India Milk Market Outlook to 2030

Market Overview

• The India milk market is valued at USD 66 billion, following consistent growth driven by rising demand for dairy products, expanding middle-class income, and increased per capita milk consumption. The market is bolstered by government programs like the National Dairy Plan and schemes under the National Dairy Development Board (NDDB) to enhance milk productivity and rural infrastructure. Additionally, consumer awareness of the nutritional benefits of milk and dairy products continues to play a critical role in fueling market expansion.
• India's milk market is dominated by key cities and states such as Gujarat, Uttar Pradesh, and Maharashtra, largely due to their strong cooperative dairy movements and advanced dairy farming infrastructure. Gujarat, home to Amul (Gujarat Cooperative Milk Marketing Federation), has one of the most efficient dairy supply chains in the world. The dominance of these regions is also driven by large-scale dairy cooperatives, favorable climatic conditions for cattle farming, and a strong presence of organized retail channels.
• The Indian dairy sector is witnessing increased interest from international dairy giants aiming to enter the market. In 2024, multiple multinational dairy companies have expressed intentions to invest in Indias rapidly growing dairy market. These companies are expected to bring in advanced technologies, new product lines, and stringent quality standards, contributing to the sectors modernization and growth.

Market Segmentation

By Product Type: India's milk market is segmented by product type into packaged milk, raw milk, UHT milk, organic milk, and flavored milk. Packaged milk, particularly in urban areas, has gained significant traction due to concerns over hygiene, convenience, and longer shelf life. The dominance of packaged milk is attributed to its penetration into organized retail, with major brands ensuring consistent quality and availability. Additionally, the growth of e-commerce platforms has further supported the expansion of packaged milk in metropolitan cities.

By Distribution Channel: The milk market is also segmented by distribution channel into supermarkets and hypermarkets, convenience stores, online channels, and dairy parlors. Supermarkets and hypermarkets dominate the distribution segment, holding a significant market share due to their large consumer base, wide product range, and convenience of purchasing. The increased preference for one-stop shopping experiences has further fueled growth in this segment, especially in urban areas. Dairy parlors, on the other hand, remain prominent in rural and semi-urban regions where they continue to serve as traditional supply points for consumers.

Competitive Landscape

The India milk market is characterized by a mix of well-established cooperatives and large private players. The industry is led by Amul, which continues to dominate due to its extensive supply chain, innovation in dairy products, and cooperative structure that empowers farmers. Private players like Nestl and Britannia have made significant inroads through value-added products such as UHT milk and flavored dairy beverages.

India Milk Market Analysis

Growth Drivers

• Increasing per capita milk consumption: India's per capita milk consumption has been steadily rising, driven by population growth and changing dietary preferences. In 2024, per capita milk consumption in India is projected to exceed 430 grams per day, as compared to 427 grams per day in 2023. This surge is fueled by increasing demand for dairy products across urban and rural areas. The rising trend in per capita consumption is underpinned by Indias cultural reliance on dairy as a primary protein source, especially in vegetarian households.
• Rising awareness of nutritional benefits: There is growing consumer awareness about the nutritional benefits of milk, including its protein, calcium, and vitamin content. The Indian governments National Dairy Development Board (NDDB) emphasizes milk as a crucial component for fighting malnutrition. According to reports from 2024, milk remains a vital source of nutrition for over 800 million Indian households, with various campaigns encouraging the consumption of milk and dairy products for improved public health.
• Expanding middle-class population: Indias middle-class population, estimated at 400 million individuals in 2024, is driving demand for high-quality milk products. With rising disposable income, middle-class households are increasingly purchasing premium dairy products like UHT milk, organic milk, and value-added products such as paneer and curd. The expansion of the middle class has resulted in higher spending on health-conscious and nutritional food items, including milk and its derivatives.

Market Challenges

• Price volatility in feed: The cost of cattle feed, a crucial input for milk production, has experienced fluctuations due to supply chain disruptions and increased demand for agricultural commodities. In 2024, feed prices have risen by INR 500-600 per metric ton compared to 2023, straining the profitability of dairy farmers. The volatility in input prices makes it challenging for small-scale farmers to sustain operations without government intervention.
• Lack of cold chain infrastructure: India faces a significant deficit in cold chain infrastructure, which hinders the efficient distribution of milk, especially in rural areas. In 2024, only about 20% of India's milk production is transported through cold chains, resulting in high wastage rates. Without adequate refrigeration and storage facilities, dairy farmers and processors encounter losses, particularly in the peak production season.

Future Outlook

Over the next five years, the India milk market is expected to witness steady growth, driven by increasing urbanization, rising disposable incomes, and evolving consumer preferences toward value-added dairy products. The governments continued support through schemes like the National Programme for Dairy Development (NPDD) will enhance the production capabilities of small-scale farmers, improving the overall supply chain.

Advancements in dairy processing technologies and the growing trend towards organic and lactose-free milk are likely to shape the market dynamics. Furthermore, investments in improving cold chain logistics and storage infrastructure will help mitigate losses, enhance product quality, and extend the reach of dairy products into semi-urban and rural areas.

Opportunities

• Expansion of dairy product categories (UHT, flavored milk, A2 milk): There is significant potential for the growth of value-added dairy products such as UHT milk, flavored milk, and A2 milk. As of 2024, UHT milk has penetrated over 60 million households in urban areas, indicating robust demand for shelf-stable milk. Additionally, the increasing popularity of A2 milk, due to its perceived health benefits, offers opportunities for diversification within the milk market.
• Growing export potential to neighboring countries: Indias milk exports have witnessed an upward trend, with demand from neighboring countries such as Bangladesh, Nepal, and Bhutan. In 2024, India exported over 150,000 metric tons of milk and dairy products to these markets, capitalizing on its status as the worlds largest milk producer. The governments focus on expanding dairy exports, supported by competitive pricing and quality control measures, could further enhance export figures in the coming years.