The average Indian household will spend 35.3 percent of total household budget on food in 2025, ever-increasing by 2.1 percentage points from 33.2 percent in 2005, Fitch Solutions said on Friday.

Growing wages and disposable income has led to this change in proportion over the past 20 years, enabling the average Indian household to afford more than just basic food staples. Between 2005 and 2025, the number of households with an annual disposable income of 5,000 dollars and above will increase by 57.7 percentage points (or 173 million households) from 2.1 percent in 2005 to 59.8 percent in 2025.

Over 2005-2025, Fitch forecasts food spending to grow by an annual average of 12percent compared to the annual average inflation rate of 6.3percent over the same period, indicating real growth in food spending over this period. As a result, there are several instances of shifts in dietary spending stemming from income growth with consumers spending a lesser proportion of their food spending on staple food items such as rice, trading up for other food products such as animal proteins.

When breaking down the average Indian household spend on food, three food categories (meat and poultry, bread, rice and cereals and fruits) will account for nearly 70 percent of total food spending in 2025. Meat and poultry products will account for the largest share at 30.7percent of total food spending; bread, rice and cereals at 23.8percent; and fruits at 16percent. These three food categories will see their share of total food spending increasing from 48.4percent of total food spending in 2005 to 70.5percent in 2025.

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