Dairy Industry in India

Dairy Industry in India Market Size and Share:

The dairy industry in India market size was valued at INR 18,975 Billion in 2024. Looking forward, IMARC Group estimates the market to reach INR 57,001.81 Billion by 2033, exhibiting a CAGR of 12.35% during 2025-2033. Uttar Pradesh dominated the market in 2024, holding a market share of over 18.7%. The market is experiencing robust growth, propelled by technological innovation, enhanced retail and e-commerce platforms, and improved cold chain infrastructure, meeting rising consumer demand with a diversified and quality-focused product range.

The growth of dairy industry in India is underpinned by a variety of factors. The industry significantly supports the rural economy of the country. Increasing population and a growing middle class are among the most important aspects, which ultimately increase demand for milk, curd, and other dairy products. A strong rural backbone of millions of small-scale dairy farmers backs production and supply chain. The government induces dairy development with incentives and also provides subsidy for dairy farming. New technologies, such as modern dairy farming, automatic milking systems, improve efficiency and quality of production. Organized retailing and e-commerce platforms have improved the availability of dairy products. Furthermore, health-conscious consumers are propelling the demand for specialized dairy products like low-fat or organic milk.

Another significant pillar of strength for the Indian dairy industry is its robust production of milk. India has the distinction of being the largest milk producing country in the world, with Uttar Pradesh, Rajasthan and Gujarat in the lead. Furthermore, increasing focus on enhancing genetic quality of animals, along with better veterinary care, is improving quantity and quality of milk production. Increased per capita income and changing lifestyles influence the consumer preferences and have created a trend towards packaged, branded and convenience products. Its continuous expansion further derives from diversifications in the industry into niche segments such as flavored milk, cheese and ready-to-drink beverages. With increasing urbanization and consumer preference turning towards healthier and higher-protein foods, the dairy sector is ready to grow further, benefiting both the economy and nutritional health of the populace.

Dairy Industry in India Market Trends:

Changing Distribution Channels and Emergence of B2C Startups

A significant trend reshaping the India dairy market outlook is the evolution of distribution channels, particularly with the emergence of Business-to-Consumer (B2C) startups. These startups often leverage digital platforms for direct delivery. With the rise of e-commerce and online grocery shopping, many new-age dairy startups are offering subscription-based models, home delivery services, and digitally enabled supply chains. According to India Brand Equity Foundation, India's e-commerce platforms achieved a significant milestone, hitting a gross merchandise value (GMV) of USD 60 Billion in fiscal year 2023, marking a 22% increase from the previous year.​​ This approach not only ensures freshness and quality but also caters to the convenience sought by modern consumers. These startups often focus on premium, organic, or specialized dairy products, differentiating themselves from traditional retail channels. By using data analytics and consumer insights, these B2C startups are able to understand consumer preferences and offer personalized services. This shift is not only changing consumer buying habits but also impacting market share, forcing traditional players to rethink their distribution strategies.

Technological Advancements in Dairy Processing

Technological innovations are playing a crucial role in transforming the dairy industry. This includes advancements in dairy farm management, milk processing, packaging, and supply chain logistics. Technologies like automation, Internet of Things (IoT), and artificial intelligence (AI) are being employed to enhance efficiency, improve product quality, and ensure safety. For instance, the IoT market in India is expected to grow from USD 1.4 Billion in 2024 to USD 3.6 Billion by 2033. These technologies also aid in better farm management practices, allowing for higher productivity and sustainability. Additionally, the adoption of cold chain technologies ensures that dairy products retain their freshness, nutritional value, and size consistency during transportation and storage.

Shift Toward Value-Added Dairy Products

There is a significant shift toward value-added dairy products like cheese, yogurt, flavored milk, and probiotic drinks. These products offer greater margins and cater to the evolving consumer preferences for health, convenience, and variety. The demand for these products is being driven by increasing health awareness, rising middle class, and changing dietary habits. For instance, as per industry reports, the middle class now represents 31% of India’s population. It is projected to hit 38% by 2031 and 60% by 2047. Dairy companies are investing in new product development and marketing strategies to capture this growing segment, diversifying beyond traditional milk products in the market.

