Indian Dairy Association chief R S Sodhi says the sector must control production costs, improve milk quality, and secure export protocols to stay competitive.
India’s dairy sector cannot be treated like an industry of the US, where 25,000 large farms dominate—here it is the livelihood of 80 million small farmers, according to R S Sodhi, President of the Indian Dairy Association. In an interaction with ET Online, Sodhi said global dairy-surplus nations, particularly the US, are pressing for zero-duty access to India’s $150-billion dairy market, a move that could threaten both farmer incomes and food security. He argued that India must focus on cutting production costs through better breeding, feed practices, and veterinary care, while also exploring export opportunities in milk-deficit regions. Excerpts:
ET: Donald Trump’s tariffs have rattled every Indian sector. How exposed is Indian dairy sector, and what are the challenges do you see for it?
R S Sodhi (RAS): Any dairy-surplus country—whether Europe, the UK, New Zealand, Australia, or now the USA—has one clear agenda: to open up the Indian dairy sector at zero duty. Currently, India allows dairy imports from anywhere in the world but applies duties of 30% to 60% on various products. The same is true for these countries, which maintain import duties ranging from 30% to over 100%.
From the US perspective, their demand makes sense. The USA is the second-largest dairy producer, exporting about 20% of its output and providing $10 billion annually in subsidies to support dairy exports. With India being the fastest-growing and largest dairy market, they naturally want access.
From the US perspective, their demand makes sense. The USA is the second-largest dairy producer, exporting about 20% of its output and providing $10 billion annually in subsidies to support dairy exports. With India being the fastest-growing and largest dairy market, they naturally want access.
But the Indian dairy sector is very different. In the US, 25,000 large industrial farms dominate. In India, dairy remains a source of livelihood for 80 million small farmers in rural areas. The real question is whether we should encourage the US dairy industry at the cost of these 80 million livelihoods.
The second issue is food security for India’s 1.45 billion consumers. At present, our imports are negligible. But if we liberalize, we risk repeating the mistake made in edible oil during the mid-1990s, when we shifted from near self-sufficiency to importing 65% of our needs. And dairy is much bigger. India consumes 240 million metric tons annually. Even 10% imports-25 million tons-would disrupt the global market, which is only 100 million tons in size.
Prices would double, threatening not just India’s food security but also that of other Asian countries like Bangladesh, Sri Lanka, Southeast Asia, and even Russia, which rely heavily on imports.
Finally, India’s dairy market is already worth over $150 billion, with equivalent foreign currency earnings. Given these realities, the current policy of promoting local production and growth is the right approach.
ET: Feed accounts for 70% of production cost in livestock. This is huge, so what strategies are you adopting to address this issue?
RAS: In India we have been growing for the last 50 years at about 4.5-5% per annum, and we have to continue at this pace. We also need to ensure that, besides producing, we encourage consumption at an affordable price. At the same time, the farmer who is producing milk must get a fair return for continuing with dairy farming.
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That is only possible if we reduce the cost of milk production-meaning the cost per litre should not rise in proportion to the selling price. This can be achieved by improving the feed conversion ratio: from one kg of feed, we should get more litres of milk. That comes from better breeding and feeding practices for our dairy animals.
Earlier, artificial insemination was common. Now, sex-sorted semen is becoming prevalent. With good-breed cows, you can get 95% female calves, so the issue of disposing of male calves reduces drastically. The second step is hottor fooding practices_steing concentrate food silage or TMR (total mixed rations). And third is veterinary health. Our animals, whether it’s mastitis or FMD, must be properly vaccinated on time at least twice a year for all milk animals.
ET: With tariffs in the backdrop, do you think Indian players need to now tap non-USA markets?
RAS: Definitely. The world dairy trade is about 100 million metric tons, and the way our production is growing, it will multiply three times in the next 25 years just as it has every 25 years in the past. If we want farmers to continue producing milk at a reasonably good price, we must dispose of the surplus in the world market.
Fortunately, India is located amid milk-deficit regions: Sri Lanka, Bangladesh, Southeast Asian countries, the Middle East, Russia, even China-all are deficit countries. To tap these markets, we need to work on three things. First, control the cost of milk production so that we become globally competitive. Second, improve the quality of our milk and enhance processing capacity and efficiency to produce value-added products required by the world market.
Third, establish export protocols with countries like China, Russia, and othe where such frameworks are still missing, and which currently face issues importing dairy from India.
So, cost of production, quality improvement, and export protocols these ar the key areas to work on if India is to become a dairy exporter to the world.
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