India's Dairy Sector Set for 5% Annual Growth, Driven by Domestic Demand and Cooperative Strength: Ind-Ra

India remains the world's largest milk producer, with output reaching 239.3 million tonnes in FY24. This expansion benefits from government schemes, serving as a crucial income source for rural households. Per capita milk availability rose to 471 grams/day in FY24 from 406 grams/day in FY20, with a forecasted CAGR of 4% amid stabilizing population growth. About 63% of milk output is marketed, divided between organised and unorganised sectors, with dairy cooperatives and private companies playing a significant role in farmer income stabilization.

Manufactured dairy products are poised for a CAGR of 10.8%, reaching ₹4.2 trillion by FY27, up from ₹3.09 trillion in FY24, boosted by household consumption. The organised sector procured 51 million tonnes of milk in FY24, with cooperatives handling almost half. India is gaining traction in global dairy markets, exporting 113,350 metric tonnes of dairy products valued at USD 492.9 million in FY25, marking significant growth. Despite export surges, high domestic demand continues to dominate the industry landscape, underscoring the sector's importance to India's agribusiness economy.