Competitiveness and Trade Performance of India’s Dairy Industry

The study investigates the pattern, trends, competitiveness, and determinants of the export of dairy products from India—the world’s largest milk producer. Data show that exports of dairy products from India have witnessed a remarkable growth in recent years. Our estimates also establish that India has price competitiveness and comparative advantage in the production of milk. Some instability is observed in the export markets of Indian dairy products, as notably shown by the high probabilities of Bangladesh and the UAE to gain market shares from the other importers of Indian dairy products. Furthermore, the results indicate that dairy export from India is elastic to the world market size, price divergence, exchange rate, and trade policy. Based on the findings, it is recommended that India focus on improving the quality of its dairy products to get a premium price in the world market.