Indian dairy sector, serving millions of farmers and consumers, stands at a critical juncture with the proposed implementation of the Front-of-Pack Nutrition Labelling (FoPNL) under the Indian Nutrition Rating (INR) framework. While we commend FSSAI's efforts to enhance consumer health awareness, we must ensure that regulations reflect the unique nutritional characteristics of dairy products and their critical role in India's nutrition and economic ecosystems.

The draft regulation categorizes dairy products under "Solids," aligning them with processed and synthetic alternatives for nutritional rating. Such categorization fails to differentiate between naturally occurring nutrients like saturated fats and lactose-integral to dairy-and their artificially added counterparts. The current methodology places wholesome dairy staples like milk and paneer unhealthy option for consumer, by offering them lower star ratings compared to highly processed alternatives, which is both scientifically unsound and misleading for consumers.

Dairy products are inherently rich in essential nutrientsproteins, calcium, vitamins A,D, and B12 – that support health and well-being. Lactose, often misconstrued as an added sugar, whereas it plays a vital role in calcium absorption and neurological health. Similarly, milk fat contains bioactive components such as Conjugated Linoleic Acid (CLA) and Butyric Acid, recognized for their health benefits. Penalizing these naturally occurring components as risks thereby diminishes consumer confidence in dairy, contradicting India's nutrition security goals.

IDA’s Recommendations

• A Dedicated Category for Dairy: Classifying dairy separately ensures fair assessment of its nutritional benefits, accounting for its naturally occurring components.
• Holistic Nutritional Algorithms: Refining the INR algorithm to distinguish between natural and artificial nutrients will provide a more accurate representation of a product's health profile.
• Collaborative Dialogues: IDA seeks an open consultation with FSSAI to share sector-specific data and co-develop scientifically robust and practical solutions.

Dairy's contribution to rural development, employment, and nutrition security makes it a cornerstone of India's agricultural economy. We urge policymakers to adopt a balanced, consultative approach that safeguards consumer health while protecting the interests of farmers and the dairy industry. The Indian Dairy Association (IDA) remains committed to working alongside FSSAI to achieve this shared vision.

The dairy industry, a cornerstone of India's agricultural and rural economy, serves as a vital lifeline for over 80 million families, particularly landless, small, and marginal farmers. With India maintaining its global leadership as the largest milk producer, our responsibility as stakeholders in this industry is to ensure its continued growth, resilience, and inclusivity.

The recent remarks by Union Minister Shri Piyush Goyal, emphasizing the need to safeguard India's dairy industry in Free Trade Agreement (FTA) negotiations with the European Union (EU), reflect a critical stance aligned with the aspirations and livelihoods of millions of Indian farmers. The IDA wholeheartedly supports this position and commends the government for recognizing the unique sensitivities surrounding the sector.

The EU's insistence on accessing India's dairy market disregards the structural disparities between the two regions. In Germany, for instance, only 2% of the population is employed in agriculture, compared to approximately 60% in India. This stark contrast makes any unregulated opening of India's dairy market unsustainable and potentially devastating.

IDA is not against trade liberalization. On the contrary, we believe in mutually beneficial agreements that respect the sensitivities of both parties. A strong FTA can catalyze India's dairy exports, unlocking opportunities for valueadded products like cheese, paneer, and milk powders. However, these agreements must prioritize domestic interests and protect the livelihoods of millions who depend on this sector.

In our Pre-Budget Memorandum for 2025-26, the IDA has outlined strategic recommendations to the Ministry of Food Processing Industries, Ministry of Finance, and other policymakers. These proposals address the multifaceted challenges faced by the dairy sector while paving the way for sustainable development.

Key Focus Areas of Our Submission

• Enhanced Budget Allocation
  Despite contributing approximately 30% to India's agricultural GDP and 5.3% to the national GDP, the dairy sector receives a disproportionately low share of budgetary support. We urge the government to allocate resources commensurate with the sector's significance to enhance infrastructure, promote modernization, and empower both cooperatives and private enterprises.
• Priority Sector Lending
  Recognizing dairy and animal husbandry under Priority Sector Lending will facilitate affordable credit access for dairy cooperatives, farmer-backed unions, and private enterprises. This inclusion will promote financial stability and encourage investments in milk production, processing, and marketing.
• Tax Relief for Dairy Farmers
  Tax exemption for small and marginal farmers' income from dairy activities is imperative. Milk production, which relies on agricultural by-products, deserves parity in tax exemptions similar to agricultural income. This step will motivate youth to embrace dairy farming as a viable livelihood.
• Support for Export and Value-Added Products
  Export incentives and streamlined processes are essential for unlocking the global potential of Indian dairy products. Further, incentives for R&D and market diversification in value-added products like cheese, yogurt, and frozen desserts will boost both domestic and international markets.
• Inclusion of SMEs in Schemes like PLI
  The current Production Linked Incentive (PLI) scheme predominantly benefits large players. Extending this support to small and medium enterprises (SMEs) will empower smaller dairy processors to scale operations, foster innovation, and improve market access, particularly in rural areas.
• National Milk Buffer Stock
  Establishing a strategic reserve for commodities like skimmed milk powder (SMP) and butter will stabilize prices during periods of surplus or scarcity, ensuring fair returns to farmers and preventing market disruptions.

Overcoming Structural Challenges
The dairy sector faces hurdles such as complex regulatory frameworks, inadequate infrastructure, and limited access to affordable finance. Simplifying regulations and creating unified guidelines will improve compliance and ease of doing business. Additionally, incentivizing technology adoption, sustainable practices, and renewable energy in dairy operations can address environmental concerns while boosting efficiency.

As India's population grows and urbanization increases, the demand for milk and milk products is expected to surge. By implementing these recommendations, the government can empower the dairy industry to meet this demand sustainably while enhancing rural livelihoods and ensuring nutritional security.

The IDA remains committed to collaborating with policymakers and industry stakeholders to build a robust and inclusive dairy sector. Together, we can transform challenges into opportunities, positioning Indian dairy as a global leader not just in production, but also in innovation, quality, and sustainability.