India is one of the largest producers of dairy in the world, comprising close to 23% of the global production. The country is home to 305.5 million bovine animals producing 220 million tons of total milk in FY 22, growing by around 4.8% in 12 months. This places India ahead of other major milk-producing countries such as China and Brazil. Presently milk consumption in India is growing at a CAGR of 6%, as per the analysis by The India Watch. By 2032, the overall production is slated to reach 330 million tons.
48% of the milk produced in India comes from Cows. The share of Cows in total milk production has increased from 45% in 2012. Water buffaloes comprise close to 49% of the production. Other sources include Camel, Yak, etc.
The state of Uttar Pradesh (UP) is the largest milk-producing state. Other major states include Rajasthan, AP, Gujarat, etc. In India, there are close to 80 million families that own cows or buffaloes, or both, and are involved in the task of milk production. However, the nature of the industry is unorganized. Around 95% of milk producers in India have 5 or fewer animal stock. The percentage of large diaries (50 or more animal stocks) is limited. However, big dairies now expanding their footprint, especially in the state of Punjab, Maharashtra, Gujarat, AP, and Telangana.
Around 48% of the total milk produced in India is consumed locally or sold at rural levels. The remaining milk is supplied for processing. Milk processing in India consists of mainly packaged milk as well as other value-added products such as yogurt, butter, cheese, paneer, sweets, skimmed milk powder, etc. The size of packaged milk is pegged at 85 million tons in FY 22, jumping by 83 million tones in FY 21. India is also one of the emerging exporters of milk products such as skimmed milk powder, casein milk, cream, etc. Nevertheless, the export from the country is still limited as local consumption is high.
Indian milk processing business is run by cooperatives, and private enterprises alongside a vast unorganized private sector that comprises local vendors, milkmen, small private companies, etc.
There are multiple factors (s) that are driving the growth of milk production in India.
The Indian government has taken proactive steps to support the milk production, preservation, and processing industry.
The Indian dairy processing sector is set for tremendous growth. The market will see increased organization and value creation with many new investors pivoting towards high-value products such as Cheese, Yogurt, variants of butter, creams, skimmed milk powder, flavored milk, etc. Meanwhile, the demand for packaged milk will also grow steadily as it remains one of the major sources of proteins.
This will also unfold tremendous opportunities in ancillary businesses as well such as cold chains, packaging, manufacturing of equipment, milk packaging, veterinary services, etc.
If you are an investor or a business looking to enter the dairy production, or processing business or planning to start a milk product venture, The India Watch can be helpful. The Indian dairy (and ancillary industries), though a lucrative venture is also a competitive and complex venture. Before starting a venture on a large scale, it is important to take help in terms of feasibility or a market study, as it can refurbish a lot of actionable data and insights and enable businesses to make informed decisions. The scope of the study will include: