Driving this growth are key government initiatives, primarily the Pradhan Mantri Formalisation of Micro Food Processing Enterprises Scheme (PM-FME) and the Production Linked Incentive (PLI) Scheme. These mechanisms are specifically designed to inject capital, boost manufacturing, and elevate quality across the sector. Crucially, the focus on formalized units ensures that future dairy production and processing will adhere to higher regulatory and quality standards, which is paramount for gaining better access to demanding international markets and securing long-term food safety.

A primary strategic objective of this massive capacity building is the radical reduction of massive post-harvest loss figures. By transitioning perishable commodities, including milk and its derivatives, from simple raw production into value-added processed goods, the government aims to recover billions in lost revenue. This focus on efficiency and waste reduction aligns perfectly with global sustainability targets and provides robust economic justification for the establishment of modern, efficient processing facilities, potentially including new Mega Food Parks.

The expansion is deeply rooted in empowering the primary producer, ensuring that this industrial growth is inclusive and reaches the grassroots. The initiatives prioritize the integration of farmer groups and Farmer Producer Organisations (FPOs) directly into the new food processing ecosystem. By strengthening the linkage between the farm gate and the factory floor, this policy ensures a stable and high-quality raw material supply, offering a crucial lesson in equitable dairy supply chain development for regions facing similar integration challenges.