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Market Reports

Dairy Industry in India

1

Indian Dairy Sector: Quick Facts

2

Dairy Sector: Value Chain

3

Milk Production Overview of India

4

Overview: Dairy Sector in India

5

India’s Dairy Industry flows

6

Government & Milk Producer Initiatives

Indian Dairy Sector: Quick Facts

India is the world's largest milk producer
24% contribution to global milk production
India’s milk processing capacity is 126 million liters per day
For a decade, country’s milk industry has been growing at a CAGR of 5.8%
Milk production in India registered more than 50% increase during the last ten years
Globally, India exported 67,572 million tons of dairy products during the year 2022-2023
80 million people are employed in the dairy sector
The industry contributes 5% to the national economy
Per capita availability of milk is 459 grams per day
In 2022-2023, India's Butter, Ghee, and Dairy Spreads export stood at 8,106 MT
Major export destinations for milk products are Saudi Arabia, UAE, Malaysia, and Bangladesh
Milk production from buffaloes increased by 3.7% in 2023 as compared to the previous year
Top 5 milk producing states together contribute around 53% of total milk production in the country
India exported 9,262 MT of Cheese to the world. Major destinations are UAE, USA, Bhutan, Singapore, and Saudi Arab during the year 2022-2023

Dairy Sector: Value Chain

Inputs

  • Milch Animals
  • Cattle Feed
  • Dairy Feed
  • Fodder
  • Milking Technology

Aggregation

  • Collection Agents
  • Chillers
  • Firms
  • Milk Traders
  • Other Traders

Primary & Secondary Processing

  • Pasteurization
  • Packaging
  • Value added products
    • Toned Milk
    • Standard Milk

Distribution

  • Private Dairy
  • Dairy Cooperatives
  • Firms

Retailing & Export

  • E-commerce
  • Convenience Stores
  • Supermarkets
  • Department Stores
  • Export Houses

Milk Production Overview of India (in ‘000 tons)

States

2018-19

2022-23

Growth %

(2018-19 Vs 2022-23)

Uttar Pradesh

30,519

36,242

18.8%

Rajasthan

23,668

33,307

40.7%

Madhya Pradesh

15,911

20,122

26.5%

Gujarat

14,493

17,281

19.2%

Andhra Pradesh

15,044

15,448

2.7%

Maharashtra

11,655

15,042

29.1%

Punjab

12,599

14,301

13.5%

Karnataka

7,901

12,829

62.4%

Bihar

9,818

12,503

27.3%

Haryana

10,726

11,966

11.6%

Tamil Nadu

8,362

10,317

23.4%

West Bengal

5,607

6,969

24.3%

Telangana

5,416

5,855

8.1%

Others

16,030

18,395

14.8%

Total Production

1,87,749

2,30,577

22.8%

Overview: Dairy Sector in India

Overview Dairy Sector in India
  • Top 5 milk producing States are Uttar Pradesh, Rajasthan, Madhya Pradesh, Gujarat, and Andhra Pradesh. They together contribute around 53% of total milk production in the country.
  • The average yield per animal per day for exotic/crossbred is 8.55 Kg/day/Animal and for indigenous/non-descript is 3.44 Kg/day/Animal.
  • Milk production from exotic/crossbred cattle has increased by 3.75% and indigenous/ non-descript cattle has increased by 2.63% as compared to the previous year.
  • Top 13 states together contribute around 92% of total milk production in the country
  • India produced close to 50% more milk than the US and more than three times as much as China.

Growth Drivers:

  • Shifting Dietary Preferences
  • Government Initiatives/Schemes
  • Increasing Health Consciousness
  • Rising Foreign Direct Investment (FDI)
  • Cold Chain Infrastructure Development
  • Technological Advancement in Milk Processing

Key Facts:

  • The Indian Government has set the goal to double India’s processing capacity up to 108 MMT by 2025. The Government also aims to increase India’s export share in the world from 0.36% to 10% by the end of 2025
  • Out of total dairy production, 65% of the milk is sold in liquid form
  • The value-added products such as ghee (clarified butter) and yogurt account for 8% of the dairy sector each
  • Baby food (milk-based) accounts for 5% of the dairy sector
  • Market for ice cream accounts for 4% of the dairy market
  • Butter, cream, cheese (including paneer), and dairy whitener collectively account for 10% of the Indian dairy sector
Overview Dairy Sector in India

India’s Dairy Industry Flow

  • The Indian dairy sector is divided into the organized and unorganized segments:
    • Unorganized segment consists of traditional milkmen, vendors, and self-consumption at home
    • Organized segment consists of cooperatives and private dairies
  • Indian dairy sector is dominated by an unorganized sector, selling 64% of the marketable surplus
  • Around 36% of the marketable milk is processed by the organized sector, with cooperatives & Government dairies, and private players contributing 50% each
  • Amul, the brand of Gujarat Coop Milk Marketing Federation (GCMMF) is the largest dairy co-operative and the largest organized player in India
  • It is the 9th largest dairy player in the world. It aims to be amongst the top 3 dairy players in the world. Amul plans to add 40-60 value-added products in the next 2 years.
India Dairy Industry Flow

Government & Milk Producers Initiatives

  • Government of India set up a 15,000 Cr fund for offering financial support to set up new units or expand existing units in areas of dairy processing & related value addition infrastructure, meat processing & related value addition infrastructure, and Animal Feed Plant. The benefits available are:
    • 3% interest subvention on loans
    • 2-year moratorium with 6-year repayment period
    • INR 750 Cr credit guarantee
  • The Rashtriya Gokul Mission has been extended till 2026 with INR 2,400 Cr commitment to boost productivity and milk output, making dairying more profitable for farmers.
    • 50% Capital subsidy up to INR 2 Cr to eligible entrepreneurs, individuals, FPOs / FCOs, SHGs, JLGs, and Section 8 companies for the establishment of breed multiplication farms
    • Accelerated breed improvement program under the component subsidy of INR 5,000 for IVF pregnancy
  • National Program for Dairy Development (NPDD) scheme aims to enhance the quality of milk and milk products and increase the share of organized milk procurement, processing, value addition, and marketing. The scheme has two components:
    • Component ‘A’ focuses on creating/strengthening infrastructure for quality milk testing equipment as well as primary chilling facilities for State Cooperative Dairy Federations/ District Cooperative Milk Producers’ Union/SHG-run private dairy/Milk Producer Companies/Farmer Producer Organizations. The scheme will be implemented across the country for the period of five years from 2021-22 to 2025-26.
    • Component ‘B’ (Dairying Through Cooperatives) provides financial assistance from the Japan International Cooperation Agency (JICA) as per the project agreement already signed with them. It is an externally aided project, envisaged to be implemented during the period from 2021-22 to 2025-26 on a pilot basis in Uttar Pradesh and Bihar
  • In September 2023, AMUL had opened its 85th branch in Kutch, Gujarat. This new branch ensures the distribution of the entire range of Amul’s dairy products
  • In March 2024, Mother Dairy announced that it will invest INR 650 crore to set up two new plants for the processing of milk. The company will also invest INR 100 crore to expand the capacities
  • In December 2023, Karnataka Milk Federation (KMF) announced that the Company will start buffalo milk sales from December 21 in the country

 

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