Confederation of Indian Industry. Opportunities in. Ministry of Food Processing Industries. Government of India

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1 Confederation of Indian Industry Opportunities in DAIRY Sector in India Ministry of Food Processing Industries Government of India

2 Advantage India One of the fastest growing economies in the world Largest producer of several agri commodities Second largest consumer market Significant investments in world class ports, logistics & supply chain infrastructure Proactive Government policies Investor friendly incentives Highly skilled manpower pool Why India for Dairy Processing? With production of around million MT ( ), India is the largest producer of milk globally. India s milk production is expected to reach 180 million MT by 2020, from current million MT, while the demand is projected (by NDDB) to reach 200 million MT. The Indian dairy market is amongst the largest and fastest growing markets in the world. India has managed to attain top position in milk production globally owing to huge bovine population. However, the full potential of Indian milch herd still remains unattained. Per capita availability of milk in India has reached 352 grams per day.

3 Changing lifestyle patterns, increasing disposable incomes and increasing health consciousness are the key growth drivers for milk and high value milk products in India. To tap the surging demand, most dairy players have entered the processed dairy segment with introduction of value added products like ghee, flavored yogurt, butter (with variants), flavored milk, cheese etc.

4 Major States Uttar is the largest milk producing state in India contributing around 17% to the total milk production, followed by Rajasthan, Madhya, Gujarat and Andhra contributing 12%, 8%, 8% and 7% respectively. Top 5 Milk Producing States in India Jammu and Kashmir Himachal Milk Production (Mn MT) 27.5 Chandigarh Punjab Uttarakhand Haryana Delhi Rajasthan 19.4 Arunachal Sikkim Uttar Bihar Assam Meghalaya Nagaland Manipur Tripura Jharkhand 13.5 Madhya Gujarat West Bengal Chhattisgarh Mizoram Odisha Diu Dadra and Nagar Haveli Daman Maharashtra Telangana Goa Uttar Rajasthan Madhya Gujarat Karnataka Andhra Andhra Lakshadweep Islands TamilNadu Andaman & Nicobar Islands Puducherry Kerala Source: Department of Animal Husbandry, Dairying and Fisheries Species-wise Milk Production 35% of the milk produced in India is through indigenous buffalo breeds, followed by cross bred cattle, non-descript buffalo indigenous cattle and non-descript cattle. A small amount of milk (about 4.4% ) is produced by exotic cattle breeds and goat Production (Mn MT) Indigenous buffalo Cross bred cattle Non-Descript Buffalo Indigenous cattle Non-descript cattle Goat 1.7 Exotic cattle

5 State-wise Processing Capacity 30.0 in '000 litres per day Private Cooperative Source: Basic Animal Husbandry, Dairying and Fisheries Statistics, 2013

6 Indicative Opportunity in Dairy Sector Technology & Equipment Suppliers New technology in value added dairy products processing Cold chain Innovation in packaging solution New product development for cattle feed New veterinary care technology & cattle diagnostics services Dairy Processing Players New product development in value added dairy products viz. cheese, smoothies, flavored milk, custard, yogurt and other ethnic Indian products Exports India exported dairy products of around USD 0.2 Bn in the year These include products like skimmed milk powder, casein milk, cream, etc. The major destinations include UAE, Pakistan, Bangladesh, Bhutan and Nepal. Policy Support and Key Fiscal Incentives 100% FDI in trading, including through e-commerce, for food products produced and/or manufactured in India. 100% FDI permitted through automatic route in food processing sector. Food processing units can avail preferential rates under Priority Sector Lending. Special fund of INR 2,000 crore (USD 300 million) with NABARD for designated food parks and processing units. Food Safety Standards harmonized with international standards.

7 GST implementation to harmonize the tax regime-seamless operations across states. 100 % Income Tax Deductions on: o Capital expenditure for cold chain / warehouse o Profit for new food processing, preservation and packaging units Basic Custom Duty reduced on Refrigerated Containers from 10% to 5% Concessional Customs Duty on imported equipment Schemes of Ministry of Food Processing Industries Scheme for Mega Food Park (MFP) Government of India has approved setting up of 42 MFPs in the country, out of which 41 have been sanctioned by MoFPI. Of the 41 MFPs, 9 have already commenced operations. The parks have more than 1,200 developed plots (of approximately 1 acre each) with basic infrastructure enabled, that entrepreneurs can lease for the setting up of food processing and ancillary units. Scheme for Integrated Cold Chain and Value Addition Infrastructure Scheme for Food Safety and Quality Assurance Infrastructure Scheme for Infrastructure for Agro-processing Clusters Scheme for Creation of Backward and Forward Linkages Scheme for Creation/Expansion of Food Processing and Preservation Capacities Scheme for Human Resources and Institutions

8 Contact Ministry of Food Processing Industries, Govt. of India Tel: / / / Web: YES BANK Ltd. Tel: Web: Confederation of Indian Industry Confederation of Indian Industry (CII) Tel: Web: Source: Ministry of Food Processing Industries (MoFPI), National Horticulture Board, Agricultural and Processed Food Products Export Development Authority (APEDA), Central Institute of Post-Harvest Engineering and Technology (CIPHET), Annual Survey of Industries and other relevant websites

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