India’s Milk Output is Forecast to Surge by 5% Annually, Reinforcing Its Position as a Global Dairy Giant Driven by Explosive Domestic Demand.
India’s dairy sector is poised for a period of remarkable expansion, with a new report by India Ratings and Research (Ind-Ra) projecting milk production to grow by around 5% year-on-year in the near to medium term. This impressive growth is set to further solidify the nation’s status as the world’s largest milk producer, a position it already holds with approximately 24% of global production. This sustained increase is driven by a combination of favorable government policies, a growing herd size, and the sector’s vital role as a supplementary income source for millions of rural households.
The growth is backed by strong recent performance, as confirmed by crucial data journalism. In fiscal year FY24, India’s milk production rose by 3.78% to a total of 239.3 million tonnes, a figure that highlights the sector’s resilience and robust development. This growth has resulted in an increase in per capita milk availability, which has climbed from 406 grams per day in FY20 to 471 grams per day in FY24. The Ind-Ra report expects per capita availability to grow by an additional 4% in the medium term, outpacing population growth.
Domestic consumption is the primary engine fueling this growth. The article notes that rising urbanization, higher disposable incomes, and a growing appetite for a wider variety of dairy products are key drivers of demand. Milk and dairy products consistently account for the second-largest share of household food expenditure in India, averaging 20.7–22% of total food spending over the past decade. The burgeoning market for manufactured dairy products is projected to grow at a compound annual growth rate (CAGR) of 10.8%, reaching a value of ₹4.2 trillion by FY27.
While domestic demand is the main driver, India’s dairy exports are also gaining momentum. The country’s exports of dairy products have seen a sharp increase, with a 77.9% growth in volume and an 80.6% increase in value in FY25, reaching over $492 million. The United Arab Emirates, Bangladesh, and the United States are among the top export destinations. Despite this progress, India’s share of global dairy trade remains modest at just 0.25%, a direct result of the immense domestic demand that absorbs the vast majority of its production.
The success of the sector is deeply rooted in its cooperative model, which remains a reliable system for farmers. The article highlights that cooperatives are a dominant force in milk procurement, handling a significant portion of the country’s marketable surplus. This model ensures that 80-82% of milk sale proceeds are paid directly to farmers, providing a faster and more transparent cash cycle compared to many other agricultural commodities. This strong cooperative backbone, coupled with favorable government initiatives, positions the entire agribusiness sector for continued success.
Source: News18, “India’s Milk Output Sees Remarkable Growth, May Grow 5% In Medium Term On Domestic Demand: Ind-Ra”
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