An Overview of the Indian Dairy Sector

The Indian dairy sector is one of the largest and fastest-growing in the world. It is a significant contributor to the Indian economy, with a market size of over US$100 billion

- Venkatesh Ganapathy

The sector is dominated by small and marginal farmers, who own around 80% of the total bovine population in the country.

 

India is the world's largest milk producer, accounting for around 20% of global milk production. The country produced around 198 million metric tonnes of milk in 2020-21, according to the Department of Animal Husbandry and Dairying. The sector has been growing at a compound annual growth rate (CAGR) of around 6% over the past decade.

The Indian dairy sector is largely driven by the cooperative model, with the National Dairy Development Board (NDDB) playing a key role in promoting and developing dairy cooperatives across the country. The cooperative model has been successful in improving milk productivity, quality, and profitability for small and marginal farmers.

The dairy sector in India has a long and rich history, dating back to ancient times. In fact, milk and milk products have been an integral part of the Indian diet for thousands of years, and the country has a rich tradition of dairy farming and milkbased cuisine.

During the Vedic period (1500-500 BCE), milk and its products like ghee and curd were considered sacred and were used in religious ceremonies. The period also saw the domestication of cows and buffaloes, which laid the foundation for the dairy sector in India.

In the colonial era, the British introduced modern dairy farming practises in India to meet their milk and meat requirements. The first modern dairy was set up in 1885 in Aundh, Maharashtra, which was followed by the establishment of the Bombay Milk Scheme in 1948 to supply milk to Mumbai city.