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None of us can imagine our lives without dairy. The various dairy goods are an integral part of our days. As times are changing, so are the trends in the dairy industry. A normal person struggles to play catch up. Milk is an integral human food. It is quite tasty, gives us strength and can be digested very easily. You may think that the volume of milk produced affects its demand, but it is actually the other way round. How and how much milk is produced, actually depends upon its demand, and that of various related products, at any given moment.

The plain old milk is still needed, but it is not exactly preferred. Various other milk based dairy products are the ones capturing markets worldwide. Much like milk, even these products have made an important place for themselves in our lives. The various types of milk products include ghee, paneer, butter, curd, baby food, cream and so much more. As all of these products are basically made out of milk, they all have its affirming qualities. Each one of them makes our daily meals tastier and is also incredibly good for our health. Similar to the love of a mother, the milk produced by mammals is also pure and nutritious. Hence, all these products are doctor recommended. They help us in renewing our energies. Of course, it is not just the milk.

Many milk based products need to be mixed with certain enzymes to give them a different texture and make up. Cheese and the enzymes used as it raw material are the best examples. When it comes to India, the dairy industry is magnificently flourishing out here. If you are an entrepreneur of milk or milk based products in India, the opportunities are practically licking your feet. You get to capitalize on the largest and fastest growing milk and milk products market of the world. The possibilities are endless. As the demographics of our country are changing, so are the needs of the people. The tastes and preferences are varied and wide. Most companies in almost every industry are playing hard to retain its consumers. Fortunately, the demand for dairy can never be out. We shall always need milk. All an entrepreneur really needs, is to think out of the box and do all kinds of crazy things with the existing dairy products. Nothing attracts a customer like a brand new flavor of milk, ice cream of even yogurt.

The overall trade picture of our country has considerably changed since the 90s and is still evolving. Things have become much more liberalized and we are open to the foreign business. One thing that can be improved upon is the technical infrastructure and know how needed to produce the dairy products. We need to bring in some more innovation in this area, in order to make our dairy segment an even bigger hit. If some new machinery and manufacturing methods can be brought it, the entire picture of the dairy industry might change for the better.

Dairy industry is working intensely to make improvements

Despite the general economic difficulties, the dairy industry is grappling with, the year promises to be exciting. This is primarily because many dairies and creameries face other challenges. For example, consumers are becoming increasingly concerned about animal welfare. Milk producers and milk processors recognized this trend early on and have been working intensely to make improvements such as ensuring more grazing and less tie-stall housing.

And they’ve already achieved a lot. But the danger remains that politicians won’t find the current pace of implementing changes fast enough, and they will demand too much at once. The fact that individual creameries have already banned their farmers from using glyphosate in anticipation of possible legal regulations speaks volumes. While farmers can implement this ban relatively easily (although not without incurring financial losses), a ban on tie-stall housing would not be so quick and easy to implement.

The “National Dairy Programme (Phase-I)” aims to improve cattle productivity and increase the production of milk

Along with offering profitable business opportunities, the dairy industry in India serves as a tool of socio-economic development. Keeping this in view, the Government of India has introduced various schemes and initiatives aimed at the development of the dairy sector in the country. For instance, the “National Dairy Programme (Phase-I)” aims to improve cattle productivity and increase the production of milk expanding and strengthening and expanding the rural milk procurement infrastructure and provide greater market access to the farmers. On the other hand, the private participation in the Indian dairy sector has also increased over the past few years. Both national and international players are entering the dairy industry, attracted by the size and potential of the Indian market. The focus is being given to value-added products such as cheese, yogurt, probiotic drinks, etc. They are also introducing innovative products keeping in mind the specific requirements of the Indian consumers. These players are also improving their milk procurement network which is further facilitating the development of the dairy industry in India. Looking forward, the market is expected to reach a value of INR 18,599 Billion by 2023, exhibiting a CAGR of around 15% during 2018-2023.

dairy industry india report 2018

Future scope of dairy industry:

India derives nearly 33% of the gross Domestic population from agriculture and has 66% of economically active population, engaged in agriculture. The share of livestock product is estimated at 21% of total agriculture sector. The fact that dairying could play a more constructive role in promoting rural welfare and reducing poverty is increasingly being recognized.

Indian milk production is likely to reach 190 million tons by 2016 and the annual turnover is Rs.5 Lakh Cr. The planning commission is targeting 4.5 to 5% growth for Animal husbandry in the next 12th plan and the World Bank funded 1584 cr National Dairy plan is in few months the sector is expected to witness a healthy growth in the coming years, by projecting with 17,300 cr National Dairy Plan by NDDB in the next 15 years, in First phase with 2000 cr investment to be launched soon.

Encourage commercial dairying by way of policy interventions such as Agriculture Status, Concessions in Electricity tariff & providing feed ingredients on discounted prices etc.

