Milk rules but exports lag: 2026 could change India’s dairy game
Despite being among the world’s largest milk producers, India remains a marginal player in global dairy trade. 2026 could mark a turning point—if quality, branding, and compliance gaps are addressed.
Dear reader, as 2025, a year of global tumult and volatility, rolls by, Mint's reporters and columnists look around the corner on what is coming in 2026—to help you know what to expect and prepare for it. Tell us what you think at feedback@livemint.com.
India has the milk but not the export muscle.
That imbalance has defined its dairy sector for years: a country that is among the world’s largest milk producers, yet remains a marginal player in global dairy trade. Its presence in international markets is still tiny, concentrated in a narrow set of products and constrained by gaps in quality, compliance, cold chains, and branding.
Yet 2026 arrives at a moment when this long-standing mismatch is at an inflexion point. Dairy exports jumped sharply in FY25, scaling $490 million with volumes rising to over 113,350.4 tonnes—up from about $273 million and 63,738.47 tonnes a year earlier, as per data from Agricultural and Processed Food Products Export Development Authority. Projections by the ministry of dairy and fisheries show India’s share in global milk supply rising to 32% in FY26 from 25% in FY25, underlining that production is no longer the constraint.
A smaller but symbolic shift is appearing in value-added products. Mint reported on 25 November that India is emerging as an unexpected player in the global mozzarella market, with exports rising to $2.29 million in FY25 from $0.71 million in FY24 and nil in FY23, according the commerce ministry. Shipments reached $3.29 million between April and September 2025—an over 1,200% year-on-year jump—even if overall volumes remain modest.
And, perhaps, the most important step in this direction is that dairy brand Amul started selling its Amul Gold homogenized milk in gallon (3.78 litre) packs at US retail giant Costco in October last year.
India’s exports of FY25 signal a turning point, said an expert. "The real opportunity lies in scaling it further in consonance with the India’s position as the largest producer of milk by building and exporting higher-value, processed dairy products such as ghee, SMP, cheese and whey, rather than raw or low-value outputs," said Avinash Chandani, partner at audit and consultancy firm Deloitte India. (SMP is short for skimmed milk powder.)
The constraints
Chandani noted that Asia produces nearly half of the world’s milk, with India accounting for about a quarter of global output. Total milk production in the country is estimated as 247.87 million tonnes during FY25, with output in FY26 estimated at 260 million tonnes, per esimates of the Indian Dairy Association.
But the export gap remains stark. “While Asia commands only 4% of global dairy exports, India’s share is more abysmal proportionately at 0.25%. In contrast, Oceania captures almost 30% of exports with just 4% of production. This gap highlights India’s under-leveraged export potential," Chandani said.
The top five destinations for Indian dairy exports are United Arab Emirates, Saudi Arabia, the US, Bhutan, and Singapore.
Industry experts argue that India’s challenge is not supply but export readiness. Despite FY25’s 80% growth, the basket remains narrow, with ghee and butter accounting for nearly three-fifths of shipments.
“The next phase must focus on diversifying into high-value products such as milk proteins and other milk solids such as milk powders, lactoferrin, infant nutrition ingredients, and functional dairy," added Chandani.
Making India competitive
Analysts say India can scale exports sustainably only by shifting from volume-led growth to quality-led differentiation. That requires a stronger brand identity, deeper processing capabilities and consistent compliance with global standards.
“There is need to prioritize branding that promotes Indian specialties, pack design and shelf-life enhancements, and consistent quality and certification. Also, it is essential to invest in cold-chain logistics, bargain with target markets for hygienic recognition, and assist exporters with trade facilitation and market research," said Ajay Kakra, who leads food and agriculture, among other sectors in India at consultancy Forvis Mazars.
Experts also emphasise the need for globally accepted certifications, mandatory traceability from farm to port, and stronger positioning of buffalo-milk-based products, including ghee, butter oil, and dairy fats, in premium and ethnic segments.
The outlook for Indian dairies remains cautiously optimistic. While urban demand for categories such as ice cream, flavoured milk, yogurt and organic milk is rising, India’s share in global dairy trade remains work in progress.
India despite holding about 24% share in the world's milk production remains a marginal exporter in global milk trade of over $33 billion (as of 2024). "Aligning with global quality norms, improving productivity, and enhancing processing depth can unlock export opportunities in West Asia, Africa and Southeast Asia," said Satyam Shivam Sundaram, partner, government and public sector, at consultancy EY India.
According to Sundaram, 2026 could mark India’s transition toward a more premium, competitive, value-driven dairy economy, if supported by science-based breeding, expanded silage (feed), disease control, digital traceability and a targeted national dairy mission to drive “white revolution 2.0".
Forvis Mazars's Kakra noted a niche but growing market for value-added dairy exports. Stronger cold chains, expanded processing capacity, and targeted marketing of products like ghee, whey and UHT milk will likely deliver steady growth. “How soon manufacturers and exporters can fulfil stringent quality and packaging requirements will determine the pace," he said. UHT refers to ultra high temperature treatment of milk to sterlize it.
The way forward
Experts outline two pivots for India’s dairy exports.
First, a shift from production strength to compliance strength—through export-grade processing, rigorous quality and residue standards, resilient cold chains and robust traceability.
Second, a move from scattered exports to strategic markets. India ships to more than 130 countries, but must now build focused corridors in high-growth regions such as West Asia, the Asean region, and Africa.
“For India, 2026 is not about exporting more milk—it is about exporting compliant milk, trusted brands, and globally acceptable products to the right markets," added Deloitte's Chandani.
topics
