Sector

Dairy Sector

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INDIA SCENARIO

India’s Milk Production

  • India is the world’s largest milk producer, contributing 24.64% of global production in 2021-22.
  • Milk production increased to 230.58 million tonnes in 2022-23, growing at a CAGR of 5.85% over the past 9 years.

Top Milk-Producing States

  • Rajasthan, Uttar Pradesh, Madhya Pradesh, Gujarat, and Andhra Pradesh together account for 53.11% of total milk production.

Dairy Exports

  • India exported 67,572.99 metric tonnes of dairy products worth $284.65 million in 2022-23.

Infrastructure Investment

  • Dairy sector growth requires investment in processing, chilling, logistics, and cattle feed.
  • Opportunities exist in value-added dairy products, organic/farm-fresh milk, and exports.

Government Incentives

  • Animal Husbandry Infrastructure Development Fund (AHIDF):
  • Offers financial support for setting up new units or expanding existing ones.
  • Benefits include interest subvention, moratorium, and credit guarantee.
  • Infrastructure gap of 120 - 130 MMT with investment potential of $18-20 Bn
  • Market for butter and spreads is predicted to grow at an 8%, CAGR to $4.2 Bn by 2026.
  • Dairy is the single largest agricultural commodity contributing 5% of the national economy, witnessing 6.4% (CAGR) in the past 5 years.
  • 0MnLitres/dayMILK PROCESSING CAPACITY
  • 0MnPEOPLE ARE EMPLOYED IN THE DAIRY INDUSTRY
  • 0%INDIA'S CONTRIBUTION IN GLOBAL, MILK PRODUCTION

UTTAR PRADESH SCENARIO

  • Home to the dairy capital of North India: Bulandshahr.
  • U.P.’s low processing levels of 10% vis-à-vis India avg. of 17% presents immense opportunity for investment
  • Establishment of 6 Dairy Complexes to make use of complete livestock ecosystem- production, processing, and waste management- and increase commercial milk production by farmers

DOMINANT INDUSTRY FORCES

KEY DEVELOPMENT IN THE INDUSTRY

  • U.P. govt. launched the Dairy Policy 2022 to increase milk processing levels, and improve quality and access to animal nutrition and feed
  • Investor Support Cell within Dairy Development Department for investor handholding through approvals and grievances.
  • Single window approach for investment
  • Launch of Nivesh Sarathi (Investor Relationship Mgmt. System)

High Production Districts in UP

Top 5 Dairy Producing Districts
City Share (%)
Bulandshahar 5.0%
Meerut 2.8%
Agra 2.8%
Aligarh 2.7%
Saharanpur 2.5%

POLICIES & SCHEMES

Key Policy Highlights

  • Capital investment grant to establish or expand (minimum 25% increase in existing capacity) milk processing or milk product manufacturing units : Cover 10% of cost of machinery, spare parts, civil works, up to Rs. 5 crore
  • Interest subvention to establish new milk processing and milk product manufacturing dairy unit : Rs. 10 crore support at rate of 5% or less for a max. period of 5 years
  • Interest subvention to establish new animal feed and animal feed product manufacturing unit : Rs. 7.5 crore reimbursement admissible support at rate of 5% or less for a max. period of 5 years
  • Interest subvention to establish cold chains : Rs. 1 crore support at rate of 5% or less for a max. period of 5 years for Refrigerated/ Insulated van / Road Milk Tanker, Bulk Milk Cooler, or Ice Cream Trolley
  • Reimbursement of electricity duty paid by new milk processing units within a period of 10 years.

Other Incentives

  • Other incentives : Stamp duty reimbursement, Patent/Design Registration fee reimbursement, Interest subvention for expansion unit, Interest subvention for new technology/ technology upgradation, Interest subvention on manufacturing of value-added milk products and Transport subsidy on export.

KEY INVESTMENT OPPORTUNITIES


Nivesh Sarathi Nivesh Mitra