New Delhi, August 3: India has firmly established itself as the world’s largest milk producer, yet its presence in global dairy trade remains disproportionately small. The contrast between record domestic production and modest exports has intensified discussions over whether Free Trade Agreements (FTAs) should continue to shield India’s dairy sector from foreign competition or become a catalyst for transforming it into a globally competitive export industry.
Industry experts argue that the answer lies in striking a balance—protecting millions of dairy farmers in the short term while using FTAs as a strategic tool to drive productivity, quality, infrastructure, and export competitiveness over the long term.
World’s Largest Producer, Small Exporter
India produced 247.87 million tonnes of milk in 2024–25, retaining its position as the world’s largest milk producer. Despite this achievement, the country exports less than 1% of its total milk production, with the overwhelming majority consumed in the domestic market.
The limited export footprint is largely attributed to India’s vast internal demand, fragmented production system, and stringent quality and sanitary requirements in international markets.
No Dairy Concessions in FTAs
Reaffirming the government’s cautious approach, Commerce Minister Piyush Goyal stated in April that India has not offered any tariff concessions on dairy products in its ongoing or concluded FTAs with the European Union, the United Kingdom, Australia, and New Zealand.
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The decision reflects the unique structure of India’s dairy economy, which is sustained by nearly 80 million small and marginal dairy farmers, many owning only two or three animals. Industry stakeholders believe unrestricted imports could adversely affect farmer incomes and rural livelihoods.
Experts Call for Dual Strategy
While maintaining import safeguards remains essential, experts believe India must simultaneously prepare its dairy industry to compete globally.
Former Rupinder Singh Sodhi said India should shift its long-term focus toward improving productivity, quality, efficiency, and international competitiveness.
According to industry leaders, FTAs should be viewed not merely as trade agreements but as an opportunity to accelerate reforms across the dairy value chain, including:
- Enhancing milk productivity through better genetics and nutrition.
- Strengthening food safety and quality assurance systems.
- Expanding modern processing and cold-chain infrastructure.
- Increasing production of value-added dairy products.
- Meeting international sanitary and phytosanitary standards.
Export Potential Remains Significant
India’s dairy sector has witnessed rapid expansion over the past decade, supported by government initiatives such as the National Programme for Dairy Development (NPDD), Animal Husbandry Infrastructure Development Fund (AHIDF), Rashtriya Gokul Mission, and disease-control programmes aimed at improving livestock productivity.
The government’s ongoing efforts to achieve Foot-and-Mouth Disease (FMD)-free status in selected states are also expected to improve access to premium dairy markets, particularly in Europe.
With growing investments in processing capacity, quality infrastructure, traceability systems, and value-added dairy products, industry observers believe India has the potential to evolve from a milk production giant into a globally competitive dairy exporter.
The Road Ahead
Experts emphasise that protecting farmers and pursuing exports are not mutually exclusive goals. Instead, India’s dairy strategy should combine measured protection against unfair imports with aggressive investments in competitiveness, enabling the sector to benefit from future trade opportunities while safeguarding the livelihoods of millions of rural households.
As global demand for high-quality dairy products continues to rise, India’s next phase of dairy growth may depend not only on producing more milk, but on producing milk and dairy products that consistently meet the standards of international markets.
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