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Strengthening India Mexico Partnership: Animal Husbandry and Dairy

India and Mexico share a long and cordial bilateral relationship and share common views on geo-climatic conditions, biodiversity, physiognomy, people, culture, family values amongst other wider range of issues.

Our strong economic partnership spans across bilateral trade and investment in various sectors. In 2019-20, the trade between the two countries stood over $7.9 bn with the top three products being fish, dairy produce, and products of animal origin.

Considering the trade patterns, India and Mexico can further their economic interest through mutually beneficial collaborations through trade and investment in the Animal Husbandry and Dairy Industry.

Animal Husbandry and Dairy Sector Overview

Dairy

India has the highest milk production in the world with a total production of 198.4 MMT in 2019-20. Milk contributes 26% to the total agricultural Gross Domestic Product (GDP) and is the single largest agricultural commodity with a 4% share in the Indian economy. The leading milk producing states being, Uttar Pradesh (30 MMT), Rajasthan (23 MMT), Madhya Pradesh (16 MMT), Andhra Pradesh (15 MMT) and Gujarat (15 MMT), making up 54% of the total milk produced. India’s per capita consumption of milk has increased from 307 gm/day to 406 gm/day in 2019-20.

In 2019-2020, India exported 51,421.85 MT of dairy products worth $186.71 mn with major destinations being the United Arab Emirates, Bhutan, Turkey, Egypt, and the United States of America.

Animal Husbandry

India is ranked number 1 in the total livestock population, total bovine production, cattle population and buffalo population. According to the 20th Livestock Census 2020, the total livestock population in India is 536.76 million. India is also the largest exporter of sheep and goat meat in the world and major export destinations being United Arab Emirates, Saudi Arabia, Qatar and Kuwait.

India has the largest population of milch animals in the world with 110 million buffaloes. In 2019, India's exports of livestock products $3,694.29 mn of which Buffalo Meat export was $3175.09 mn. Buffalo meat dominated the exports with a contribution of over 89.08% in total Animal Products export from India. In 2020, the demand for overall animal feed in India was valued at $7,343.6 mn with a growth rate of 4.2%.

India’s per capita egg availability is expected to increase to 93 eggs/annum by 2022-23 and per capita consumption of broiler meat is expected to increase to 9.1 kg per person per year by 2030.

Both, the dairy and the animal husbandry industry in India is growing at an exponential rate and provide massive opportunities for growth and investment.

Opportunities for Investment in the Animal Husbandry and Dairy sector of India

Dairy

The dairy industry in India has the potential to add 115-125 MMT of milk processing infrastructure over the next 5 years. A standalone chilling plant with 2000 LPD capacity of operations offers a potential of 17% returns with 6-year payback and procurement. A chilling plant using a 2000 LPD set-up offers a potential of 19% returns with 5-year payback.

Additionally, emerging Value-Added Dairy Products (VADPs) like Lassi, