A member of Niti Aayog, Ramesh Chand, has suggested that India augment its dairy exports as production in the country exceeds demand.
This requires increasing India’s effectiveness while also opening up to dairy imports through free trade agreements with other countries, said Chand.
In a working paper titled India’s White Revolution, Ramesh Chand reported that India’s dairy industry has been opposing any free trade agreement that involves liberalization of trade (imports) in dairy products. However, if we have to capture overseas markets for the disposal of future surplus milk in the country, then we must be export competitive.
Being export competitive requires higher competitiveness than competing with imports.” A country cannot be export-competitive if it is unable to compete with imports. This issue is crucial for the future growth of the dairy industry in India.
According to the working paper, milk production in the country is projected to grow at 6% per year, while the per-capita milk intake is already above the recommended level, even as population growth is falling below 1%. Consequently, domestic milk demand in the future is likely to grow at a lower rate and is expected to be lower than the growth in production, which is quite robust. This will generate some surplus milk over normal demand and supply.
Chand suggests that India’s dairy industry prepare for channelizing some domestic production to overseas markets, preferably after processing it into various products rather than liquid milk alone.
“This will require some change in investment in the dairy industry, including the value chain. India can also tap some high-end markets if it can address milk quality and livestock health,” he said.