India Dairy Market Size to Reach USD 274.09 Billion by 2032 | CAGR 9.33%

India Dairy Market to Witness Strong Growth Driven by Rising Milk Production, Government Support, and Value-Added Dairy Demand

MAHARASHTRA, INDIA, February 11, 2026 /EINPresswire.com/ -- The India dairy market was valued at USD 135.30 billion in 2024 and is projected to grow from USD 146.80 billion in 2025 to USD 274.09 billion by 2032, registering a CAGR of 9.33% during the forecast period. India is currently the world’s largest producer of milk and one of the leading exporters of dairy products. The dairy industry contributes nearly 5% to the national economy and directly supports over eight crore farmers across the country.

Major milk-producing states include Uttar Pradesh, Maharashtra, Himachal Pradesh, Madhya Pradesh, Rajasthan, Punjab, and Tamil Nadu. The sector’s growth is further reinforced by strong policy backing through initiatives such as the Rashtriya Gokul Mission, National Dairy Development Board (NDDB), State Cooperative Dairy Federations, National Programme for Dairy Development (NPDD), and the Dairy Entrepreneurship Development Scheme (DEDS), which aim to enhance productivity, infrastructure, and farmer income.

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India Dairy Market Takeaways
The market continues to witness sustained expansion due to rising milk production, strong household consumption, and growing demand for processed and value-added dairy products such as ghee, paneer, yogurt, and butter. Government-backed initiatives and increasing investments in infrastructure modernization are strengthening long-term market stability.

COVID-19 Impact
Shortage in Supply of Animal Feed Slightly Impacted Market Growth
During the initial COVID-19 lockdown, shortages in critical inputs such as animal feed and fodder negatively affected dairy production and market growth. Closure of feed facilities and logistical disruptions limited access to green and dry fodder, forcing dairy farmers to rely on crop residues and bran. According to NABARD, reduced fodder intake led to a decline in milk yield, resulting in nearly a 6% reduction in dairy production within one month of lockdown.
However, the pandemic also reshaped consumption patterns. With restrictions on restaurants and cafés, household consumption of dairy products increased significantly. Demand for paneer, ghee, khoya, curd, lassi, buttermilk, and desserts rose sharply, supported by prolonged summer conditions from April to June. The crisis ultimately accelerated demand for value-added dairy products, creating long-term growth opportunities for the sector.

Latest Trends
Growing Demand for Functional Dairy Products Influences Market Potential
The rising popularity of functional dairy products, including vitamin- and mineral-fortified milk, probiotic yogurt, and omega-enriched ice creams, is significantly influencing market growth. Health-conscious consumers are increasingly shifting toward value-added products that support immunity and overall wellness.
In March 2020, Hangyo launched gourmet ice creams fortified with omega-3, 6, and 9. In August 2021, Lactalis India introduced its first probiotic yogurt drink, Lactel Turbo Yoghurt Drink, targeting on-the-go youth consumers. Additionally, in February 2022, Indian scientists developed a next-generation probiotic strain, Lactobacillus Plantarum JBC5, aimed at improving longevity and healthy aging. These innovations continue to strengthen the functional dairy segment.

Driving Factors
Significant Milk Production Across India Drives Market Growth
India accounts for nearly 23% of global milk production, supported by a uniquely structured dairy herd comprising both cattle and water buffalo. According to USDA data, nearly half of India’s milk production comes from water buffalo, enhancing fat-rich dairy output. Abundant milk availability fuels the production of processed dairy products such as cheese, butter, ghee, curd, yogurt, and paneer, all of which enjoy strong household demand.

Supportive Government Schemes Strengthen Market Expansion
Government initiatives such as the National Action Plan for Dairy Development (NAPD), NPDD, Nationwide Artificial Insemination Programme (NAIP), and the National Animal Disease Control Programme are accelerating sectoral growth. The NAPD aims to increase national milk production from 254.55 MMT (2021–22) to 300 MMT by 2023–24, while NPDD focuses on strengthening milk quality testing and chilling infrastructure.

Restraining Factors
Fodder Shortage and Disease Outbreaks Restrict Market Growth
India continues to face challenges related to fodder shortages and livestock diseases. According to the ICAR-Indian Grassland and Fodder Research Institute (IGFRI), India faced deficits of 11.24% in green fodder, 23.4% in dry fodder, and 28.9% in concentrates in 2022. Additionally, outbreaks such as lumpy skin disease led to over 97,000 cattle deaths in 2022, adversely impacting milk production and market growth.

Segmentation Analysis
By Type
Milk remains the dominant segment due to its role as a dietary staple and base ingredient for multiple food preparations. Rising awareness regarding the health benefits of milk and increasing consumption of ghee and paneer further support segmental growth.

By Distribution Channel
The “others” segment, including local milk vendors and convenience stores, dominates due to easy accessibility and preference for fresh milk. Online retail channels are witnessing strong growth driven by convenience, doorstep delivery, and digital adoption.

Key Industry Players
Digitalization and Product Innovation Strengthen Market Position
Leading dairy players are expanding production capacity, launching premium and functional products, and strengthening digital distribution channels to increase market penetration.

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List of Key Companies Profiled:
Gujarat Cooperative Milk Marketing Federation Ltd.
Heritage Foods Limited
Karnataka Cooperative Milk Producers Federation Limited
Kwality Milk Foods Ltd
Milkfood Limited
National Dairy Development Board
Parag Milk Foods
Punjab State Cooperative Milk Producers Federation Ltd
Rajasthan Cooperative Dairy Federation Ltd
Tamil Nadu Cooperative Milk Producers Federation Ltd

Key Industry Developments
October 2022: MILKFED agreed to launch Verka dairy products in Delhi, benefiting farmers through improved pricing.
August 2022: Parag Milk Foods launched its premium brand Pride of Cows in Ahmedabad.
June 2022: Provilac introduced lactose-free cow milk in India.
March 2022: Heritage Foods launched Premium Badam Milk, Badam Charger.
January 2022: NDDB announced plans to achieve over 20% growth in the ghee segment by expanding retail presence nationwide.

Ashwin Arora
Fortune Business Insights™ Pvt. Ltd.
+1 833-909-2966
sales@fortunebusinessinsights.com

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