India must open up for imports to capture foreign dairy market
Niti Aayog member Ramesh Chand has proposed that India enhance its dairy exports as production in the country surpasses demand. This requires enhancing India’s competitiveness, while also opening up to dairy imports through free trade agreements with other countries, he said.
“India’s dairy industry has been opposing any free trade agreement that involves liberalisation of trade (import) in dairy products. However, if we have to capture overseas markets for disposal of future surplus milk in the country, then we must be export competitive,” he said in a working paper, titled India’s White Revolution.
According to Chand, being export competitive requires higher competitiveness than competing with imports. “A country cannot be export competitive if it is unable to compete with imports. This issue is crucial for the future growth of the dairy industry in India,” he said.
“India’s dairy industry has been opposing any free trade agreement that involves liberalisation of trade (import) in dairy products. However, if we have to capture overseas markets for disposal of future surplus milk in the country, then we must be export competitive,” he said in a working paper, titled India’s White Revolution.
According to Chand, being export competitive requires higher competitiveness than competing with imports. “A country cannot be export competitive if it is unable to compete with imports. This issue is crucial for the future growth of the dairy industry in India,” he said.
As per the working paper, milk production in the country is projected to grow at 6% per year while the per-capita milk intake is already above the recommended level, even as population growth is falling below 1%.
Consequently, the domestic milk demand in future is likely to grow at a lower rate and is expected to be lower than growth in production, which is quite robust. This will generate some surplus of milk over normal demand and supply, he said.
Chand suggests that India’s dairy industry prepare for channelising some domestic production to overseas markets, preferably after processing in various products rather than the liquid milk alone. “This will require some change in investment in the dairy industry, including the value chain. India can also tap some high-end markets if it can address milk quality and livestock health,” he said.