Modernization of Dairy Sector and Growth in Milk Production

Executive Summary The Department of Animal Husbandry and Dairying (DAHD) is implementing the NPDD and AHIDF schemes to modernize India's dairy sector through infrastructure development and financial assistance. As of June 2026, these initiatives have expanded milk chilling capacity by 168 LLPD and organized over 36,000 new Dairy Cooperative Societies. The programs aim to enhance production efficiency and sustainability, supporting a documented growth in milk production and per capita availability through 2025.

Key Points / Main Content

National Programme for Dairy Development (NPDD)

• General Assistance: Provides a 50% grant for strengthening milk procurement, chilling, and quality assurance infrastructure to increase organized procurement.
• Hilly and NER Support: Offers an increased 75% Central Grant for modern procurement, processing, and cold chain infrastructure in hilly areas and the North Eastern Region.
• Quality Assurance in Specific Regions: Provides a 70% Central Grant for quality assurance infrastructure specifically for hilly and NER areas.

Animal Husbandry Infrastructure Development Fund (AHIDF)

• Interest Subvention: Offers a 3% interest subvention to eligible beneficiaries for establishing dairy processing, value addition, and cold chain projects.
• Sector Inclusion: Funding is available for projects in both the cooperative and private sectors.

Sectoral Achievements (as of June 2026)

• Cooperative Growth: 36,611 new Dairy Cooperative Societies (DCS) organized and 34,557 existing DCS strengthened at the village level.
• Infrastructure and Testing: Created 168 lakh litres per day (LLPD) of milk chilling capacity and distributed 76,748 quality testing devices.
• Approved Capacity: Projects with a total processing and value-addition capacity of 418 LLPD approved under AHIDF.

Production and Availability Trends (2020-21 to 2024-25)

• Milk Production: Increased steadily from 209.96 Million Metric Tonnes to 247.87 Million Metric Tonnes.
• Per Capita Availability: Rose from 427 grams/day to 485 grams/day over the five-year period.

Impact Analysis

Dairy Cooperative Societies (DCS) Impact They receive direct financial assistance to organize new units and strengthen existing village-level operations. Action Required Utilize grants for infrastructure and deploy distributed quality testing devices to enhance procurement standards.

Private and Cooperative Sector Enterprises Impact Eligible for reduced borrowing costs through the 3% interest subvention for infrastructure projects. Action Required Apply for AHIDF support to establish or modernize dairy processing and value-addition facilities.

Milk Producers Impact Benefit from access to an organized market, modernized collection infrastructure, and improved income levels. Action Required Participate in strengthened cooperative networks to leverage improved chilling and storage facilities.

State Governments Impact Central initiatives supplement state efforts to modernize the dairy sector and improve production productivity. Action Required Collaborate with the DAHD to facilitate the implementation of NPDD and AHIDF schemes within their jurisdictions.