This paper examines the change in the nature of food demand in India in the last twenty years. It identifies two distinct stages of diet transition associated with the period of economic growth. During the first stage, income-induced diet diversification, consumers move away from inferior goods to superior foods and substitute some traditional staples, especially rice. In the second stage, diet globalisation, the influences of globalisation are much more marked with increased consumption of proteins, sugars and fats. Diet diversification has marked the process of transformation in food production systems. The implications for small and marginal farmers could be serious, unless there are incentives and policies that allow them to move away from subsistence agriculture and become more integrated in the global food market.