Growth in Dairy Sector must Focus on Inclusivity and Sustainability
I had the honor of participating in the recent Board of Trade (BoT) meeting in Mumbai, chaired by the Hon'ble Union Minister of Commerce and Industry, Shri Piyush Goyal ji. The BoT, an advisory body established by the Government of India, plays a key role in promoting international trade and strengthening India's competitiveness in global markets. It serves as a vital platform for dialogue between the government and various stakeholders, including industry leaders, exporters, trade bodies, and officials.
During the meeting, the Indian Dairy Association (IDA) submitted a detailed note outlining our Strategic Priorities and Recommendations aimed at boosting India's dairy exports and unlocking the sector's potential in the global market.
As India stands tall as the world's largest milk producer, contributing an impressive 24% of global production, the paradox remains that our share in global dairy exports is a meagre 0.25%. While India's dairy sector has consistently powered the livelihoods of millions, propelled nutrition, and contributed significantly to the agricultural economy, its potential on the international stage remains largely untapped. In the fiscal year 2023-24, India's dairy exports stood at 67,580 metric tonnes, valued at Rs. 2,300 crores (USD 280 million). This is a fraction of the global dairy export market, which touched USD 107 billion in the same period.
Looking ahead, the global dairy landscape is projected to grow by 30% by 2030 and 45% by 2047. However, India's domestic demand is unlikely to absorb this increase, and we are staring at a surplus of nearly 100 million metric tonnes (MMT) of milk in the next 25 years. Valued at around USD 40-50 billion, this surplus presents both a challenge and an unparalleled opportunity. To ensure sustainable prices for our dairy producers and to fully capitalize on this potential, it is essential that we adopt an export-oriented strategy.
While Indian dairy plants maintain high standards, the lack of internationally recognized certifications-such as those from the European Union or the USDA-remains a significant barrier. Accelerating the process of acquiring these certifications will unlock access to premium markets in Europe, North America, and beyond.
India's cold chain logistics need a major overhaul to support dairy exports. Investments in refrigerated transport, efficient port handling, and streamlined customs processes will help reduce costs and boost competitiveness in the global market.
The future of India's dairy exports lies not just in raw milk powder or bulk commodities but in value-added products like cheese, yogurt, paneer, and lactose-free milk. Additionally, products like buffalo ghee and mozzarella cheese, with their distinct taste profiles and nutritional benefits, hold significant promise for positioning Indian dairy as a premium global brand.
Trade negotiations are a cornerstone of building India's dairy export prowess. Free Trade Agreements (FTAs) with key dairy-importing nations can reduce tariffs and open up new markets, particularly in regions like the Middle East, Africa, and ASEAN. Additionally, governmentbacked financial incentives such as interest subsidies, tax rebates, and export promotion schemes tailored to the dairy sector can provide the much-needed impetus for scaling exports.
Recently, the Food Safety and Standards Authority of India (FSSAI) issued a notification related to A1 and A2 milk. This notification sparked widespread discussion, but FSSAI withdrew it the very next day. This swift withdrawal indicates the complexity and sensitivity of the issue. It also underscores the need for more comprehensive scientific validation and careful policymaking before drawing any conclusions about A1 and A2 milk in the market.
The Indian Dairy Association (IDA) has always been at the forefront of ensuring that the dairy sector in India grows sustainably and benefits all stakeholders-farmers, consumers, and the industry alike. In recent years, the debate around A1 vs. A2 milk has gained considerable attention, both globally and within India. As a representative body of the dairy sector, it is important for us to address this issue based on scientific evidence, consumer interest, and the economic viability for our farmers.
Understanding the Science Behind A1 and A2 Milk: A1 and A2 refer to the different types of beta-casein proteins found in milk. While both A1 and A2 betacaseins are naturally occurring in cow's milk, A2 milk is said to be easier to digest for some people. This has led to a growing demand for A2 milk, with claims that it offers better health benefits compared to A1 milk, such as improved digestion and reduced risk of certain diseases. However, it is important to note that most scientific research on this subject is still ongoing, and no conclusive evidence yet supports the superiority of A2 milk over A1 milk for the general population.
Implications for the Indian Dairy Sector: India is home to a wide variety of indigenous cattle breeds, many of which naturally produce A2 milk. This presents a unique opportunity for the Indian dairy sector to cater to both domestic and international markets that are increasingly seeking A2 milk. However, we must also consider that a large portion of India's milk comes from crossbred cows that produce a mix of A1 and A2 milk.
It is crucial for us to strike a balance between promoting A2 milk while not creating unnecessary divisions in the market. The promotion of A2 milk should be done in a manner that ensures consumer education, respects farmer livelihoods, and supports the overall growth of the dairy industry.
The Way Forward:
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Scientific Validation: IDA supports further scientific research to validate the health claims associated with A2 milk. Consumers should be provided with clear, factual information to make informed choices based on credible science rather than marketing hype.
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Promoting Indigenous Breeds: India's rich biodiversity in cattle breeds must be preserved and promoted. The government and industry should work together to encourage the breeding of indigenous A2-producing cattle, which can improve farmer incomes while catering to growing market demands.
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Consumer Awareness: Educating consumers about the differences between A1 and A2 milk, along with the nutritional benefits of both, is crucial. Misinformation can create confusion and unnecessary concerns. The Indian Dairy Association (IDA) has addressed this topic multiple times in its publication, Indian Dairyman, to clarify existing misconceptions. Moving forward, the IDA will continue to take a proactive stance in providing transparent information to guide consumers.
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Inclusive Growth: While A2 milk has its market, we must ensure that the majority of our dairy farmers, who produce A1 or mixed milk, are not left behind. The focus should be on improving overall milk quality, herd productivity, and farmer welfare, irrespective of
the type of milk produced.
At IDA, our goal is to ensure that the dairy sector thrives on facts, inclusivity, and sustainability. We are committed to working with all stakeholders to harness the potential of both A1 and A2 milk in a way that benefits everyonefrom farmers to consumers.
The recent controversy surrounding the alleged use of animal fat in the iconic Tirupati Laddus has raised significant concerns about the purity and sanctity of food offerings in temples. As the Indian Dairy Association (IDA), we emphasize the importance of maintaining transparency, rigorous quality standards, and trust in dairy supply chains, particularly when such products are tied to religious sentiments. We urge all stakeholders to ensure that only authentic, high-quality dairy ingredients like pure ghee are used, thus safeguarding both consumer faith and cultural value.