India Dairy Market SIZE & SHARE ANALYSIS - GROWTH TRENDS & FORECASTS UP TO 2030

India Dairy Market Analysis

The India Dairy Market size is estimated at 29.9 billion USD in 2025, and is expected to reach 41.82 billion USD by 2030, growing at a CAGR of 6.94% during the forecast period (2025-2030).

The dairy industry in India retail landscape is experiencing significant transformation, driven by the rapid expansion of organized retail channels and changing consumer preferences. Supermarkets and hypermarkets have emerged as the dominant distribution channel, accounting for 47.4% of the total value share in 2022, offering consumers a wide array of dairy products in India under one roof. The convenience store segment has also shown remarkable growth, with sales increasing by 6.2% in 2022 compared to the previous year, as urban consumers increasingly value accessibility and variety in their dairy products market purchases.

The digitalization of the dairy market retail is reshaping consumer purchasing patterns, supported by the country's growing digital infrastructure. By the end of 2022, India recorded 720 million internet users, with 692 million being active users split between rural (351 million) and urban (341 million) areas. This digital penetration has catalyzed the growth of online dairy market retail, with major platforms like Country Delight, Milkbasket, and DoorMilk expanding their presence across metropolitan regions and offering specialized dairy delivery services.

The food service sector is witnessing substantial growth in the growth of the dairy industry in India, particularly through quick-service restaurants (QSRs) and casual dining establishments. In 2022, India hosted 490 QSR brands, with 428 actively operational, indicating the robust growth of organized food service channels. This expansion is further evidenced by significant developments such as Domino's Pizza opening its 1,500th restaurant in Noida and Theobroma launching its first outlet in Chennai in October 2022, demonstrating the increasing penetration of organized food service chains across tier-1 and tier-2 cities.

Consumer preferences are evolving towards premium and specialized dairy products, driving innovation across the industry. Traditional dairy companies are expanding their product portfolios to include value-added products, while new entrants are focusing on niche segments such as organic and functional dairy products. The market has witnessed a significant shift in consumption patterns, with the milk market maintaining its position as the cornerstone of milk consumption in India, accounting for 67.4% of the total category in 2022, while yogurt has emerged as the second most popular category with an 18.2% value share, reflecting growing consumer interest in healthier dairy options.

India Dairy Market Trends

Growing health consciousness and increasing Western culture impact the consumption of dairy products

• In terms of consumption, India’s per capita milk consumption is estimated to increase by 2.12% during 2023-2024. Uttar Pradesh, Rajasthan, Gujarat, Maharashtra, and Bihar are the major states for the country’s dairy consumption.
• Increasing health-conscious consumers are moving toward milk and related products to supplement food with the nutrition required for the body. Most people consume milk with tea, coffee, shakes, or other drinks. About a third of the national population is under the age of 14, a group inclined to consume higher quantities of milk.
• With the adoption of Western culture and changing food habits, the demand for cheese has increased in India. Additionally, there’s a strong demand from the fast-food sector as well, where foreign food service is strategically expanding its presence. In 2021, India had 1,4095 Domino’s Pizza outlets, while it was 830 in 2014.
• Yogurt is referred to as curd in the country, and there is high consumption of plain yogurt as it is typically consumed as part of a meal or refreshment by the Indian population in their daily routine.
• Ice cream is a popular refreshment for Indians and is registering an increase in consumption every year. This upswing in demand is largely due to early summers and subsequent rises in temperatures, the availability of various flavors, and the opening of ice cream parlors. Baskin Robbins currently operates more than 800 exclusive ice cream parlous across over 230 cities, making it one of the largest exclusive ice cream retail chains in India. Eventually, the production also increased to suffice the growing consumption of ice cream. India produced more than 200 million liters of ice cream in 2020. This was a significant increase from 2015.

OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT

• Rising demand for butter in international markets leading to the growth in the production of butter
• Support from government agencies drives the market
• Changing weather conditions, coupled with fodder and grain prices, largely impact the production of milk in the country

Segment Analysis: Category

Milk Segment in Indian Dairy Market

The milk segment continues to dominate the Indian dairy products market, holding approximately 61% milk market share in 2024, making it the largest category in the sector. This commanding position is primarily attributed to milk being a dietary staple in Indian households and its versatile usage in various food preparations. The segment's growth is substantially supported by government initiatives such as the National Programme for Dairy Development (NPDD) and Dairy Entrepreneurship Development Scheme (DEDS), which focus on enhancing milk production and quality. The segment's robust performance is further strengthened by the increasing adoption of modern retail channels and the rising demand for value-added milk products in urban areas. Additionally, the emergence of organized retail chains and the implementation of stringent quality standards have helped maintain consumer trust in packaged milk products.

Yogurt Segment in Indian Dairy Market

The yogurt segment is emerging as the most dynamic category in the Indian dairy products industry, projected to grow at an impressive rate of approximately 12% during 2024-2029. This remarkable growth trajectory is driven by increasing health consciousness among Indian consumers and the rising preference for probiotic dairy products. The segment's expansion is further fueled by product innovations, particularly in flavored and functional yogurt varieties, along with the introduction of convenient packaging formats. Major dairy companies are investing significantly in yogurt production facilities and launching new product variants to capitalize on this growing demand. The segment is also benefiting from the increasing adoption of yogurt as a healthy snacking option and its integration into various culinary applications, particularly in urban households.

Remaining Segments in Category

The Indian dairy market encompasses several other significant segments, including butter, cheese, cream, dairy desserts, and sour milk drinks, each serving distinct consumer needs and preferences. The butter segment maintains its importance in Indian cooking and traditional food preparation, while cheese is gaining prominence due to the westernization of food habits and growing quick-service restaurant chains. The cream segment serves both household and commercial requirements, particularly in the food service sector. Dairy desserts are experiencing growth due to increasing disposable income and changing consumer preferences, especially in urban areas. Sour milk drinks maintain their traditional significance in Indian dietary habits, particularly during summer months. These segments collectively contribute to the market's diversity and cater to evolving consumer preferences across different regions of India.

Segment Analysis: Distribution Channel

Off-Trade Segment in India Dairy Market

The off-trade distribution channel dominates the Indian dairy products market, commanding approximately 91% dairy market share in 2024, driven by the extensive network of retail outlets across the country. This segment encompasses various retail formats, including supermarkets, hypermarkets, convenience stores, specialist retailers, and online platforms. Supermarkets and hypermarkets lead the off-trade channel, accounting for nearly 48% of dairy product sales, offering a wide assortment of products with dedicated shelf space for different dairy categories. The segment's growth is further propelled by the rising penetration of organized retail, with major chains like DMart, Reliance Retail, and SPAR India continuously expanding their presence. The convenience of product selection, competitive pricing strategies, and the availability of private label brands have made off-trade channels the preferred choice for consumers. Additionally, the emergence of online grocery platforms and specialty dairy stores has enhanced the accessibility of dairy products, particularly in urban areas. The off-trade segment is projected to maintain its market leadership while growing at approximately 7% annually from 2024 to 2029, supported by increasing urbanization and evolving consumer shopping preferences.