Dairy Industry in India - UJA Market Report

  •  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, the 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


Overview: Dairy Sector in India

  • The 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 have increased by 2.63% as compared to the previous year.
  • The top13 states together contribute around 92% of total milk production in the country
  • India produced nearly 50% more milk than the US and more than three times as much as China.
  • The top5 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 have increased by 2.63% as compared to the previous year.
  • The top13 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.

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.

Government & Milk Producers Initiatives

The governmentof 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 Plants. 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 an The 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 would 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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