Being the largest producer of milk in the world and contributing 24% of global milk production, India’s dairy sector has made a remarkable journey from a milk deficit nation dependent on imports to exporting more than $391 million worth of dairy products last year
Milk and dairy products have been part of Indian society’s diet for centuries. Today, it boasts of having the highest milk processing capacity as about 126 million liters of milk is processed every day.
 
Ranking first in the milk production, its share in the global milk production is 24%--the highest in the world. In 2023-24, the dairy sector is expected to register more than 6% growth, as per data from the Ministry of Animal Husbandry and Dairying.
 
By the year 2033-34, India aims for 33% share in the global milk production and all this, it wants to achieve by producing about 330 MMT milk every year.
 
According to the Ministry of Animal Husbandry and Dairying, dairy is the single largest agricultural commodity that contributes 5% to India’s GDP and employs more than 80 million farmers directly.
 
In India, dairy products recorded a growth of 19.45% as its export rose to $471 million in April- December 2022 from $395 million in corresponding months of 2021, data released by the Directorate General of Commercial Intelligence and Statistics (DGCI&S) said.
 
Market size of dairy products
 
In India, the top five milk-producing states are: Rajasthan (15.05%), Uttar Pradesh (14.93%), Madhya Pradesh (8.06%), Gujarat (7.56%) and Andhra Pradesh (6.97%).
 
While daily milk consumption in India stood at 107 grams per person in 1970, it has increased to 427 grams per person today—more than the world average of 300 grams per person.
 
Over the last eight years, milk production in the country has been growing at the annual growth rate (CAGR) of 6.1% and in the coming days, it is expected to register more than 6% growth.
 
The dairy market in India was worth $202.9 billion in 2022. According to IMARC Group, the market is expected to grow to $424.7 billion by 2028, with a compound annual growth rate (CAGR) of 13.2% from 2023 to 2028.
 
Some of the biggest dairy companies expected to spearhead the growth include Amul, which generated $6.5 billion in revenues in 2022, and Mother Dairy, which generated $1.6 billion in 2020.
 
Parag Milk Foods, Schreiber Dynamix Dairies, and The Kerala Cooperative Milk Marketing Federation are other top dairy companies in the country.
 
Startups in dairy sector
 
Startups are playing a vital role in the dairy sector in India. For example, Country Delight, a startup which was launched in 2015, offers direct-to-home supply of milk and products like ghee, paneer, and curd to people.
 
Based in Gurgaon, it offers a user-friendly mobile app to make its delivery mechanism easy and smooth. It is now operational in 15 cities across India. The startup sources milk from farms within a 150 and 200-km radius and delivers it to households within 24 to 36 hours.
 
Stellaps, another startup firm launched in 2011, uses Internet of Things, database management, Big Data, and machine learning to digitise the dairy supply chain. Headquartered in Bengaluru, the startup improves milk production, cold chain management, and milk procurement with the help of its platform called SmartMoo.
 
Puresh Daily, a startup that was founded in 2019 in Ranchi, claims to provide cow milk and dairy products free from harmful chemicals. It uses artificial intelligence, Internet of Things and CRM (customer relationship management) software to monitor milk quality. It has more than 1,500 customers.
 
Whyte Farms, launched in 2015, claims to provide milk to over 3,000 households without the help of any external delivery agency. It aims to provide milk that is free from preservatives, adulterants, steroids, and antibiotics. It distributes milk within 8-12 hours of milking cows.
 
Established in 2009, Milk Mantra has been delivering various dairy predictions such as milk, lassi, and curd to markets. Having raised over $25 million over the years, the startup has seen its revenues surging from $2 million in 2013 to $32 million in 2020.
 
Milkbasket is one startup that has found a way to leverage the solid demand for milk to fuel its core business. Therefore, the company can deliver milk and other essential products to customer's doorstep as part of its packages. It has already raised over $40 million.
 
Other startups in the dairy sector include Happy Milk, Milk India, and SRC Farms
 
Use of technology in dairy sector
 
Players in the sector are adopting various technologies to improve the productivity, quality, and profitability of dairy farming.
 
Health tracking devices are increasingly being used to monitor the vital sign activity and behavior of cattle. Robotic milking machines have also come into play to reduce the time and labor required.
 
There are also milk freshness sensors that measure PH level, temperature, and bacterial count of milk. Feed management software is helping calculate the optimal feed ration for each animal.
 
In fact,  the importance of technology in the dairy sector has grown significantly—from milk collection and evaluating the composition of milk to quality assessment. It would not be an exaggeration to say that technology is helping in modernizing and revolutionizing the dairy sector in India.
 
 Automated milking systems are being used by farmers to enhance milking efficiency, increase milk quality and, also in improving the welfare of cows.  
 
Technology is also helping farmers in getting real-time milk production data, monitor cow health, identify potential problems and in making informed decisions.
 
Conclusion
 
India has evolved from being a milk-deficit nation between the 1950s and 1960s to being the largest milk producer in the world.
 
Rural households are increasingly turning to dairy and animal husbandry as a key source of income. This is helping affirm the country’s status as the largest milk-producing nation in the world while also helping improve India’s rural economy.
 
The sector accounts for about 5% of the economy’s output. Over the past three years, dairy products exports have increased significantly.
 
Between 2021 and 2022, the country exported 108,711MT of dairy products worldwide, generating $391.59 million. The country’s key export destinations are Bangladesh, UAE, Bahrain, Malaysia, Saudi Arabia, and Qatar.
 
India’s dairy industry has since emerged as the primary source of income for many rural households, even though most are landless small and marginal farmers.
 
It is one of the biggest employers, employing over 80 million people who are engaged in milk production, processing and selling and marketing milk and dairy products.
 
It has also helped in breaking the shackles of gender discrimination. For instance, women remain the biggest workforce, accounting for 70% of the total population engaged in the dairy sector. They are recognized as a force behind India’s white revolution.
 
***The author usually writes on developmental, financial and market issues; views expressed here are her own