India Dairy Market Size, Share and Growth Analysis Report - Forecast Trends and Outlook (2024-2032)

India Dairy Market Outlook

• India is the world's largest dairy market in terms of milk production. In the 2022-23 period, India produced approximately 230.58 million tonnes of milk.

• Gujarat Co-operative Milk Marketing Federation Ltd (GCMMF), Karnataka Co-operative Milk Producers Federation Limited (KMF), and Orissa State Cooperative Milk Producers Federation Ltd (OMFED) are some of the major companies in the India dairy market.

• In 2022-23, the leading milk-producing states were Uttar Pradesh (15.44%), Rajasthan (14.44%), Madhya Pradesh (8.6%), Gujarat (7.49%), and Andhra Pradesh (6.70%), collectively accounting for 53.08% of the nation's milk output.

India Dairy Market Growth

India’s milk output increased by 3.83% in 2022-23, with a per-capita availability of 459 grams per day. The average daily yield per animal is 8.55 kg for exotic/crossbred cattle and 3.44 kg for indigenous/non-descript cattle. Milk production rose by 3.75% for exotic/crossbred cattle, 2.63% for indigenous/non-descript cattle, and 3.69% for buffaloes compared to 2021-22, according to the DAHD, Government of India.

Some of the factors driving the India dairy market growth are the strong government support and the growing demand for milk and dairy products due to their cultural significance. Government funds like the Dairy Processing and Infrastructure Development Fund, and Animal Husbandry Infrastructure Development Fund (AHIDF) help farmers increase their milk processing capacity.

Figure: Milk Production in India (in Metric Tonnes), 2018-2023

India Dairy Industry Outlook

According to International Monetary Fund (IMF), in 2023, India's per capita income was USD 2,600 per annum. The International Monetary Fund (IMF) forecasts that this figure will rise to approximately USD 4,000 by 2028. This increase in income levels is anticipated to result in the addition of around 14 crore middle-income households and 2.1 crore high-income households in India by 2030. Additionally, the proportion of middle-income households is expected to grow from 54% in 2018 to 78% by 2030. According to the Investec Report, the rise in income levels is likely to lead to higher disposable incomes, driving consumer preference for premium and nutritious food products such as milk and milk products.

According to Invest India, the primary regions for dairy product production in India are Uttar Pradesh, Maharashtra, Madhya Pradesh, Punjab, and Rajasthan. Rajasthan is the top producer with 15.05% of the total milk production, followed closely by Uttar Pradesh at 14.93%. Other significant contributors include Madhya Pradesh (8.60%), Gujarat (7.56%), Andhra Pradesh (6.97%), Maharashtra (6.47%), Punjab (6.37%), Karnataka (5.34%), Bihar (5.48%), and Haryana (5.26%).

The presence of favourable government initiatives such as the Rashtriya Gokul Mission, National Programme for Dairy Development (NPDD), and the Dairy Entrepreneurship Development Scheme (DEDS) is significantly supporting the dairy market growth in India.

Dairy Industry Statistics in India

India contributes over 25% of the global dairy output and is a top milk producer. The increased milk consumption in the region supports the regional market expansion.

According to India Brand Equity Foundation, milk production in India was 187.75 million tonnes in 2018-19. The upward trend continued with 198.44 million tonnes in 2019-20 and reached 209.96 million tonnes in 2020-21. This steady increase in milk production highlights India's significant growth in the dairy sector, reflecting improvements in dairy farming practices, livestock management, and the overall dairy infrastructure.

According to the Indian dairy industry analysis, India is a significant exporter of dairy and dairy products on a global scale. According to India Brand Equity Foundation, in the fiscal year 2021-22, India exported 108,711 metric tonnes (MT) of dairy products, generating revenue of INR 2,928.79 crore (USD 391.59 million). Key export destinations included Bangladesh, UAE, Bahrain, Malaysia, Saudi Arabia, and Qatar. Bangladesh is the largest importer with USD 91.45 million, followed by the UAE (USD 58.66 million), Bahrain (USD 28.59 million), Malaysia (USD 25.36 million), and Saudi Arabia (USD 24.88 million). The trend of India’s dairy product exports shows a significant rise from USD 186.71 million in 2019-20 to USD 201.37 million in 2020-21, reaching USD 391.59 million in 2021-22. This upward trend reflects India's growing presence in the global dairy market and the increasing demand for its dairy products.

