India's Dairy Sector Needs Digital Supply Chains to Compete Globally, Says Stellapps CEO

India remains the world's largest milk producer, with output reaching close to 248 million tonnes in the 2024-25 period. The dairy sector supports the livelihoods of more than eight crore families, primarily small and marginal farmers, and contributes approximately 6 percent to the national economy.

Despite this massive production scale, a notable paradox exists within the industry. India exports less than one percent of its total milk production. In comparison, countries like New Zealand produce a fraction of India's output but generate significantly higher revenues from global dairy trade.

Market analysts point out that the defining characteristic of Indian dairy is its fragmentation. Milk is predominantly sourced from millions of households keeping a small number of animals, resulting in yields of only a few litres per day per producer. A large share of this milk continues to move through informal channels involving multiple stages of collection, transportation, chilling, processing, and distribution.

Historically, India's dairy infrastructure has focused heavily on physical assets such as collection centres, chilling plants, processing facilities, and transportation networks. However, traditional supply chains often struggle to maintain the level of consistency, quality assurance, and traceability demanded by modern international buyers.

International markets increasingly require detailed data regarding milk origins, handling procedures, chilling timelines, farm-level controls, and compliance with standards concerning residues and contaminants. Issues such as antibiotic residues, aflatoxin, microbial quality, and cold-chain compliance directly influence whether dairy products gain access to premium markets or face rejection at borders.

To bridge this gap, industry leaders emphasize the need to integrate digital systems into the existing framework. At the farm level, digital records can monitor production, animal health, nutrition, and breeding. Technology at collection centres can measure milk quality and establish pricing structures based on quality parameters. During transit, sensors can track temperature and movement, while processing plants can utilize digital logs to link incoming milk batches with finished goods.

Rather than replicating dairy models built around large, concentrated farms in Western nations, stakeholders suggest leveraging India's distributed production network. By connecting smallholder farmers with modern infrastructure, quality standards, and data systems, the sector can enhance its productivity and global standing.

Technology companies operating in the sector, such as Stellapps Technologies, have spent over a decade implementing digital connectivity across farming, milk collection, chilling, transportation, and processing operations to address these systemic challenges.

"India's dairy sector has demonstrated remarkable capability in achieving massive production scale through millions of small farmers. However, unlocking global markets requires transitioning from basic physical infrastructure to advanced digital traceability and stringent quality controls. Technology-driven supply chains will be critical in transforming India from a domestic-focused producer into a trusted global dairy supplier." — Dr. Shishir Gupta, Founder & CEO, StartupLanes