India offers ‘vast potential’ for Australian dairy

By Country News on March 04, 2016

India is the world’s largest producer of milk but exports very little of its production.

Its population of 1.3 billion people consume an average of 102 litres of milk and dairy products per person every year.

India is largely a protected market based on high tariffs with limited opportunities for Australian exporters but this will probably change, according to Dairy Australia manufacturing capability and innovation program manager Mani Iyer in a podcast interview released in January.

“The coming decades will present vast potential opportunities for Australian dairy companies in India, but it is a big and complex  marketplace, and one that needs to be approached with thought and care,” Dr Iyer said.

“The opportunities are scattered in different product categories, market segments and geographical regions, so it is a matter for each company to decide where its strengths lie and where those strengths can best be utilised.

“Above all, Australian companies need to build their profiles in India by creating partnerships with established players who know the ground rules.

“Better for companies to start early on this process, and even if they don’t start exporting straight away at the very least they are building the relationships that are so crucial for long-term success.”

India is the largest producer and consumer of milk in the world, producing 140 billion litres of cow and buffalo milk each year which is around 13 to 17 per cent of world production, but India only accounts for 0.3 per cent of world dairy trade. In comparison, Australia produces two per cent of world dairy but garners seven per cent of world trade.

“India’s milk production is growing at about four per cent per annum, but demand is growing at six to eight per cent, coming mainly from middle-class Indians who are looking for branded premium quality dairy,” Dr Iyer said.

He said 300 million of India’s 1.3 billion people were in the middle-class.

“I see opportunities in three main sectors for companies wanting to export to India: retail, food service and ingredients.

“In retail, branded products (like) cheeses, butter, yoghurts and probiotics offer good opportunities, while in the food service area it is high-end five-star restaurants looking for high-quality foods that will appeal to exporters.”

But to gain a foothold in India, Australian companies will need to plan and invest time, effort and resources, Dr Iyer said.

“For us to build a profile will require a significant effort just like what we have done in China. And the need is for co-ordinated and sustained action at government, industry and company levels.”

The podcast is available on Dairy Australia’s website.

By Country News on March 04, 2016

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