India is looking at importing more dairy products, such as milk fats, butter and ghee, to meet the increasing domestic demand. India's National Dairy Development Board (NDDB) and the Indian government are monitoring the supply-demand gap of dairy products and will make a decision on imports depending on the actual situation.
Animal Husbandry and Dairy Secretary Rajesh Kumar Singh mentioned a supply constraint of some dairy products in India, especially fats, butter and ghee, with stocks lower than the previous year. However, the inventory of skimmed milk powder (SMP) remains sufficient, so there is no need to import more SMP.
The soaring price of milk is one of the reasons for the supply constraint. Reserve Bank of India (RBI) Governor Shaktikanta Das stated on April 6, 2023, that milk prices are likely to remain high heading into the summer season due to the fodder cost pressure. Furthermore, according to Rajesh Kumar Singh, India's milk production remained stagnant in the 2022-23 fiscal year due to lumpy skin disease in cattle.
However, there has been an increase in the consumption of nutritious, safe and hygienic milk and milk products in the post COVID-19 era, as people's health awareness improves.
India has been a net exporter of dairy products for years, except for in 2011 when it imported large quantities of dairy products due to domestic shortage. To address shortages and high domestic prices, the industry assumes that India may allow duty free imports of some dairy products through the Tariff Rate Quota (TRQ) scheme. If you are interested in the regulations of dairy products in India, please refer to Section 2.1 Dairy Products and Analogues of the Food Safety and Standards (Food Products Standards and Food Additives) Regulation.
India, as the world's biggest milk producer, has been promoting local dairy production and processing to develop the local dairy industry. Therefore, when deciding whether to increase dairy imports, the government will also consider the impact on the local dairy industry. On April 6, 2023, Nationalist Congress Party (NCP) chief Sharad Pawar expressed opposition to the government's intention to import dairy products such as butter and ghee, citing concerns that it would negatively affect the income of domestic milk producers.
Given this opposition, it remains to be seen how the government will respond to these concerns and whether it will proceed with its plans for increased dairy imports while balancing its commitments to the domestic dairy industry.
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