India's Dairy Sector: World's Largest Producer with Limited Export Reach

India, holding the title of the world's largest milk producer, produces 239 million tonnes of milk annually, constituting 24% of the global supply. Despite this, the country contributes a mere 0.25% to global dairy exports, highlighting a significant gap in its international trade presence.

The Indian dairy sector employs over 80 million people and has seen a 5.62% compound annual growth rate over the past decade. However, the industry's potential is hampered by structural fragmentation, with 80% of the dairy supply managed informally, limiting standardization and traceability.

India exported just USD 272 million in dairy goods last year, with primary markets being Nepal, Bangladesh, Bhutan, the UAE, and Sri Lanka. The low average productivity of 1.1 tonnes per cow per year, compared to 3.9–5.9 tonnes in countries like Australia and New Zealand, further restricts export growth.

Domestically, the Indian dairy market is valued at USD 228 billion and is anticipated to grow to USD 687 billion by 2033. This growth is driven by factors such as urbanization, rising incomes, and a shift towards processed dairy products.

Government initiatives like the Rashtriya Gokul Mission and the National Programme for Dairy Development aim to address these challenges by improving genetic quality and infrastructure. Key players such as Amul and Hatsun Agro are investing in cold chain and export infrastructure to enhance global competitiveness.

As the demand for premium dairy products like A2 milk and fermented items rises, India is poised for significant growth, provided it can overcome the hurdles of fragmentation and productivity.