Dairy industry players look to Union Budget 2026 for support on infrastructure, technology upgrades, and nutrition-focused initiatives to drive sector growth.
New Delhi: As Finance Minister Nirmala Sitharaman prepares to present the Union Budget 2026–27 on February 1, India’s dairy and FMCG industry is gearing up with a forward-looking wishlist that goes well beyond conventional subsidy support. Industry leaders are urging the government to prioritize infrastructure development, digital transformation, and nutrition-led policy reforms to drive sustainable growth across the dairy value chain.
Sector Builds on Policy Momentum
The dairy sector enters the budget season on a positive footing, supported by the GST rationalization announced in September 2025, which has improved the operating environment for organized dairy players. The reforms have also influenced consumer demand, with a noticeable shift toward high-protein and health-focused dairy products such as paneer, cheese, ghee, and butter.
Brahmani Nara, Executive Director of Heritage Diary Foods, notes that evolving consumption patterns reflect growing awareness around nutrition and quality. Similarly, Akshali Shah, Executive Director of Parag Milk Foods, highlights that recent tax reforms have helped stabilize demand, particularly in urban markets. However, she cautions that rural consumption remains sensitive to monsoon uncertainties and inflation, underscoring the need for continued policy backing.
Infrastructure Investment Tops Industry Agenda
A common theme across industry voices is the urgent need to strengthen dairy infrastructure. Heritage Foods has outlined a three-pronged approach for Budget 2026:
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Subsidized access to quality cattle feed and chromosome-sorted semen to enhance animal productivity
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Expansion of veterinary education capacity to bridge the gap between existing veterinarians and the sector’s growing needs
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Higher capital subsidies for mini-dairy units, with a special focus on supporting women entrepreneurs
Parag Milk Foods has echoed these demands, emphasizing investments in modern processing technology, organized supply chains, and advanced farm practices. Industry leaders believe such measures will reduce wastage, improve milk quality, and enhance India’s competitiveness in global dairy markets. Expansion of cold-chain infrastructure remains a critical requirement to ensure consistent availability and freshness of dairy products.
Technology-Led Transparency and Digital Transformation
Another emerging priority is the adoption of technology-driven transparency across dairy operations. Yachneet Pushkarna, Chief Seva Officer & CEO of Haribol, has called for targeted incentives for dairies investing in AI-enabled animal health monitoring, digital traceability systems, automated quality testing, and transparent processing platforms.According to Pushkarna, data-driven practices are essential for building trust across the dairy ecosystem and enabling small and mid-sized players to transition from unverified claims to measurable proof of quality and sustainability.
Nutrition Reimagined as Economic Infrastructure
One of the most compelling arguments ahead of Budget 2026 comes from Siddharth Runwal, Founder of Provilac, who urges policymakers to treat nutrition as a core economic investment rather than a welfare expense. He argues that while earlier budgets successfully addressed hunger through calorie availability, they overlooked protein quality, dietary diversity, and micronutrient adequacy.
Runwal advocates a shift toward regenerative farming, reduced chemical dependency, and everyday nutrition solutions that address India’s widening protein gap. “Nutrition is not a soft social-sector cost; it is hard economic infrastructure,” he emphasizes, calling for policies that strengthen food systems rather than focusing solely on healthcare outcomes.
Integrating Small Farmers into the Organized Dairy Ecosystem
Government initiatives such as the Rashtriya Gokul Mission and the National Digital Livestock Mission have already begun integrating smallholders into the organized dairy framework. Companies like Heritage Foods are currently working with over 300,000 farmers, showcasing the potential of collaborative growth models.Industry leaders stress that expanding access to credit, technology, veterinary services, and digital tools for farmers will be critical to building a resilient and future-ready dairy sector.
Looking Ahead to Budget 2026–27
As expectations build ahead of the Union Budget, the dairy industry’s demands signal a clear shift in mindsetfrom short-term subsidies to long-term structural transformation. Investments in infrastructure modernization, digital transparency, and nutrition-centric policies are seen as essential for scaling the sector sustainably.Whether Budget 2026–27 meets these expectations remains to be seen, but the unified industry push reflects a dairy sector ready to compete globally while supporting farmer livelihoods and improving national nutrition outcomes.