Dairy Industry in India Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the dairy industry in India, along with forecasts at the regional, and country levels from 2025-2033. The market has been categorized based on product type.

Analysis by Product Type:

• Liquid Milk
• UHT Milk
• A2 Milk
• Organic Milk
• Flavored Milk
• Curd
• Lassi
• Butter Milk (Chach)
• Flavored and Frozen Yoghurts
• Cheese
• Probiotic Dairy Products
• Table Butter
• Ghee
• Paneer
• Khoya
• Dairy Whitener
• Skimmed Milk Powder
• Ice Cream
• Dairy Sweets
• Cream
• Whey
• Milk Shake
• Sweet Condensed Milk

Liquid milk stands as the leading product type with a market share of 65.3% in 2024. This can be attributed to its critical role in daily consumption and high nutritional value as a staple food. Its consistent demand is further fueled by its integration into numerous traditional Indian recipes and the daily diet of majority of the population. Additionally, government support through subsidies and the development of cooperative dairy models have enhanced accessibility and affordability across diverse regions. The country, being the largest milk producer globally, sees a substantial portion of its dairy sector focused on liquid milk production. The significant contribution of private dairy enterprises, which constitute around 60% of the dairy processing capacity in India, have further cemented liquid milk's position as the dominant product in the market.

On the other hand, A2 milk is rapidly emerging as one of the fastest-growing segments in the dairy industry, primarily driven by consumer beliefs about its health advantages and superior protein content over conventional milk. This type of milk, sourced from cows producing the A2 beta-casein protein, is purported to be easier to digest and less likely to cause inflammation, contrasting with the A1 protein common in regular milk. Despite a lack of definitive scientific backing, A2 milk is being marketed as a healthier, more natural alternative, resonating with health-conscious consumers. Its market growth is further fueled by rising income levels and increased awareness of its nutritional benefits, leading to a significant demand spike, and enabling it to command premium prices in the market.

Regional Analysis:

• Karnataka
• Maharashtra
• Tamil Nadu
• Delhi
• Gujarat
• Andhra Pradesh and Telangana
• Uttar Pradesh
• West Bengal
• Kerala
• Haryana
• Punjab
• Rajasthan
• Madhya Pradesh
• Bihar
• Orissa

In 2024, Uttar Pradesh accounted for the largest market share of 18.7%. It is the most populous state with a strong agrarian economy and has the highest number of dairy animals in the country. It has the highest contribution in terms of overall milk production due to its highly efficient dairy sector bolstered by government initiatives and support-built networks of milk cooperatives and a very effective procurement and distribution system. Since the state has a huge demand for dairy products, investments are being made in milk processing plants. Small and marginal dairy farmers mostly contribute to the industry. Further, with the growing population and increasing disposable incomes within the state, spending on milk and associated products has increased. The market is further enhanced by increased consumption of value-added dairy products.

Delhi is rapidly advancing as the leading regional market in India's dairy sector, propelled by the city's expanding population. Coupled with high income levels and a cosmopolitan lifestyle, the rising number of consumers is significantly driving the demand for a diverse range of dairy products. Urbanization in Delhi has led to a preference for convenience foods and value-added dairy products like cheese, yogurt, and flavored milk. Robust distribution networks and a growing retail infrastructure are key contributors to its high dairy consumption rates. Additionally, the presence of health-conscious consumers in Delhi is boosting the demand for premium segments, such as organic and fortified dairy products. Delhi's status as India's capital and a political hub attracts considerable foreign and domestic investment. Its strategic location and strong infrastructure, combined with a substantial consumer base and high disposable income, render it an attractive market for businesses. The city's economy is experiencing rapid growth, reflecting its dynamic development and economic expansion.

Key Regional Takeaways:

Uttar Pradesh Dairy Industry Analysis

With the ever-increasing population, the consumption of milk and its products has seen a dramatic leap in Uttar Pradesh, affecting both urban and rural settings. Reports indicate that the population of Uttar Pradesh is projected to reach 241.27 million or 24.13 crore by July 1, 2025. The consumer demand continues to create a huge impetus for investing into dairy farms and processing units that actively enhance the supply chain. Small farmers’ participation is increasing in cooperative models. Cold storage and distribution networks have made great advances, ensuring product availability with changing dietary patterns. The increase in nutritional awareness towards dairy further stimulates diversification toward value-added products. Government schemes both for cattle and for producers of milk ensure economic stability. Furthermore, infrastructure development strengthens accessibility in favor of dairy products to the level of a staple in daily consumption habits.

