India has firmly established itself as the world’s largest milk producer, contributing nearly one-fourth of global milk production. Despite this achievement, the country accounts for less than 1% of global dairy exports, highlighting a significant gap between production capacity and international market participation.
As India continues negotiating Free Trade Agreements (FTAs) with major economies, the dairy sector has become a key point of discussion. Industry experts believe the country’s approach should carefully balance protecting millions of small dairy farmers while preparing the industry to compete globally through improved productivity, quality, infrastructure and value-added products.
🐄 Protecting Farmer Livelihoods Remains Essential
India’s dairy industry supports nearly 80 million small and marginal farmers, many of whom own only a few dairy animals. Unlike developed nations that operate large commercial dairy farms, India’s dairy ecosystem is deeply linked to rural livelihoods and food security.
For this reason, India has consistently refused to offer dairy tariff concessions in recent FTAs, including negotiations with the European Union, the United Kingdom, Australia and New Zealand. Industry leaders believe this cautious approach protects domestic milk prices and ensures sustainable incomes for dairy farmers.
📈 From Protection to Competitiveness
While safeguarding farmers remains a priority, experts argue that India’s long-term success depends on making its dairy sector globally competitive.
Improving milk productivity through better genetics, balanced nutrition, scientific breeding, preventive healthcare and efficient processing has emerged as the industry’s biggest priority. Modernising milk collection systems, strengthening cold-chain infrastructure and adopting international food safety standards will also be essential for expanding exports.
Digital traceability, residue monitoring and internationally recognised quality certification are increasingly viewed as necessary investments for accessing premium global markets.
🌍 FTAs Can Drive Domestic Reforms
Industry stakeholders believe future trade agreements should serve not only as protective instruments but also as catalysts for modernising India’s dairy ecosystem.
Trade commitments could encourage investments in testing laboratories, automated processing facilities, digital procurement systems and traceability from farm to processing plant. Such reforms would help Indian dairy products meet international regulatory standards while improving overall efficiency.
However, experts also stress that regulatory improvements within India—including stronger quality standards for milk production, transportation and handling—must accompany any trade liberalisation.
🧀 Focus on Value-Added Dairy Products
Given India’s strong domestic demand, experts believe the country should not aim to export every dairy product. Instead, it should concentrate on high-value categories where it can build a sustainable competitive advantage.
Products such as ghee, paneer, butter, cheese, whey proteins, specialised milk powders, dairy ingredients and functional dairy products offer promising export opportunities. Building globally recognised brands and expanding white-label manufacturing could further strengthen India’s presence in international markets.
🚜 Productivity Is the Biggest Challenge
Low milk yield per animal remains one of the biggest structural challenges for the Indian dairy industry.
Experts recommend wider adoption of artificial insemination, scientific feeding practices, silage production, improved cattle nutrition and better animal healthcare to significantly improve productivity. Farmers should also be rewarded for producing higher-quality milk through transparent testing and quality-based pricing systems.
🤝 Building a Balanced Trade Strategy
Industry leaders agree that India’s dairy policy should continue protecting vulnerable farmers while gradually improving competitiveness through technology, infrastructure and private investment.
Future FTAs should also focus on securing greater market access for Indian dairy products by reducing non-tariff barriers, promoting mutual recognition of certifications and strengthening disease control and livestock traceability systems.
As milk production continues to rise, expanding exports will become increasingly important to prevent domestic oversupply and protect farmer incomes. A balanced strategy that combines farmer protection with global competitiveness could position India as a stronger player in the international dairy market while ensuring sustainable growth for millions of dairy households.
