GST on dairy products such as ghee is expected to be reduced to 5% from 12% currently.
A reduction in Goods and Services Tax (GST) on dairy products from the existing 12% to 5% could be a game-changer for India’s dairy industry, according to RG Chandramogan, Chairman of Hatsun Agro Product. In an interview with NDTV Profit on Thursday, he said the proposed GST reforms could empower farmers, spur demand and position India as a global dairy export powerhouse. “We could be a world pow
handramogan is hopeful of a positive outcome following Prime Minister Narendra Modi’s announcement on the expected rollout of next-generation GST reforms by Diwali in his Independence Day speech. India is the world’s largest milk producer with an annual milk production of 240 million tonnes. However, its dairy exports remain a mere one million tonnes compared to New Zealand’s 20 million tonnes, which accounts for 35% of the global dairy trade. Chandramogan attributed this gap to heavy taxation, particularly 12% GST on products like ghee.
“World trade is only 60 million tonnes and this is only 25% of India’s production. We were importing French fries. We are now exporters. We have been exporting basmati rice. We can also do it in dairy in a big way,” the top executive said.
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The proposed GST reduction is expected to have a three-pronged impact: better prices for consumers, higher earnings for farmers, and increased export potential.
“The second half of FY26 can be better and the next year can be glorious,” he added. When questioned about the timing of this reform and its connection with ongoing trade negotiations with the United States, he said, “I am doubtful about the US entry of dairy products into India. The type of feeding they do is different and the consumer here is vegetarian and they have their own reservations about any US product.” He identified New Zealand as a more formidable competitor should the domestic market open up further. “New Zealand will be a bigger threat if imports are going to take place. I don’t expect the US to be that. We have farmers in sizeable numbers and we have to protect their interests,” he underscored.Shares of Hatsun Agro Product Ltd. closed 0.27% lower at Rs 910 apiece on the NSE on Thursday. In comparison, the benchmark Nifty50 settled 0.13% higher at 25,083.75.
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