GROWTH, GVA CONTRIBUTION AND STRUCTURAL CHALLENGES IN INDIA'S DAIRY SECTOR

Abstract

The dairy sector occupies a pivotal position in the Indian economy, contributing significantly to agricultural growth, rural employment, nutritional security and livelihood diversification. India is the world's largest milk producer, accounting for nearly 24 per cent of global output and producing 247.87 million tonnes of milk in 2024–25, with per capita availability of 485 g/day. Yet concerns remain regarding animal productivity, climate resilience, value addition and market competitiveness. Existing studies largely focus on production trends in isolation, with limited attention to integrating production growth with economic performance, rural livelihoods and future sustainability; this study addresses that gap. Using secondary data from government reports, annual publications and research studies for the period 1950–51 to 2024–25, the study applies growth-rate, Compound Annual Growth Rate (CAGR) and share-based analytical formulas to examine the sector's production performance, contribution to agricultural Gross Value Added, employment generation and structural challenges. The analysis shows milk production grew at a CAGR of approximately 3.7 per cent over the period, while livestock GVA grew considerably faster, at around 13.8 per cent per annum between 2011–12 and 2022–23, driven more by value addition than by volume growth. Persistent constraints include low animal productivity, fodder shortages, climate stress, disease outbreaks and marketing inefficiencies. The sector supports more than eight crore farming families, mainly small and marginal farmers. The paper concludes with formula-grounded policy recommendations for enhancing productivity, market efficiency and farmer welfare.