Indian government has set the goal to double its processing capacity from existing 53.5 MMT to 108 MMT by 2025. The government, in its roadmap for 2025 for the dairy sector, aims to increase value-added products from 23% to 40% and India’s exports share in the world from 0.36% to 10%, according to Atul Chaturvedi, Secretary, Department of Animal Husbandry & Dairying, Government of India. He made these observations at a virtual summit on ‘Development of Indian Dairy Sector’ organised by industry body FICCI recently. On the occasion, a paper on the dairy sector was also released. According to the research paper, in India milk production is growing by 6.4% during the last five years and has increased from 146.3 million MT in 2014-15 to 187.7 million MT in 2018-19. However, India exports a relatively smaller volume of dairy products and has a small share in global dairy trade despite being the largest milk producer in the world. Dairy products exported from India are mainly skimmed milk powder (SMP), butter, butter oil, cheese, ghee and butter milk. SMP has a share of around 30% in the exports of the dairy products from the country. The major export destinations for dairy products are Turkey, the United Arab Emirates, Egypt, Bangladesh, Bhutan, the United States, Saudi Arabia and Malaysia. India exported 1,11,146 tonne of dairy products in 2019-20 valued at US$280 million. Of the total milk production in India, about 48% milk is either consumed at the producer level or sold to non-producers in the rural area. The balance 52% of the milk is marketable surplus available for sale to consumers in urban areas. Out of marketable surplus it is estimated that about 40% of the milk sold is handled by the organised sector (16.93 million farmers have been brought under the ambit of about 1,90,516 village-level Dairy Cooperative Societies [DCS]) up to March 2019. The cooperative milk unions collectively procured an average of 507.69 lakh kg of milk per day in 2018-19 as compared to 475.29 lakh kg per day in the previous year, with a growth of about 7%. The sales of liquid milk reached 354.53 lakh litre per day, which is marginally higher than that in 2017-18. Addressing the webinar, Chaturvedi said that the dairy sector was facing a crisis before the onset of the pandemic. However, the industry was able to turn the Covid-19 crisis into an opportunity. There was an improvement in supply of milk substantially by cooperatives and the average liquid milk consumption by cooperatives was higher during the period. He added that the average procurement price of milk also increased, which helped 1.7 crore farmers. He added that Indian dairy is a Rs 10 lakh crore industry with significant growth potential and highlighted the five key investment opportunities for the private sector. It included production and supply of affordable compound cattle feed; enhancing chilling infrastructure by setting up new BMCs; setting up processing infrastructure; enhancing processed milk distribution capacity; and enhancement of D2C milk supply across top consumption hubs. The dairy sector is currently growing at around 10-12% annually. Based on estimates of population growth and increase in urbanisation for the next four decades, it is anticipated that India needs around 600 million tonne of milk per year to fulfil the demand for milk and milk products. This means that India’s milk production needs to grow at around 3.2% CAGR for the next 40 years. However, low production by cattle, shortage of feed and fodder, diminishing grazing land, quality of feed, fluctuation in demand and milk prices, improvement of breed are some of the areas, the paper says, need attention. The paper suggests that the government could consider several measures in supporting private dairy players by including provisions of soft loans, moderate interest rate on CAPEX and working capital support, subsidies, incentive and other financial support at par with cooperatives, NDDB’s operations should work for the development of entire dairy sector including private players, rather than only the cooperative sector. Further, the government needs to reconsider its position like National Cooperative Dairy Federation of India (NCDFI), manages e-marketing portal ( and allows private dairies to buy milk and products but prohibits them from selling their dairy produce on their electronic platform.