Rajasthan Dairy Industry Analysis

Rajasthan has been witnessing rising adoption of dairy products with increasing disposable incomes, and thereby a greater demand for value-added dairy products. Ministry of Statistics & Programme Implementation states that Rajasthan's Per Capita Income in rupees was 1,15,122 in 2020-21, 1,35,962 in 2021-22, and 1,56,149 in 2022-23. More and more consumers move toward value-added products, such as flavored milk, cheese, and yogurt. Increasing urbanization leads to varied dietary needs, triggering investments in state-of-the-art dairy processing plants. Increased private sector investment speeds up production efficiency, maintaining stable supply chains. The deployment of innovative packaging increases product lifespan, addressing changing consumption patterns. Improved cold storage logistics enhance access to the market. Cooperative participation by farmers stabilizes milk prices. Increasing dairy exports provide highly profitable opportunities, supporting economic development in the area.

Karnataka Dairy Industry Analysis

Karnataka is experiencing rising adoption of dairy products based on the emergence of e-commerce and online purchasing of groceries, revolutionizing the landscape of the dairy supply chain. For example, in Tier I cities, Bengaluru ranks first in terms of inhabitants spending up to 4 hours and 2 minutes per week online shopping. Online platforms make it easy for consumers to get access to fresh and packaged milk and dairy products, thus driving consumer convenience. Deepening internet penetration bolsters direct-to-consumer transactions, increasing the availability of dairy products. Subscription formats fuel repeated purchase behavior, generating consistent market growth. Innovative developments in logistics and storage increase delivery efficiency and reduce wastage of products. Dairy startups utilize digital platforms to roll out innovative products, in keeping with dynamic demand. Fortification of digital payment infrastructure generates smooth transactions, thereby driving trends in dairy consumption within the state further.

Gujrat Dairy Industry Analysis

Increased demand for dairy products in Gujarat is driven by rising investments and government encouragement in the dairy sector of the state, which supports growth in milk procurement, processing, and value-added dairy segments. For example, the emphasis of Gujarat on animal husbandry has helped the state's population thrive, as 3.6 million milk producers as a group are paid Rs 200 crore every day by the Gujarat Cooperative Milk Marketing Federation (GCMMF). Large dairy cooperatives and private companies are investing in infrastructure, applying sophisticated technology in processing, and improving cold chain logistics to satisfy increasing consumer demand. The increase in investments facilitates diversification into value-added dairy products such as flavored milk, probiotic yogurt, and cheese that match changing food habits. Government subsidies and industry partnerships also reinforce Gujarat's status as a dairy hub, guaranteeing sustained growth in dairy product availability and accessibility in domestic and export markets.

Madhya Pradesh Dairy Industry Analysis

Madhya Pradesh is witnessing fast-paced adoption of dairy products owing to the emerging food processing industry, driving raw milk and value-added demand. Madhya Pradesh Industrial Development Corporation Ltd. reports that 70+ large & 3800+ MSMEs units are operating in the food processing industry. Increasing number of dairy-based processing plants induce large-scale procurement from farmers in the area, stabilizing milk supply chains. The increased use of dairy ingredients in confectionery and bakery industries fuels steady market expansion. Improvements in automation optimize processing efficiency, reducing costs of production. Increasing research efforts stimulate innovation in dairy formulation, aligning with changing consumer needs. Expansion of cold storage reduces risks of spoilage, extending the shelf life of products. Government assistance in dairy entrepreneurship stimulates industrial development, making the state a leading dairy center.

