From volume to value: India’s dairy moment

India is the world’s largest milk producer, yet global leadership in dairy depends on competitiveness, not volume alone. As global demand rises, the sector must shift its focus to productivity, technology-driven systems, export readiness, and sustainable supply chains. With the right policy support and innovation ecosystem, India has the opportunity to evolve from a volume leader into the world’s supplier of choice for dairy products.

For six decades, India and the world have lived through a quiet miracle: food systems that expanded just fast enough to keep hunger at bay. Between 1960 and today, the global population grew 2.6 times, while food production rose even faster. Wheat and rice more than tripled. Fruits and vegetables increased fivefold. Egg production surged sixfold. Even milk output managed to keep pace with population growth.

This success did more than fill plates — it helped avert conflict. Hunger fuels unrest; food security sustains peace. India played a central role in this transformation. Whether rice, wheat, sugar, potatoes, or milk, India is either the largest or second-largest producer globally. In dairy alone, India contributes nearly one-fourth of global milk output — more than the US and the EU combined. Yet the obvious question remains: if we produce so much, why aren’t we a global dairy powerhouse?

The answer lies in productivity. India leads in volume but remains far below global benchmarks in per-animal yield. Global markets reward consistency, quality, and standards — outcomes driven by genetics, feed science, supply-chain discipline, and digital intelligence, not by simply expanding herd size. If India wants to lead, it must compete not with more animals, but with better systems.

Technology will define this transition. IoT-based herd monitoring, precision feeding, AI-driven breeding, and QR-enabled consumer traceability are no longer futuristic concepts; they are already shaping the next dairy revolution. The next leap in dairy will not come from producing more milk, but from using better data.

India’s dairy sector supports over 80 million households, making it the world’s largest livelihood ecosystem. This explains why dairy has remained outside most free trade agreements and why tariff debates — whether driven by US policy cycles or shifting geopolitics — remain sensitive. Protection, however, cannot be a permanent strategy. It is a bridge. The objective is not insulation, but global competitiveness — entering markets from a position of strength, not fear.

Achieving this requires scale, export readiness, and a supportive ecosystem. A national dairy export policy aligned with WTO norms is long overdue. India needs export clusters, certification laboratories, and a dedicated institutional body for market intelligence and global branding.

In dairy, time is everything. The clock starts ticking the moment milk is drawn. Logistics is not a back-end function; it determines quality, safety, and farmer income. Countries that mastered the cold chain mastered dairy. India must now move beyond basic chilling to integrated, energy-efficient, digital supply chains that track milk from udder to shelf. Renewable energy, biogas, water recycling, and carbon-efficient processing systems should become standard practice. Sustainability is no longer a CSR commitment — it is a business imperative.

For years, dairy was seen as traditional, even static. Today, it is one of India’s most innovation-hungry sectors. The next wave of startups may not emerge from urban tech hubs, but from rural India — applying AI to feed optimisation, building premium regional dairy brands, creating D2C platforms, or developing sensors that guarantee milk quality. Incubators, blended finance, cooperative partnerships, and industry–academia collaboration will determine how quickly this ecosystem scales.

Globally, demand is far from saturated. Dairy consumption is rising across South Asia, the Middle East, Africa, and ASEAN — regions where Indian products are both culturally aligned and cost-competitive. While India already exports ghee, paneer, SMP, and traditional products, these flows remain largely opportunistic rather than strategic. With targeted investments, India can also build strength in high-value segments such as whey protein, infant-grade lactose, and specialty cheeses — areas where imports still dominate but domestic capability is beginning to emerge.

The message is clear: India must evolve from being the world’s largest producer of milk to becoming the supplier of choice for the world.

The Road to 2047: What India Must Get Right

By the time India completes 100 years of independence, our dairy sector should reflect three pillars:

1.      Quality that rivals the best in the world

Not just safe milk, but branded, traceable, value-added products with global consistency.

2.      Sustainability embedded end-to-end

Higher yield with lower emissions; better manure economics; circular processing systems.

3.      Technology that transforms the grassroots

A digitally empowered farmer who knows her herd’s health, feed, price discovery, and market access in real time.

If we do this, dairy can become one of India’s greatest soft-power assets — much like yoga, Ayurveda, and IT.

Where the Sector Stands Today – and What Must Happen Next

• We must formalize value, not just volume. India’s organized dairy sector handles about 140 million litres daily; the unorganized sector handles twice Integrating, not replacing, the latter is the path forward.
• We must embrace science in farming. Breeding, feed, clean water, mineral nutrition, manure management, and early chilling are as essential as digital Productivity and quality are inseparable.
• We must attract serious The sector needs blended finance, clear policy, scalable infrastructure, and investor visibility. The world’s largest dairy ecosystem deserves world-class capital frameworks.
• And we must build a unified national identity for dairy This is not about competing with New Zealand or Europe on their terms. It is about offering the world the diversity, heritage, and strength of Indian dairy.

India has the world’s largest dairy herd, the world’s largest dairy consumer base, and the world’s most extensive rural milk network. We also have unmatched digital capability. We stand at the intersection of two national strengths: the world’s biggest dairy system and the world’s most vibrant technology ecosystem. If we bring them together – with purpose, ambition, and discipline – India will not only feed itself sustainably, it will feed parts of the world. And it will do so with the confidence of a nation that has risen not because it was protected, but because it was prepared.

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Mr Rajiv Mitra is a leading expert in India’s food and dairy sector, with extensive leadership experience at the MD and CEO level across major Indian and multinational organisations. He is also an active angel investor, supporting several emerging startups in the food and dairy space.

A postgraduate in Economics with an MBA in Marketing, Mr Mitra has held senior managerial roles across diverse sectors, including retail and telecommunications.