Export Potential of dairy products from India
India's dairy sector has significant export potential, with recent growth driven by competitive pricing, improved quality, and strong global demand for value-added products like ghee and skimmed milk powder. The industry is poised for substantial expansion, supported by government initiatives and increasing international interest in Indian products.
Key Drivers of Export Potential
Growing Global Demand for Specific Products : There is a rising international demand for ethnic and value-added Indian products. Ghee and butter, in particular, are popular in South Asian and Middle Eastern markets due to their cultural and culinary significance. There is also a growing global interest in whey protein and casein for the sports nutrition industry.
Growing Global Demand for Specific Products : There is a rising international demand for ethnic and value-added Indian products. Ghee and butter, in particular, are popular in South Asian and Middle Eastern markets due to their cultural and culinary significance. There is also a growing global interest in whey protein and casein for the sports nutrition industry.
Cost-Effectiveness : Indian dairy products are often more cost-effective compared to those from Europe and North America, giving India a competitive edge in price-sensitive markets.
Increased Production Capacity : India is the world's largest milk producer, with production growing at an annual rate of 5.7%, well above the global average. This high production volume provides a strong base for exports, though a significant portion still meets vast domestic demand.
Quality Improvements and Certifications: The adoption of modern processing techniques, adherence to stringent quality control measures (like FSSAI and EIC certifications), are enhancing the acceptance of Indian dairy products in global markets.
Government Support : Various government schemes and policies, such as the Agriculture Export Policy, the Dairy Processing and Infrastructure Development Fund (DIDF), and export incentives (e.g., the Duty Drawback Scheme), are actively promoting dairy exports and helping businesses expand their global footprint.
Trade Agreements : Bilateral trade deals, such as with the UAE, help reduce tariffs and non-tariff barriers, facilitating smoother market access. Ongoing negotiations with other countries could further unlock potential in new regions.
Target Markets
Primary markets currently include the UAE, Bangladesh, USA, Saudi Arabia, and Bhutan. There is significant potential to expand into:
Southeast Asia : Countries like Vietnam and Malaysia have a growing food processing industry and increasing demand for high-protein dairy ingredients.
Africa : Emerging economies such as Egypt, Nigeria, and Kenya offer new market opportunities due to rising urbanization and dependence on imports.
Challenges and Future Outlook
Despite the immense potential, challenges exist, including strict global quality compliance norms in some developed markets, strong competition from established exporters like New Zealand and the EU, limited cold chain infrastructure, and managing the balance between domestic consumption and export availability.
The future outlook for Indian dairy exports is positive, with an estimated compound annual growth rate (CAGR) of 4.96% in the milk export market value between 2025 and 2030. By focusing on value-added products, organic and A2 milk, and leveraging technological advancements, India can significantly increase its small share of the global dairy market.