Competitive Landscape:

Major players in the Indian dairy industry are involved in several initiatives for further growth and consolidation of their market positions. Amul, Mother Dairy, and Britannia have heavily invested in improving the supply chain, enhancing production efficiencies, and expanding product lines. For instance, Amul has focused on developing a cold chain infrastructure that accommodates the transportation of all its fresh dairy products to the consumers in both rural and urban areas. They adopted technology for traceability and quality improvement along with enhanced standards of milk production and processing. In a similar vein, Mother Dairy has done considerable work toward improving its direct procurement model, enabling farmers to engage closely with the supply chain and providing training to improve milk quality. Players are also focusing on the production of value-added products like flavored milk, cheese, and yogurt. With changes in consumer preferences toward convenience and nutrition, the demand for such products has risen. Furthermore, firms have been improving their distribution systems, targeting new markets, and collaborating with online platforms. Heavy investments in fair sourcing methods and sustainability projects, including assistance for the dairy farmer communities, are also increasingly favored among large industry players, which complements the growth of the industry.

The report provides a comprehensive analysis of the competitive landscape in the dairy industry in India market with detailed profiles of all major companies, including:

Dairy Cooperatives:

• Gujarat Co-operative Milk Marketing Federation Ltd
• Mother Dairy Fruits & Vegetables Pvt Limited
• Karnataka Co-operative Milk Producers Federation Limited
• Rajasthan Cooperative Dairy Federation Ltd (RCDF)
• TamilNadu Cooperative Milk Producers Federation Ltd (TCMPF)
• Punjab State Cooperative Milk Producers Federation Ltd (MILKFED)
• Orissa State Cooperative Milk Producers Federation Ltd (OMFED)
• Maharashtra Rajya Sahakari Dudh Mahasangh Maraydit (Mahasangh)
• Bihar State Co-operative Milk Producers Federation Ltd. (COMFED)
• Haryana Dairy Development Cooperative Federation Ltd. (HDDCF)
• Madhya Pradesh State Cooperative Dairy Federation Ltd. (MPCDF)
• Pradeshik Cooperative Dairy Federation Ltd (PCDF)

Private Dairies:

• Nestle India Limited
• Hatsun Agro Product Limited
• Tirumala Milk Products Pvt Ltd.
• Milk Food Limited
• Heritage Foods India Limited
• VRS Foods Limited
• Bhole Baba Dairy Industries Ltd.
• Kwality Ltd.
• Sterling Agro Industries Limited
• Parag Milk Foods Limited
• SMC Foods Limited

Latest News and Developments:

• January 2025: Hatsun Agro Product Ltd (HAP) acquired Milk Mantra Dairy Pvt. Ltd. for ₹233 crore (USD 26 Million), making it a wholly owned subsidiary. This acquisition strengthens HAP’s presence in eastern India, particularly Odisha, with expansion plans for West Bengal and northern Andhra Pradesh. Milk Mantra’s brands, including Milky Moo and Moo Shake, will join HAP’s portfolio. In FY24, Milk Mantra reported a net profit of ₹9.8 crore (USD1.13 Million).
• November 2024: Nandini Dairy, Karnataka's cooperative brand, entered the Delhi-NCR market with competitive pricing. Launched by CM Siddaramaiah, it offers four cow milk variants, curd, and buttermilk at lower rates than Mother Dairy and Amul. Prices start at Rs 55 per litre for toned milk, with curd at Rs 74 per kg. The move aims to expand Nandini Dairy’s presence beyond Karnataka.
• November 2024: Farmery introduced fresh A2 cow milk in eco-friendly glass bottles, enhancing dairy choices for consumers. Priced at ₹120 per litre, the farm-to-table product supports sustainability. The premium milk is now available in the New Delhi National Capital Region. This launch aligns with growing demand for high-quality dairy options.
• October 2024: Britannia Bel Foods inaugurated a ₹220 crore cheese plant near Pune, producing 10,000 tonnes of The Laughing Cow cheese. The facility is integrated with Britannia's dairy operations, sourcing milk from 3,000+ local farmers. This strengthens India's dairy sector and expands premium cheese offerings.
• May 2024: Amul is set to launch high protein "super milk" and organic spices next week. The new milk variant will contain 35 grams of protein per glass, significantly higher than regular toned and full-cream milk. This launch aims to cater to health-conscious consumers seeking high-protein dairy options. Alongside, Amul is expanding into organic spices, reinforcing its commitment to quality and innovation in the food industry.

Dairy Industry in India Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the dairy industry in India market from 2019-2033.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the global dairy industry in India market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's Five Forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the dairy industry in India industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.