India Ratings and Research (Ind-Ra) projects that India’s milk production is poised to grow at 5% year-on-year in the near to medium term, significantly outpacing global dairy trends. The agency estimates that milk output in FY25 rose by 5% YoY, underscoring India’s position as the world’s largest milk producer, supported by rising domestic demand, robust rural linkages, and favourable policy support. Red full press release: India Ratings and Research: Credit Rating and Research Agency India
According to Ind-Ra, India’s milk output reached 239.3 million tonnes in FY24, marking a 3.78% annual growth. This expansion is mainly driven by government schemes, and the sector’s importance as a supplementary income source for rural households, particularly women and smallholder farmers.
Milk Availability and Per Capita Growth
Per capita milk availability in India has seen a steady rise, reaching 471 grams/day in FY24, up from 406 grams/day in FY20. Ind-Ra forecasts a 4% CAGR in per capita availability, with population growth stabilising around 1%. Nearly 63% of milk output is marketed, split between the organised and unorganised sectors. Organised players, including dairy cooperatives and private dairies, play a crucial role in offering transparent procurement and consistent income to farmers.
Domestic Demand Drives Dairy Product Manufacturing
Household consumption remains the main engine of dairy demand in India. The output of manufactured dairy products is projected to grow at a CAGR of 10.8%, reaching ₹4.2 trillion by FY27, up from ₹3.09 trillion in FY24. Between FY20 and FY24, this sector expanded at a CAGR of 9.1%.
Highlights the robust growth trajectory of India’s dairy manufacturing sector. Between FY20 and FY24, the sector saw a compound annual growth rate (CAGR) of 9.1%, rising from INR 2,184.03 billion (corporate + household) in FY20 to INR 3,090.84 billion in FY24. The corporate segment has been the primary driver, accounting for the vast majority of output, while the household segment contributes a smaller but steady share.
Looking ahead, Ind-Ra forecasts a sharper growth pace, with the sector expected to grow at a CAGR of 10.8% between FY25 and FY27, reaching INR 4,200.57 billion by FY27. This growth is underpinned by strong household demand, increasing consumption of value-added dairy products, and greater participation from organised players. The upward trend reaffirms the dairy industry’s critical role in India’s agribusiness economy and its transition towards more formalised and commercially viable operations.
Cooperatives to Lead Procurement Push
Dairy cooperatives are expected to dominate milk procurement, given their expansive rural reach and farmer-centric profit-sharing models. In FY24, the organised sector procured 51 million tonnes of milk, of which cooperatives handled 24 million tonnes.
These cooperatives typically return 80–82% of milk revenue directly to farmers, making dairying a more stable and frequent income stream compared to seasonal crops.
India’s Dairy Export Growth Accelerates
India is gradually carving a space in global dairy markets. In FY25, dairy exports hit 113,350 metric tonnes, worth USD 492.9 million, reflecting a 77.9% growth in volume and 80.6% growth in value. While milk powder exports declined, fermented dairy and butter/ghee products saw a surge. Top export markets included the UAE, Bangladesh, the USA, Saudi Arabia, and Bhutan.
Key players include GCMMF (Amul), Mother Dairy, Verka, COMFED (Bihar), and Britannia, all benefiting from government-backed initiatives that support dairy trade.
Despite growing exports, high domestic demand continues to dominate India’s dairy landscape, ensuring robust sector performance in the years ahead.
