Where Does India’s Milk Go? Tracking the Journey of 248 Million Tonnes of Milk

Pashu Sandesh,25 July 2026

India retained its position as the world’s largest milk producer in 2024–25, producing an estimated 248 million metric tonnes (MMT) of milk. Yet, a closer look at the numbers reveals that a significant share of this milk never enters the formal dairy supply chain, highlighting both the strengths and challenges of the country’s dairy sector.

According to information shared in the Lok Sabha by Union Minister for Fisheries, Animal Husbandry and Dairying Rajiv Ranjan Singh (Lalan Singh), around 37% of the milk produced in the country is consumed by dairy farming households themselves, either as liquid milk or in the form of traditional dairy products. The remaining 63% constitutes marketable surplus milk, which is available for sale and processing.

However, not all of this surplus reaches organized dairy channels. The government estimates that only 32% of the marketable surplus is handled by organized cooperatives and private dairies, while a substantial 68% remains within the unorganized sector, including local vendors, direct consumer sales, and small-scale milk traders.

This data underlines a long-standing characteristic of India’s dairy economy. Despite the growth of major dairy brands and cooperative networks, a large portion of milk continues to be marketed through informal channels, particularly in rural and semi-urban areas. While these channels provide livelihood opportunities for millions, they often operate with limited quality testing, processing, and cold-chain infrastructure.

To address this gap, the government has been focusing on bringing more milk into the organized sector. As part of these efforts, 36,283 new Dairy Cooperative Societies (DCSs) were established at the village level by March 2026, while 31,150 existing societies were strengthened.

Infrastructure development has also received significant attention. Village-level milk collection networks have been expanded through the creation of about 168 lakh litres per day (LLPD) of milk chilling capacity, helping reduce spoilage and improve milk quality. Additionally, 76,748 milk quality testing devices have been distributed to ensure transparency in procurement and better quality assurance for farmers.

Further strengthening the dairy value chain, projects with a combined capacity of 418 LLPD have been approved to enhance milk processing and value addition.

The government’s strategy reflects a broader objective: increasing the share of milk handled by organized dairies, improving quality standards, and ensuring better returns for producers. As India’s milk production continues to rise, the challenge will be not only producing more milk but also creating efficient systems to collect, process, and market it. The future growth of the dairy sector may well depend on how successfully the country bridges the gap between its vast unorganized network and the modern dairy industry.

Dr Akash waghmare
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