Climate threats could deepen India's dairy supply shortage, industry warns

India's dairy sector faces mounting pressure from climate-related challenges that threaten to widen the gap between milk supply and demand, according to a detailed industry assessment. Milk production growth has decelerated to between 3.5 and 3.7 per cent annually, already lagging behind consumption increases, with weather volatility and environmental stress now emerging as additional headwinds.

Climate risks are expected to raise input costs significantly, placing additional strain on dairy producers already operating with compressed profit margins. Higher procurement expenses coupled with supply-side pressures could make it increasingly difficult for dairy businesses to maintain production levels while sustaining economic viability.

The sector faces particular vulnerability in value-added dairy products, where margins are typically thinner and production depends on consistent, high-quality milk supplies. Climate-induced fluctuations in feed availability, water resources, and livestock health could disrupt processing operations and limit product diversification.

Industry experts warn that without proactive measures to build climate resilience into dairy operations, India's reliance on milk imports could intensify. The sector requires focused policy attention and investment in adaptive technologies to sustain domestic production and address the nation's growing protein consumption needs.