Home ／ Insights on entering the Indian market
2026.03.26
Indore, in Madhya Pradesh state, has been selected as India's cleanest city for eight consecutive years in the government's Swachh Survekshan (cleanliness survey), making it a model city for sanitation management in India. This commercial city, with a population of about 3.5 million, is also known for being described by celebrity chef Vikas Khanna as "India's ultimate street food city," achieving a rare urban environment where cleanliness and a rich food culture coexist.
Indore's economy is estimated at $14 billion (2024 estimate), establishing it as central India's largest economic city. Madhya Pradesh state's overall GSDP is expected to grow 11.14% in FY2025-26, with per-capita income projected to reach about 169,000 rupees. In October 2025, Madhya Pradesh state and NITI Aayog signed a partnership agreement to develop Indore and Bhopal as major economic growth hubs, and further acceleration of growth is expected going forward.
Indore practices innovative waste management as "India's first zero-landfill city." Wet waste is converted into compost or Bio-CNG (biocompressed natural gas), and dry waste is recycled into granules, diesel, and road construction materials. The Bio-CNG plant processes 550 tons of wet waste per day, producing 17,000 kg of Bio-CNG. This fuels 300 public buses and contributes to an annual reduction of about 10,000 tons of CO2 emissions.
This advanced waste management has a direct bearing on the food industry. The infrastructure that efficiently processes food waste from restaurants makes it easier to comply with FSSAI standards and reduces the cost of food safety management. The sanitation concerns that Japanese food companies typically worry about when operating in India are minimized in Indore.
Chappan Dukan (a food street lined with 56 shops) is a landmark symbolizing Indore's food culture. Redeveloped in 2020 as part of a smart city project, it has evolved into a smart food zone that even has its own radio station. The project was completed in just 45 days and has drawn nationwide attention as a successful case of merging urban development with food culture.
Sarafa Bazaar is a jewelry market by day, but every night from 9 p.m. to 2 a.m., stalls line up in front of the shuttered jewelry shops, transforming it into Indore's largest night food market. It is a place where vegetarian street food from the Gujarat, Rajasthan, Malwa, and Maratha regions all comes together, offering a wide variety of local dishes such as poha (flattened rice snack), samosas, kachori, and jalebi.
This "night economy" culture carries important implications for the food business. Indore's consumers regard eating itself as entertainment and are open to new taste experiences. The fact that late-night consumption behavior has taken root means that when Japanese companies roll out products in the street food or snack category, there is a sales opportunity in a consumption scene different from the usual.
The most important part of Indore’s manufacturing sector is the namkeen (Indian snack) industry. Registered businesses in the organized cluster have sales of about 420 crore rupees (about 7.1 billion yen), making it one of the country’s notable concentrations of namkeen production. India’s savoury snack market as a whole runs to trillions of rupees, though, so a claim like "a third of national output" applies only to a partial count of the organized segment. The national brands are based elsewhere — Haldiram’s in Nagpur, Bikaji in Bikaner, Bikanervala in Delhi — and what makes up the Indore cluster is several hundred small and mid-sized local manufacturers.
This concentration of the snack industry has two implications for Japanese companies. First, Indore has abundant infrastructure and know-how related to snack food manufacturing, packaging, and distribution. It is an environment where it is easy to find an OEM (contract manufacturing) partner, making it possible to manufacture snack products for the Indian market without building one's own factory. Second, a consumer base deeply rooted in snack culture provides a market environment well suited to test-marketing Japanese snacks (such as senbei, okaki, and kaki no tane) adapted for the Indian market.
Indore has been selected as one of the first 20 cities under the Smart Cities Mission, and urban digitalization and infrastructure development are underway. Smart city initiatives related to the food industry include a Healthy Street Policy, a CCTV surveillance policy, IT integration into urban infrastructure, and restoration of cultural and economic heritage.
