According to a report by Investor Relations Society (IRS) the Indian dairy industry (both organized and unorganized) is expected to double to $140 billion from today’s $70 billion by the year 2020. The increase will be driven by a growth in disposable income and a continued strong demand for dairy in the country. In 1998 India overtook the U.S. to become the world’s biggest milk producer, and today milk is the country’s biggest agricultural product contributing 22% to India’s agricultural GDP. Overall the Indian dairy industry is growing at a compounded annual growth rate (CAGR) of 15%-17% however, value-added products are growing above 24%. Annual milk production is expected to exceed 200 million tons by 2016 from the current 125 million tons. The Indian government has liberalized the sector in phases since 1991 and currently there is diversification into the dairy sector by outside companies, an increase in private equity deals, and an increase in foreign direct investment all pointing toward continued growth.
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