Recent Developments and Key Trends

May 2024

Amul launched its milk products in the US through a partnership between the Gujarat Cooperative Milk Marketing Federation (GCMMF) and the Michigan Milk Producers Association (MMPA), offering the same range as in India.

March 2024

The Karnataka Co-op. Milk Producers' Federation Limited (KMF) announced an investment of ₹26 crores to set up a new dairy unit in Haveri district, Karnataka. This initiative aims to enhance milk processing capabilities and support the upliftment of regional dairy farmers.

March 2024

Nova Dairy, one of the dairy pioneers in India serving purity, announced the launch of its latest product, A2 Cow Ghee, crafted using the traditional bilona ghee curd churning method from A2 cow milk with its quality and health benefits.

January 2024

The Gujarat Cooperative Milk Marketing Federation (GCMMF) launched Sagar Skimmed Milk across India. This move aims to meet the evolving needs of consumers by offering Sagar Skimmed Milk targeting both the economic segment and health-conscious individuals seeking fat-free milk.

Rising demand for clean-labelled dairy products; the incorporation of dairy products in Indian diets; favourable government initiatives; and technological advancements and innovations are propelling the India dairy market expansion.

Milk and dairy products are an integral part of the Indian diet

Indian households widely consume milk and dairy products due to their rich nutritional profile and protein content. Fortification through milk is widely adopted to nourish children. Desserts, such as kheer and gulab jamun rely, heavily on milk as a primary ingredient and are widely consumed during festivals.

Growing demand for clean-label products in the India dairy market

Clean-label dairy products are gaining popularity due to consumers’ inclination towards a healthy lifestyle. Consumers are increasingly demanding transparency in the manufacturing process, with brands adopting the clean label criteria.

India is the top milk producer globally

During 2014–15 to 2022–23, India’s milk production expanded by 58%, accounting for 230.58 million metric tonnes during 2022–23, which, in contributed to market development during the period. India is also a critical exporter of dairy products, globally. During 2022-23 India exported milk and milk products worth INR 3.36 thousand crores, retaining its position as a net exporter of dairy commodities.

Advances in milk production to increase the India dairy market value

The rapid adoption of advanced technologies, such as sensors, data analytics, and digital technology are helping dairy companies make profitable and data-driven decisions. The adoption of automated milking systems and the application of artificial intelligence and machine learning for enhanced farm management are further aiding the India dairy market development.

Growing government initiatives

Government funds like the Dairy Processing and Infrastructure Development Fund help companies upgrade their milk processing and chilling plants while the Animal Husbandry Infrastructure Development Fund (AHIDF) helps farmers increase their milk processing capacity. Further, governmental organisations, such as the NDDB, support the development of marketing competencies, expanding the consumer base for dairy cooperatives.

India Dairy Market Trends

In 2022-23, India’s per capita milk availability soared to an astounding 459 grammes per day, surpassing the world average of 322 grammes per day. The National Dairy Development Board (NDDB), a Government of India initiative, is one of the implementing agencies of the Dairy Processing & Infrastructure Development Fund (DIDF), which has an implementation period of 2018–19 to 2022–23. Eleven projects that raised the processing capacity of milk by 63.7 lakh litres per day were completed as of March 2023.

Furthermore, technological advancements are expected to further improve the overall efficiency of dairy production in India. Example of ew-age technologies include IoT, AI, and advanced analytics, which are being adopted in the country to ensure optimal milk quality, reduce wastage, digitise operations, and improve last-mile logistics.

What Factors Drive the Success of the Dairy Market in India?

• India is the largest producer of milk globally, with a diverse range of dairy products.

