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India: 126% growth in dairy exports

Buoyed with huge demand for Indian dairy products from various countries, India has posted a whopping 126% growth at 123,877 metric tons worth of USD $ 380 million (INR 27 billion) in exports of milk and milk products during 2018-19 financial year.

During the same period in 2017-18, India's milk and milk product exports were recorded at 54,828 metric tons, the Indian ministry for animal husbandry, dairying and fisheries said in a statement.

The ministry attributed the growth to exports in skimmed milk powder that grew by 292% during the period, as compared to the same period last fiscal year, while products such as butter, ghee, cheese, cream, and curd too recorded a huge growth.

Turkey, UAE, Egypt, Bangladesh, and Bhutan were the major destinations for India’s dairy exports.

Speaking on this development, India's biggest milk co-operative, Amul managing director R S Sodhi said that the policy push under the foreign trade scheme started by the government to push exports of dairy products is now showing results.

Though India is the largest producer of milk in the world, its share in the export market was much less compared to developed countries that account for major share in the export basket. Photo: Dreamstime
Though India is the largest producer of milk in the world, its share in the export market was much less compared to developed countries that account for major share in the export basket. Photo: Dreamstime

Central government MEIS scheme showing results

In 2016, the central government started a Merchandise Exports from India Scheme (MEIS) under which the government had notified goods for exports, which also included milk and milk products.

Under the MEIS rewards were payable as a percentage ( 2%, 3% or 5% ) of realised FOB value of covered exports, by way of the MEIS duty credit scrip. This scrips and inputs imported under the scrips were fully transferable and provided much flexibility to exporters.

Initially, the government has capped up to 10% incentives, but it was later on increased to 20%, a source said.

Products that attracted the 20% export incentives include whole milk, buttermilk, condensed milk, yogurt, skimmed milk, milk food for babies, and processed, grated and powdered varieties of cheese.

Amul's MD also said that the dairy export market is looking good and they are trying to diversify in other products such as cheese and curd.

During 2018-19, the export of butter, ghee and butter oil nearly tripled at 46,137 metric tons, as compared to 16,616 metric tons exported during 2017-18.

India's milk production to reach 170 million by 2022

Though India is the largest producer of milk in the world, its share in the export market was much less compared to developed countries that account for major share in the export basket.

According to a paper titled 'India’s Dairy Exports: Opportunities, Challenges and Strategies' by Rakesh Mohan Joshi Professor and Chairperson, Research and International Collaborations, Indian Institute of Foreign Trade - India’s milk production is expected to grow to 176 million tons by 2022 and far exceed the total milk production of the entire European Union.

India's current milk production during 2018-19 was estimated at 146 million tons, while it was estimated 140 million tons during the 2013-14 fiscal year, the study said.

Global standard quality a must to compete

Former secretary to animal husbandry, dairying and fisheries Tarun Sridhar said that there is still huge room for improvement in the exports of the dairy sector. We also need to push products such as cheese and curd which has a huge demand in developed nations, however, quality has to meet global standards to compete.

Another challenge for India is to set aside some milk stock for exports, as majority of the milk and milk products produced in the country are utilised for meeting domestic demands, so there is very little stock available for exports, Mr Sridhar added.

According to the Agricultural & Processed Food Products Export Development Authority (APEDA), a government agency looking after export - Uttar Pradesh, Maharashtra, Himachal Pradesh, Madhya Pradesh, Punjab, Rajasthan, Tamil Nadu are the major production areas of dairy & dairy products in India.