Terroring Indian Dairy Quality Situation

As per the FSSAI sample survey 68-70% of the milk is found adulterated, which is not safe for the human consumption and further product conversion and export, there is mass use heavy liquid consumption.

Factors influence on quality production:

Food safety:

  1. Lack of quality medicines no regulatory framework for medicine quality
  2. Adulteration milk (dirty water, sugar, salt, detergents, urea, vegetables and mineral oils,, foreign fat, skim milk powder, preservatives, formalin , H2.O2 )
  3. High bacteria count, spread of unknown diseases, and shelf life product


  1. As much as 25-30% of milk is lost/ spoilage before it reaches to consumers
  2. Not all milk can be sold (evening milk, flush season excess milk)
  3. Lack of cooling spoils milk before it is consumed or processed
  4. Middle man role in malpractices

Demand drives and growth environment:

India rural liveliness

  1. Largest milk producer communities
  2. Fast growing economy, consumer preference for hygiene and fresh milk
  3. Annual highest milk production growth
  4. Emerging competent regulatory system and authority
  5. New Food safety and standard law
  6. Trained S &T human resource
  7. Research and Educational Institutes (NDRI, NDDB, CFTRI)
  8. Strong successful cooperative movement’, in particular parts of India

India drawbacks

  1. Low milk productivity animals
  2. Poor veterinary services
  3. Lack of data on dairy sector
  4. Weak organised retailing and established cold chain
  5. Large unorganized market sector @ 80%
  6. Poor raw milk quality Lack of Good dairy practices
  7. Weak financial & policy support for industry
  8. Low dairy plants efficiency
  9. Inappropriate milk collection system

India future prospects

  1. Large rural market gap
  2. Increasing quantity of available milk for processing
  3. Fast growing economy
  4. Diversification
  5. Large market and investment opportunity
  6. Increasing income of consumers,
  7. Changing life style and preference for milk and milk products, more number of adult consumers, untapped indigenous milk products market and exports.
  8. Low cost human resource and employment generation.

India need to immediate focus

  1. Food safety
  2. Unhygienic practices by farmers at farm
  3. Uncontrolled use of antibiotics and
  4. medicines on milch animals
  5. Unfriendly WTO regime and
  6. Imports from other countries
  7. Drought and flood

Production and market share

  1. Informal production – 97 %
  2. Formal production – 3%
  3. House hold consumption – 45 %
  4. Rural and urban consumption – 55 %
  5. Urban unpackaged milk – 35.5 %
  6. Processed milk informal urban markets – 40 %
  7. Packaged milk formal markets – 14.5 %
  8. Packaged milk products formal markets – 12.7%

Need focus for improvement

  1. Strengthen economic viability of dairy farms by interventions on the input side as well as ensuring more fair farmer prices and practices
  2. Low productivity and scattered production leading to high cost of transportation
  3. Increase the link between rural production areas and urban markets
  4. Focus on strengthening the indigenous breed to help significantly enhance productivity
  5. Support to dairying as an enterprise to encourage commercial dairy farming and encourage production and productivity by extension and breed development
  6. Strengthen dairy farmer cooperatives to enable farmers to get a higher price for milk
  7. Create rational export policy to enable farmers to take advantage of higher prices
  8. Strictly implement quality regulations and improve infrastructure and training for quality
  9. Focus on quality issues that are a barrier to exports
  10. Encourage private sector to increase investment in dairying
  11. Support expansion of dairy farmer organizations
  12. Increase milk prices in accordance with feed prices

Extending scope for commercial / corporate Dairy Farming in India:

One of the emerging today trend in Indian is dairying is the growing number of the commercial dairy farms in the urban and peri-urban areas of the metros and big cities. These dairies mainly cater to the needs of the urban consumers.

In this junction there is urgent need for organized & modernized dairy farming. Commercial dairy farming is much different from villagers who rear few cows. Later does not employ labor, cultivates most of the green fodder needs on his own land with own labor, does not have to pay bank interest and above all invest too low in infrastructure facilities.

Though a profitable business venture dairy farming in India requires hard work, proper planning and active and very alerts for managers and supervisors. We all have heard many success stories in dairy farming. In today’s technological world there have been many advances in modern dairy farming. Everything from feed for dairy cows to milk processing equipment has added tremendous scope to the dairy farming industry.

Commercial and small scale dairy farming in India is no doubt playing an important role in the total milk production and economy of our country. And almost all regions of India are suitable for setting up dairy farming business. Most of the dairy farmers in India are raising animals in small scale traditional methods. They are not aware about the modern farming methods and improved techniques for dairy farming. As a result, some farmers are losing their investment instead of being benefited. Proper business plan, well management and care can ensure maximum production and profit from dairy farming business.

The best approach is to create and run a sustainable dairy farm that gives maximum profits to the firm and also takes care of the effects of dairy farms on environments and animals for a longer period.