• High consumption of dairy-based products in both urban and rural areas.

• Increasing dairy product exports to countries like Bangladesh, UAE, Bahrain, and Malaysia.

• Various government initiatives and subsidies supporting dairy farming and production bolster the Indian dairy demand growth.

What are the Key Challenges Impacting the India Dairy Market?

• Inconsistent quality standards, particularly in the unorganized sector can negatively impact the India dairy market revenue.

• Inadequate cold chain and logistics infrastructure leading to spoilage and wastage.

• Despite high production, per capita consumption remains relatively low.

• Significant presence of small-scale and unorganized players.

What are the Key Trends in the India Dairy Market Landscape?

• Increasing disposable incomes leading to higher demand for premium dairy products.

• Growing consumer preference for nutritious and organic dairy products.

• Adoption of advanced dairy farming techniques and processing technologies.

• Increased use of dairy products in fast food items like cheese, butter, and milk-based beverages.

What are the Threats Faced by Dairy Manufacturers in India?

• High competition from both domestic and international dairy brands.

• Stringent food safety and quality regulations could increase operational costs.

• Vulnerability to climate change affecting milk production and livestock health.

• Economic downturns impacting consumer spending on non-essential dairy products.

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India Dairy Industry Segmentation

“India Dairy Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Product:

• Liquid Milk 

• UHT Milk 

• A2 Milk 

• Organic Milk 

• Flavoured Milk 

• Curd 

• Lassi 

• Butter Milk (Chach) 

• Flavoured and Frozen Yoghurts 

• Cheese 

• Probiotic Dairy Products 

• Butter 

• Ghee 

• Paneer 

• Khoya 

• Dairy Whitener 

• Skimmed Milk Powder 

• Ice-Cream 

• Dairy Sweets 

• Cream 

• Milk Shake 

• Sweet Condensed Milk 

• Others

Market Breakup by Sales Channel:

• Direct Selling 

• Convenience Stores 

• Supermarkets and Hypermarkets 

• Online

Market Breakup by Region:

• North India

• East and Central India 

• West India 

• South India

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India Dairy Market Share

Liquid milk dominates the market share due to its diverse household applications

In India, most of the processed liquid milk sold is produced by dairy cooperatives. 170 cooperative unions representing milk producers process and sell milk. Cooperatives such as Amul (Gujarat), Vijaya (Andhra Pradesh), Saras (Rajasthan), Nandini (Karnataka), Milma (Kerala), and Gokul (Kolhapur) have developed several brands over the years.

UHT milk segment is expected to hold a significant dairy market share in India due to the growing demand for lactose-free milk in cafes, bars, and restaurants. Several prominent brands dominate this market, offering a variety of UHT milk options to cater to different consumer needs. Some popular UHT milk brands include Amul Taaza Homogenised, Mother Dairy's UHT milk, and Nestle Pure Life, among others.

Ghee or clarified butter is considered an integral part of Indian cuisine. In India, about 60-70% of the total ghee produced is used for direct dressing, and about 15-20% for the cooking, frying, and sauteing of foods. The increasing awareness of the health benefits of ghee is increasing its consumption.

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India Dairy Market Competitive Landscape

Prominent dairy cooperatives in the India dairy market are as follows:

Gujarat Co-operative Milk Marketing Federation Ltd (GCMMF)

Headquartered in India and founded in 1973, Gujarat Co-operative Milk Marketing Federation Ltd (GCMMF), commonly called AMUL, is India’s largest producer of milk and milk products. The company offers a wide range of dairy products under the ‘AMUL’ and ‘SAGAR’ brands; products including butter, milk, bread spreads, cheese, paneer, dahi, and others.

Karnataka Cooperative Milk Producers' Federation Limited (KMF)

Headquartered in India and founded in 1974, Karnataka Cooperative Milk Producers' Federation Limited (KMF) is the leading organisation for the dairy cooperative movement in Karnataka. The company offers a wide range of dairy products under the brand name ‘NANDINI’. Its product portfolio includes milk, UHT milk, flexipack milk, curds and other fermented products, including ghee, butter, cheese, and paneer, among others.

