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India’s Dairy Industry Must Shift From Volume to Value
India makes more milk than any other country.
However, producing a lot of milk does not always create enough income for farmers.
A large amount of milk is still sold through informal channels instead of cooperatives and private dairies.
Farmers’ incomes have risen, but inflation and higher costs have reduced their real gains.
People are drinking more milk and eating more protein-rich foods, while milk supplies are growing somewhat more slowly.
This difference can push prices higher.
India also imports some expensive dairy proteins while exporting lower-value milk products.
The dairy industry says it must focus on making more valuable products, not just producing more milk.
India produces the world’s most milk, but much of its marketable surplus remains outside organized channels.
Cooperatives and private dairies collect about 55 million metric tonnes of the roughly 150 million tonnes of marketable surplus.
Dairy farmers’ nominal income grew about 11.5% annually from FY19 to FY25, while real income grew closer to 5%.
Milk consumption has grown 4–5% annually, outpacing supply growth of approximately 3–3.5%.
The industry argues that higher-value products are needed to improve farmer incomes and strengthen dairy-sector stability.
- Who
- India’s dairy farmers, cooperatives, private dairies, and dairy businesses.
- What
- The dairy industry is being urged to move beyond volume growth and create more value across the supply chain.
- Where
- India.
- When
- The commentary was published on September 19, 2026; income figures cover FY19 to FY25.
- Why
- To improve farmer incomes, address rising costs, respond to stronger demand, and capture greater value from dairy production.
Key facts
- Global production position
- India is described as the world’s largest milk producer.
- Marketable surplus
- India has roughly 150 million tonnes of marketable surplus milk.
- Organized collection
- Cooperatives and private dairies collect about 55 million metric tonnes.
- Informal channels
- Approximately 90–95 million tonnes flow through informal and unorganized channels.
- Farmer income growth
- Nominal dairy-farmer income grew about 11.5% annually from FY19 to FY25, while real income growth was closer to 5%.
- Demand growth
- Dairy consumption has grown an estimated 4–5% annually over the past five years.
- Supply growth
- Milk supply has grown approximately 3–3.5% annually.
Sources
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