India’s Dairy Revolution: Is AMF the Key to Unlocking Global Dairy Export Potential?

India’s dairy sector shows significant potential with a production of 247.87 million tonnes of milk in the 2024-25 fiscal year, accounting for nearly a quarter of the global output. Despite this impressive figure, India’s milk exports remain meager, constituting less than 1 percent of production, primarily focused on ghee and butter, with a total export value of approximately $330 million in 2024. The primary challenge lies in structural issues, including a lack of competitiveness due to stringent food-safety regulations, limited access to international markets, and a trading model that is overly reliant on domestic consumption rather than strategic exportation.

For the average citizen, these constraints result in abundant domestic supply but limited opportunities for consumers to benefit from lower prices or a wider variety of dairy products. Markets will likely experience a continued reliance on local supply with minimal foreign influence, which could keep domestic prices stable but may lack competitive pricing in the international arena. Optimistically, the focus on exporting value-added products like ghee to regions such as the Gulf and Bangladesh can lead to job creation and improved livelihoods for farmers, enhancing food security.

Looking ahead, India’s dairy policy must pivot towards optimizing the surplus for export, particularly by developing specialized products like neutral AMF and establishing bonded zones to streamline processing and export logistics. This strategy necessitates a comprehensive overhaul of the existing trading framework to create sustainable export channels, especially targeting regions with favorable trade dynamics like Southeast Asia and North Africa. By developing its unique geographical advantages and enhancing processing capabilities, India can pave the way for more robust international positioning in the dairy market and boost economic growth over the long term.

Source: The Hindu

(Expert Note: This report was independently prepared by the Wealthova Economy team.)