Orissa State Cooperative Milk Producers Federation Ltd (OMFED)

Headquartered in India and founded in 1980, Orissa State Cooperative Milk Producers Federation Ltd (OMFED) focuses on promoting, producing, procuring, processing, and marketing milk and milk products, aiming to enhance the economic development of the rural farming community in Orissa. The company offers a wide range of milk and milk products, including milk, curd and other fermented products, ghee and butter, ice cream and frozen desserts, milk sweets, and others.

Maharashtra Rajya Sahakari Dudh Mahasangh Maryadit

Headquartered in India and founded in 1967, Maharashtra Rajya Sahakari Dudh Mahasangh Maryadit serves as the apex federation of district and taluka milk unions in Maharashtra. The cooperative operates all across Maharashtra with its units in Goregaon, Pune, Varvand, Latur, and Nagpur. The cooperative offers products, including Annapurna milk, toned milk, double-toned milk, standardised milk, high-fat milk, chass, and other dairy products.

The private companies in the India dairy market are:

• Mother Dairy Fruit & Vegetable Pvt. Ltd.

• Britannia Industries Limited

• Nestle India Limited

• VRS Foods Limited

• Parag Milk Foods Limited

• Sterling Agro Industries Ltd.

• Kwality Limited

• KSE Limited

What Major Factors are Influencing the Competitive Landscape of the Indian Dairy Industry?

• Competitive pricing attracts a wide range of consumers, particularly in price-sensitive rural areas.

• Efficient and extensive distribution channels to ensure product availability across urban and rural regions.

• Strong brand identity and reputation can significantly influence consumer preference and loyalty.

• Adherence to high quality and safety standards to ensure consumer trust and product reliability will likely positively impact the Indian dairy demand forecast.

• Diversified product portfolio catering to different consumer tastes and preferences, including traditional dairy products and value-added products like flavored milk, yogurt, and cheese.

• Robust supply chain management to reduce wastage, maintain freshness, and ensure timely delivery of products.

• Effective marketing strategies, including digital campaigns, social media engagement, and traditional advertising to reach a broad audience.

• Use of advanced technologies in dairy farming, production, and processing improves efficiency and product quality, which is expected to support the India dairy market dynamics and trends. 

• Excellent customer service to build strong relationships with consumers and retailers.

• Compliance with national and international food safety and quality regulations to avoid legal issues and ensure product safety.

• Forming alliances with suppliers, retailers, and other stakeholders to enhance market presence and capabilities.

• Adoption of innovative and convenient packaging solutions, to enhance product appeal and shelf life, is expected to drive the growth of the India dairy market. 

• Implementation of sustainable practices in production and packaging to appeal to environmentally conscious consumers and reduce environmental impact.

• Understanding and responding to consumer preferences and trends through market 

• Capitalizing on the growing demand for healthy and nutritious dairy products, including organic and low-fat options.

India Dairy Market Regional Insight

North India is a prominent region due to the presence of milk-producing states such as Uttar Pradesh, Haryana, and Punjab.

Uttar Pradesh's bovine population, standing at 67.8 million, represents 16% of India's total. Despite a national decline, UP's livestock population has grown, yet half are low yielders, as per the 20th Livestock Census 2019. Uttarakhand's 4.42 million livestock include 50% local cows, 17% crossbreeds, and 33% buffaloes, with five districts housing half the in-milk bovine. Haryana and Punjab report 6.93 million and 6.99 million livestock, respectively.

 
In West India, Rajasthan (15.05%), Gujarat (7.56%) and Maharashtra (6.47%) are amongst the leading milk-producing states in the country from the region in 2022-23. Gujarat is home to around 18 domesticated animal breeds out of India's total of 137, which can present India dairy market opportunities.

In East and Central India, Bihar (5.48%) and Madhya Pradesh (8.60%) stand out as leading milk-producing states in India, prominent in the East and Central regions in 2022-23.

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