NPDD and AHIDF strengthen milk procurement, chilling, processing and cold-chain capacity across the country

Key Highlights

• India’s milk production increased from 209.96 million tonnes in 2020-21 to 247.87 million tonnes in 2024-25.
• Per capita milk availability rose from 427 grams per day to 485 grams per day over the same period.
• 36,611 new Dairy Cooperative Societies have been organised under NPDD as of June 2026.
• Around 168 lakh litres per day (LLPD) of new milk chilling capacity has been created.
• AHIDF has approved projects representing 418 LLPD of milk processing and value-addition capacity.
• 76,748 quality-testing devices have been distributed under NPDD.

India’s dairy sector is undergoing a major infrastructure and capacity expansion, with government-backed programmes targeting milk procurement, chilling, processing, cold-chain development and value addition.

The Department of Animal Husbandry and Dairying (DAHD) is implementing programmes including the National Programme for Dairy Development (NPDD) and the Animal Husbandry Infrastructure Development Fund (AHIDF) to modernise the dairy value chain and strengthen the income base of milk producers.

Milk Production Grows Nearly 18% in Five Years

India’s milk production has recorded consistent growth, rising from 209.96 million metric tonnes in 2020-21 to 247.87 million tonnes in 2024-25.

Per capita milk availability has consequently increased from 427 grams per day to 485 grams per day.

NPDD Expands Organised Dairy Network

The National Programme for Dairy Development provides financial assistance for strengthening milk procurement, chilling and quality-assurance infrastructure.

Under the scheme, 50% grant assistance is available for strengthening milk procurement, chilling and quality assurance infrastructure.

Higher support is available for modern infrastructure in specified regions, with 75% Central grant assistance for milk procurement, processing, value addition and cold-chain infrastructure, and 70% assistance for quality-assurance infrastructure in hilly areas and the North Eastern Region.

As of June 2026:

• 36,611 new Dairy Cooperative Societies (DCS) have been organised.
• 34,557 existing DCS have been strengthened.
• Around 168 LLPD of milk chilling capacity has been created.
• 76,748 quality-testing devices have been distributed.

The expansion of village-level dairy cooperatives is particularly important because it strengthens the organised milk procurement network and provides producers with more reliable access to formal markets.

AHIDF Supports Modern Dairy Processing

The Animal Husbandry Infrastructure Development Fund (AHIDF) is supporting private and cooperative investment in modern dairy processing, value addition and cold-chain infrastructure.

Eligible beneficiaries receive 3% interest subvention for establishing such projects.

Projects approved under AHIDF represent a combined milk processing and value-addition capacity of 418 LLPD across cooperative and private sectors.

The focus on processing and value addition is expected to increase the share of higher-value dairy products while improving storage, distribution and market efficiency.

Stronger Dairy Value Chain Could Benefit Hospitality

The expansion of milk processing and cold-chain infrastructure has implications for the wider food and hospitality industry.

Greater processing capacity can support consistent supplies of milk, curd, paneer, cheese, butter, cream and other dairy products to hotels, restaurants, bakeries, cafés and institutional kitchens.

Improved chilling and quality testing can also help reduce spoilage and improve product consistency, particularly across long-distance supply chains.

For hospitality businesses, the growth of organised dairy procurement and processing could mean more reliable access to quality-assured domestic dairy products, while value-added dairy production creates opportunities for new food and beverage offerings.

Bottom Line

India’s dairy sector is moving towards a more integrated and modern value chain, combining higher milk production with expanded cooperative networks, chilling capacity, quality testing, processing and cold-chain infrastructure.

With milk production reaching 247.87 million tonnes in 2024-25, continued investment under NPDD and AHIDF is strengthening the foundation for dairy farmers, processors and the food and hospitality sectors alike.