Sanitation management of restaurants is maintained at the highest level nationwide through strict administrative oversight. Sorted collection of food waste, store cleanliness standards, and hygiene education for food handling staff are systematically implemented, and FSSAI standards compliance rates also rank among the highest of any city in India. This sanitation advantage has a high affinity with the quality control standards Japanese food companies emphasize, and is a factor that greatly reduces operational risk compared with other Indian cities.
The lowest-barrier strategy is to leverage Indore's namkeen industry ecosystem and commission OEM manufacturing of Japanese snacks and instant foods. A division-of-labor model in which flavor development for the Indian market is done jointly with a local Indore partner, while Japan leads on manufacturing technology and quality control, is effective. localization is what makes spicy Japanese-style snacks a fresh experience for Indore consumers.
Indore has an extremely strong vegetarian food culture. Products that fuse Japanese elements into traditional vegetarian street food such as poha and kachori — matcha-flavored jalebi, miso-flavored poha mix, or wasabi kachori, for example — are a promising strategy that respects local culture while offering a new taste experience.
Indore's brand image as "India's cleanest city" provides a powerful context for selling health-conscious food. The story of health food manufactured in a clean environment can also be leveraged in branding when expanding nationwide from Indore. Positioning Japanese fermented foods (miso, amazake, and pickles) as "health food from Indore" can create a synergy with the clean-city image.
Rather than major cities like Delhi, Mumbai, Bengaluru, Indore is an ideal place to build a market entry model for Tier 2 cities. A success story in Indore can serve as a template for horizontal expansion into other Tier 2 cities such as Bhopal, Jaipur, and Lucknow, offering a valuable case study for testing a strategy of "capturing the Indian market without relying on major cities."
Indore is an inland city in central India, about 800 km from Delhi and about 600 km from Mumbai. Devi Ahilyabai Holkar Airport operates direct flights to Delhi, Mumbai, and Bengaluru, so air access is assured. However, since it is not a port city, the cost and time of inland logistics must be considered when sourcing imported raw materials.
Madhya Pradesh is steadily building out its food processing infrastructure, and the state government is actively courting manufacturers. Cumulative FDI inflows from October 2019 through June 2025 reached 4,760 crore rupees (Rs 47.6 billion rupees, approximately 550 million dollars), and the investment environment is on an improving trend.
Indore's food industry is expected to continue growing, built on three strengths: its brand power as a clean city, the rising international recognition of its street food culture, and the concentration of its namkeen industry. If the vision of becoming an economic growth hub through partnership with NITI Aayog is realized, investment in the food processing industry is likely to accelerate further.
For Japanese food companies, Indore is also an ideal place to learn about the essence of Indian food. The vitality of its street food culture, the depth of its vegetarian cuisine, and its dedication to cleanliness are values it shares with Japanese food culture. Business development that leverages this cultural affinity will likely become the foundation for success in the India market over the long term.
It is the largest commercial city in Madhya Pradesh and has repeatedly been named India's "cleanest city" in national surveys. With a rich food culture epitomized by Sarafa Bazaar, it is a core central Indian city where the restaurant and snack industries thrive.
Interest in food runs high, from street food to dining out, and consumption of snacks, sweets, and processed foods is brisk. The cost of living is lower than in major metros, and the growing purchasing power of the middle class also makes it an attractive foundation for a food business.
It suits central Indian expansion in food, snacks, dining, and consumer goods. Backed by its cleanliness and food culture, it is a city that can be used as a test and rollout location for restaurant chains and processed foods.
Separate from full-scale rollout in major metros, Indore is positioned as a base for the central Indian (Madhya Pradesh) market. As part of a Tier 2 city strategy, it is worth considering alongside growing Tier 2 cities for an effective approach.
Market size is smaller than in major metros, and infrastructure such as modern trade and cold chains is still being built out. Since many consumers are price-sensitive, product design tailored to local tastes and price points is essential.
It is realistic to define the customer segment and products you're targeting in central India and start with a small-scale test through restaurant and retail channels. Based on the region's food culture and price points, you then expand to surrounding cities as you gauge the response.
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