Milk-hungry Indians leave little for export

Indians are consuming milk products like never before, according to numbers from the commerce ministry.

While exports of dairy products out of India have plummeted in the last three years, their imports have soared, indicating strong demand for milk and milk products.

India has the largest number of cows in the world and produces the largest quantity of milk, at about 120 million tonnes per year. However, the country was neither a big exporter nor a big importer of milk and milk products earlier.

However, at the turn of the century, India had started exporting more and more milk products, thanks to Operation Flood. However, that exports boosts seems to be unraveling due to the huge and rising demand for milk products from the rapidly growing middle class and rural population.

India, which accounts for about 15% of the world’s total milk production, contributed less than 0.5% of its total international trade in dairy products.

According to numbers from the commerce and industry ministry, imports hit a record Rs 1,203 crore in the financial year ended March 2012. It was Rs 822 crore in the previous year and in 2009-10, it was just Rs 322 crore.

On the other hand, exports which were never very substantial at about Rs 548 crore two years ago, fell to Rs 289 crore last year.

The trend was captured by a recent report by Crisil Research in which it blamed the rising demand for non-vegetarian food items, such as eggs, meat and milk, for the relentlessly high inflation rates seen in the country in the last three years.

The Indian government, however, seems slightly worried about the steep drop off in milk exports. It has put in place several schemes, such as the Vishesh Kriski and Gram Udyog Yojna, to increase the export of dairy products.