Dairy Development and Milk Products Promotion Policy, 2022 provides capital subsidies, interest reimbursement and export assistance to eligible dairy businesses
LUCKNOW: Uttar Pradesh’s Dairy Development and Milk Products Promotion Policy, 2022 provides a range of financial incentives to encourage investment in dairy processing, value-added milk products, cattle-feed manufacturing and supporting infrastructure.
Issued on 17 October 2022, the policy has a stated validity period of five years and is administered by the state’s Dairy Development Department. Its primary focus is on strengthening processing capacity, promoting value addition and improving infrastructure across the dairy supply chain.
Eligible activities include manufacturing milk, cheese, butter, ghee, paneer, curd, milk powder and ice cream, as well as cattle-feed production, milk collection, quality testing, cold-chain facilities and refrigerated transportation.
Capital investment subsidy of up to ₹5 crore
The policy provides a capital investment subsidy of 10% of eligible investment, subject to a maximum of ₹5 crore, for qualifying new dairy-processing and milk-product units and eligible expansion projects.
Eligible expenditure may include plant and machinery, technical civil works, approved spare parts and other assets accepted by the competent authority.
Land, working capital, used machinery, routine administrative expenses and expenditure outside the permitted period are not automatically eligible.
For expansion projects, installed capacity generally must increase by at least 25%. Routine maintenance, ordinary repairs and replacement of worn-out equipment do not qualify as expansion simply because additional expenditure has been incurred.
Interest reimbursement for dairy and allied industries
Eligible projects may receive interest support calculated at 5% or the actual eligible interest rate, whichever is lower, for up to five years. The applicable ceiling depends on the project category.
| Project category | Maximum assistance stated in the supplied policy details |
|---|---|
| New milk-processing or dairy-product unit | ₹10 crore |
| New cattle-feed or animal-nutrition plant | ₹7.5 crore |
| Approved technology upgrades | ₹2.5 crore |
| Milk collection, quality control or traceability equipment | ₹1 crore |
| Eligible cold-chain infrastructure | ₹1 crore |
| Qualifying micro and small value-added units | Up to ₹2 crore |
Separate ceilings also apply to eligible expansion projects, with maximum assistance of ₹2.5 crore or ₹2 crore depending on the category.
Interest reimbursement is subject to the applicable eligibility conditions, loan-servicing records and documentary verification. It does not cover repayment of the principal amount borrowed.
Support for cold-chain and milk-quality infrastructure
The policy covers eligible investments in infrastructure such as bulk milk coolers, road milk tankers, refrigerated vehicles and equipment for milk collection, quality testing and traceability.
These facilities can help businesses maintain milk quality, improve procurement operations and strengthen the movement of perishable dairy products from collection centres to processing plants and markets.
Assistance remains subject to project eligibility, prescribed documentation and the applicable financial ceilings.
Stamp duty, electricity duty and certification support
Additional incentives are available for qualifying units and enterprises:
- Stamp duty: Reimbursement of eligible stamp duty on land purchased or leased for an approved unit, subject to applicable conditions.
- Electricity duty: Reimbursement for up to 10 years for eligible new milk-processing units. Normal electricity charges and non-exempt fees remain payable.
- Certification and testing: Eligible small and medium-sized enterprises may receive reimbursement of 50% of approved fees, capped at ₹5 lakh.
- Patent and design registration: Reimbursement of 75% of eligible fees, subject to a maximum of ₹5 lakh.
Businesses must satisfy the relevant enterprise classification, approval and documentation requirements before claiming these benefits.
Export assistance for dairy products
The policy also provides financial support for eligible manufacturers seeking to expand into overseas markets.
| Export support | Assistance described in the supplied policy details |
|---|---|
| Inland transport to an airport or seaport | 25% of eligible costs, up to ₹20 lakh annually for three years |
| Approved air or sea shipments | 20% of FOB value, up to ₹40 lakh annually for three years |
| Overseas product samples | 50% of eligible costs, up to ₹5 lakh |
Claims may require invoices, shipping bills, transport records, bank documentation and proof that the products were manufactured in Uttar Pradesh. All reimbursements remain subject to the policy’s detailed conditions.
Training and technical capacity building
The policy includes training provisions covering clean milk production, breed improvement, dairy technology, milk procurement, quality control, financial and technical management, and value-added product manufacturing.
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Potential participants include milk producers and employees or managers associated with eligible micro and small dairy enterprises, farmer-producer organisations, milk-producer companies and cooperatives.
Such programmes can support improvements in technical skills, milk-handling practices and the management of dairy-processing operations.
Approval requirements and implementation
Applicants must comply with the policy’s implementation rules and obtain the statutory approvals relevant to their projects. Depending on the activity, these may include food-safety licences, pollution-control consent, factory and labour registrations, fire and building clearances, legal-metrology registration, and permissions relating to electricity, water, feed and waste management.
Projects may also be subject to technical and financial appraisal, verification of eligible investment, completion of commercial-production requirements and physical inspection by the competent authorities.
Policy status and opportunities for dairy investors
The policy framework offers potential support for entrepreneurs planning dairy-processing plants, value-added product lines, cattle-feed facilities and cold-chain infrastructure in Uttar Pradesh.
However, the incentives described in the policy should not be interpreted as automatic payments. Actual assistance depends on eligibility, approvals, implementation requirements and the applicable government orders.
Although the policy and related implementation documents are reportedly listed on official state portals, the supplied material does not establish consolidated figures for applications received, projects approved, subsidies released, new processing capacity commissioned, investment mobilised, exports generated or employment created specifically under the policy.
For prospective investors, checking the latest government orders and obtaining written confirmation of project eligibility before committing capital are important steps.
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