditure claims nearly 67 percent of household budgets and dietary preferences shift toward protein and packaged options, companies across retail, services, and consumer goods must adapt their offerings to meet these diversified demands." — Dr. Shishir Gupta, Founder & CEO, StartupLanes