India’s dairy sector enters phase of strong growth and value-addition

India’s dairy market is set for sustained expansion in both volume and processed products, driven by favourable demographics and rising incomes. With a population of about 1.5 billion and nearly 47 % under the age of 25, the country is uniquely positioned to dominate global dairy demand growth.

Per-capita milk consumption in India is rising at an estimated 3.1 % annually, significantly above the typical growth rates in other developing countries. The bulk of consumption remains fluid milk, but higher-value segments — yoghurt and cheese — are recording accelerated growth (projected at ~12 % and ~11 % respectively for 2025-30).

On the supply side, milk production is forecast to grow at about 3.6 % per year between 2025-34, the highest among major dairy-producing nations. Meanwhile, the processed-dairy share (milk collected through dairies rather than informal channels) is expected to grow by ~10.3 % from 2025-30 — reflecting structural modernisation of the sector.

That said, the Indian dairy chain remains largely informal — only around 25 % of milk is channelled via organised dairies, with the remainder handled by village itinerants, household consumption and local vendors. Challenges remain in logistics (cold chain), feed/water availability, and geographical constraints (heat stress, diverse regions).

In trade terms, while India produces most of its dairy domestically, export opportunities are gaining traction. The Government of India has signalled ambitions to enhance dairy exports via policy support, infrastructure investments, and market development. At the same time, India is importing more high-specification dairy ingredients (infant formula, dairy-protein concentrates) — reflecting rising consumer sophistication.

For stakeholders across the value chain — from farmers and cooperatives to processing plants, machinery suppliers, and product developers — this offers a strategic opportunity. The growth in processed/ value-added dairy aligns with your work in dairy-plant automation, new product development and lab-based testing. A well-timed investment in processing infrastructure, cold-chain enhancement and innovation capability could position players strongly as India’s dairy journey accelerates.

Source : Dairynews7x7 Nov 7th 2025 AHDB