November 21, 2011


India's dairy industry to reach US$1 million by 2015


India's dairy industry is likely to reach INR50 million (US$976,000) by 2015 amid rapid increase in domestic demand for milk and milk-based products, ASSOCHAM said on Friday (Nov 18).


Milk production is likely to reach about 190 million tonnes in 2015 from current level of about 123 million tonnes according to a study titled 'Indian Dairy Industry: The Way Ahead' released by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).


"India is world's largest milk producer and accounts for nearly 20% of total milk production of the world but almost all of it gets consumed domestically," said D.S. Rawat, secretary general of ASSOCHAM while releasing the study.


"Growing at about 10% annually, the Indian dairy industry is predominantly controlled by the unorganised sector which accounts for nearly 85%. About eight crore rural families across India are engaged in dairy production and the rural market consumes over half of the total milk produce," said Rawat.


Owing to conventional dietary habits of Indian households, about 60% of milk produced is consumed in the liquid form and the remaining is consumed in the form of butter, clarified butter (desi ghee), cheese, curd, paneer, ice cream, dairy whiteners and traditional sweets.


There is enormous scope seen ahead before the dairy industry for value-added products including custards, desserts, puddings, sauces, mousse, stirred yogurt and nectars.


Demand for processed and packaged dairy produce in urban centres is going to see a phenomenal growth due to growing population with higher disposable income and greater health consciousness.


However, upward spiralling prices and lack of fodder resulting in low yield from cattle together with lack of trained and skilled dairy farm labour, lack of proper infrastructure like cold storage facilities and lack of transparent milk pricing system are certain key problems affecting retail consumption of milk and leading to escalating milk prices in the domestic market points out the ASSOCHAM study.


"Private sector can play a pivotal role in reducing the cost of production by employing advanced techniques to enhance productivity, provide breeding facilities for cattle and improving the health of the dairy animals apart from developing proper dairy production, processing and marketing infrastructure," said Rawat.


Characterised by high growth rate, the domestic dairy industry provides a multi-billion dollar potential for foreign companies especially those in New Zealand and Australia. But tariff and regulatory barriers are proving to be a hindrance for foreign companies to enter Indian dairy segment, said ASSOCHAM.


Andhra Pradesh, Bihar, Haryana, Gujarat, Madhya Pradesh, Maharashtra, Rajasthan and Uttar Pradesh are leading milk producing States in India.

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