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Written by varun » Updated on: November 18th, 2024
The India dairy products market stands as one of the most significant and multifaceted sectors within the country's agricultural economy. According to a report by TechSci Research titled “India Dairy Products Market - Industry Size, Share, Trends, Competition Forecast & Opportunities, 2029,” the market was valued at USD 24.5 billion in 2023 and is expected to grow at a CAGR of 6.3% from 2025 to 2029.
As the largest milk-producing nation globally, India’s dairy industry is deeply embedded in the nation’s culture, economy, and nutrition. With a wide range of dairy products, from traditional milk-based sweets to modern-day cheese and probiotic drinks, the market caters to a diverse population of over 1.3 billion people.
This report delves into the current state of the Indian dairy market, exploring its key drivers, challenges, and opportunities for growth. Additionally, it provides a detailed analysis of the regional segmentation and the role of major players operating within the industry.
Milk holds a pivotal role in India’s dairy market and is often referred to as “white gold” due to its cultural, nutritional, and economic significance. The milk segment is the largest contributor to the dairy industry, catering to both rural and urban populations. In rural areas, fresh milk is a dietary staple, while urban consumers increasingly opt for packaged milk products due to convenience and hygiene factors.
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Milk forms the base for various derivative products such as:
Fermented dairy products, especially yogurt (or dahi), have a prominent place in Indian households. Yogurt is consumed as part of daily meals and is also used in making traditional beverages such as lassi and buttermilk.
The market for value-added products like flavored yogurt and probiotic drinks is witnessing rapid growth, driven by urban consumers who are becoming increasingly health-conscious. These products, fortified with additional nutrients, appeal to consumers looking for alternatives to traditional dairy offerings.
India’s butter market continues to thrive, driven by the popularity of products like Amul butter and increasing use in cooking. Additionally, processed cheese has seen a rise in demand, especially in metropolitan areas. Major dairy cooperatives and private players are introducing cheese variants to cater to the urban demand for pizza toppings, spreads, and quick snacks.
Dairy-based sweets hold immense cultural significance in India, often being consumed during festivals, religious ceremonies, and special occasions. Products like kheer, rasgulla, and gulab jamun are quintessential parts of Indian celebrations, and the growing demand for ready-made versions of these sweets is boosting the dairy desserts segment.
The growing awareness among consumers about the nutritional benefits of dairy products is one of the primary drivers of market growth. Dairy products are rich in essential nutrients such as calcium, protein, and vitamins, making them a key part of daily diets in both rural and urban areas.
Urbanization is reshaping the dietary habits of the Indian population, leading to an increase in demand for packaged dairy products. The fast-paced lifestyle of urban dwellers has contributed to the popularity of products with a longer shelf life, such as UHT (Ultra-High Temperature) milk and processed cheese.
The expansion of organized retail chains and supermarkets has made it easier for consumers to access a wide variety of dairy products. This has also provided a platform for both domestic and international brands to showcase their products, fueling competition and innovation within the market.
The adoption of modern technologies in dairy processing units has led to significant improvements in product quality, safety, and efficiency. Advanced pasteurization and packaging techniques have made it possible to produce dairy items that meet international standards, further boosting the export potential of Indian dairy products.
Ensuring consistent product quality and safety remains a major challenge, especially in the unorganized sector. The lack of standardization and adherence to hygiene practices can lead to contamination and spoilage, affecting consumer trust in dairy products.
The dairy supply chain, especially for products like milk and yogurt, is highly perishable and requires proper refrigeration at every stage of distribution. Maintaining cold chain logistics is critical to ensuring that products reach consumers in a fresh and safe condition, but this can be challenging, particularly in rural and remote areas.
The dairy market is highly sensitive to price fluctuations caused by factors such as rising feed costs, weather conditions, and global market dynamics. These fluctuations can directly impact both farmers' earnings and consumers' purchasing power, leading to uncertainty within the market.
There is a rising demand for organic and eco-friendly dairy products as consumers become more environmentally conscious. Market players who invest in sustainable farming practices, such as reducing water waste and methane emissions, are likely to gain a competitive advantage, especially in premium market segments.
The demand for lactose-free and plant-based dairy alternatives is growing, both in India and internationally. Developing products that cater to lactose-intolerant consumers and those seeking dairy substitutes represents a lucrative growth opportunity for companies.
India has made significant inroads into the global dairy market, exporting products such as buffalo milk, skimmed milk powder, and ghee. Expanding export channels can help Indian dairy companies tap into new revenue streams and gain international recognition.
The North region of India holds a significant share of the dairy market, with a large population that consumes milk and milk-based products as dietary staples. Urban centers in North India are seeing increased demand for packaged and value-added dairy products, while rural areas continue to rely heavily on traditional dairy consumption patterns.
The South has emerged as a key region for dairy innovation, with a growing market for probiotic drinks, flavored yogurt, and processed cheese. The region is also known for its production of ghee and butter, which are widely consumed across India.
Dairy consumption in the East and West is diverse, with a mix of traditional and modern dairy products. The East is known for its dairy-based sweets, while the West has seen an increasing demand for premium dairy products like cheese and yogurt, particularly in urban areas.
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Some of the key players in the India dairy products market include:
These companies play a critical role in shaping the dairy industry by investing in product innovation, expanding their distribution networks, and adopting advanced processing technologies.
The India dairy products market is poised for continued growth, driven by increasing health consciousness, urbanization, and technological advancements.
Despite challenges related to quality control, supply chain management, and sustainability, the market presents numerous opportunities for growth and innovation. Expanding product offerings to include lactose-free options, value-added dairy products, and sustainable farming practices will allow market players to tap into evolving consumer preferences and strengthen their competitive positions both domestically and internationally.
With a projected CAGR of 6.3%, the market is set to play a pivotal role in the Indian economy, providing both nutritional sustenance and economic opportunities across the country.
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