How to Start a Dairy Business in India?

How to Start a Dairy Business in India?

Dairy businesses in India are one of the most successful businesses operating in the country. These businesses are profitable and successful because of several reasons and excessive product demand is one of them. The variety of products sold has contributed to the rise of product demand which has eventually resulted in more profits. If an individual wants to start a dairy business or farm, he must understand all the requirements and fulfill them in order to successfully launch a dairy business in any part of the country.

Understanding the Dairy Market, India

Undertaking an adequate amount of research and developing an understanding of the dairy market is important before diving into other steps involved in the establishment of the dairy business. The dairy market in India is estimated to cross INR 21,791 billion by 2024. It is estimated to grow by 15 percent every year and is likely to reach INR 9.4 trillion by 2020. Value creation and addition have been two aspects that have helped this industry flourish over a few years.

Basics about Dairy Business Loans

Individuals can avail of different loans in order to start a dairy business/farm. Banks and financial establishments have introduced several loans for this purpose. In this section, we will talk about important factors relating to availing loans for dairy businesses.

Eligibility requirements for dairy business loans

Below mentioned are certain individuals who are considered eligible to avail business loans: 

  • Farmers
  • Individuals
  • Limited companies and partnership firms
  • Business owners

Purpose of taking up loans

  • Purchase of animals
  • Farm construction
  • Purchase of milk machines
  • Shed construction
  • Dairy items
  • Farm equipment

Documents required at the time of availing loans

Below are certain documents which must be submitted by the loan applicant:

  • Proof of identity such as Voter ID, Aadhar Card, and PAN card, etc.
  • Proof of registration of the dairy business
  • Passport size photographs
  • Copies of property deeds

NABARD subsidy scheme for the Farming Sector

National Bank for Agriculture and Rural Development (NABARD) is a development financial institution which is set up with an objective of rural growth and development.

Dairy Entrepreneurship Development Scheme (DEDS) is a scheme designed especially for the farming sector.

 Below mentioned are the objectives of DEDS scheme:

  • Set up farms for milk production
  • Utilize the latest technology for an effective milk processing and distribution
  • Generate employment opportunities and introduce improvements in the infrastructure of the unorganized sector

Minimum requirements to consider before starting a Dairy Business / Farm

Considering elements regarding dairy businesses are important. These aspects play an integral role in the success of a dairy business. Below mentioned are certain elements that must be taken into consideration before moving forward with dairy business registration.

Selection of Breed

The first step in the business establishment process is to acquire a breed.  It is important to select the breed which will fulfill customer’s requirements. Depending on the city in which the individual is planning to set up the business, extensive research must be conducted which would help in the selection of the most suitable breed.

Arrangement of Shelters

It is important to ensure that the animals are kept in clean sheds that have proper ventilation so that they remain healthy and disease-free. For small scale production, which generally consists of 20 animals, they must be kept in 3000 square feet land area and if the production is the medium scale and it comprises of 100 animals, they must be kept in 13000 to 15000 square feet land area.

Feedingthe Animals

Animals must be fed quality food which includes green food. The food they have must be nutrition-rich. This will ensure that they are healthy. They must also be given fresh water at all times. A water tank must be arranged that has the capacity to hold 2000 liters of water.

What machines are used in dairy businesses?

Below mentioned are several milk machines which are required for efficient production and distribution of milk and milk products:

  • Milk Testing Equipment
  • Milk Storage Equipment
  • Milk Chilling Equipment
  • Milk Processing Plant

Creation of a Dairy Business plan

Developing a business plan for the business is important for all the members who are involved in the business as it serves as a guideline for the business.

Individuals must prepare a business plan that consists of details regarding the business. Some details that must be included are as follows:

  • Marketing strategy
  • SWOT and PEST Analysis
  • Company mission and vision
  • Operational requirements
  • Operational strategy

Dairy Business Registration Process

Once the loan application has been accepted and all the requirements are fulfilled, the next step is to register the dairy business and obtain a registration license. Individuals or firms are required to obtain APEDA Registration before starting business activities. Agricultural and Processed Food Products Export Development Authority (APEDA) was established by the Indian Government under the Act of Agricultural and Processed Food Products Export Development Authority.

Follow the APEDA registration steps for dairy businesses:

  • Sign up through APEDA website by selecting the option “Register as a member”
  • The applicant must enter details such as Import Export Code, Email ID and mobile number.
  • An OTP will be sent on the registered mobile number or email id which must be entered to verify all the details mentioned by the applicant.
  • The applicant must fill in the online application form and submit all the required documents along with it.
  • He must pay the registration fees of INR 5000 excluding taxes at this step.
  • Login details will be sent to the application after which he can login into his account.
  • The application status can be tracked by the applicant.

Documents required for APEDA Registration

Below are documents which are required for registering APEDA:

  • APEDA registration form
  • Bank certificate duly signed by authorities
  • Bank account statement of the last two months
  • Canceled cheque
  • Self - certified copy of Export Import Code

Licenses required for Dairy Businesses in India

Individuals require several licenses and permits to start a dairy business. In this section, we will talk about certain licenses which is required by the business owner of a dairy business:

FSSAI License

Provided by Food Safety and Standard Authority in India (FSSAI), FSSAI license is an important license which must be acquired by the dairy business owner. FSSAI license is categorized into three licenses namely State FSSAI License, Central FSSAI License, and Basic License. The business owner must select the type of FSSAI registration on the basis of the type and scale of the dairy manufacturing business. All the requirements must be considered before applying for a particular license type.

Basic food safety registration

Small businesses that have an annual turnover of below INR 12 lakhs can apply for Basic food safety registration.

State food safety registration

Businesses that have an annual turnover between INR 12 lakhs to 20 crores can apply for state food safety license.

Centralfood safety registration

Businesses with an annual turnover of more than INR 20 crores are eligible to apply to central FSSAI license.

GST Registration

It is mandatory to acquire GST Registration before starting a dairy farm/business.


Several factors must be taken into consideration before setting up a dairy business in India. Fulfilling all the essential steps is crucial in dairy farm/business incorporation. After the business's formation, the business owner can undertake different business activities to provide quality products to consumers.

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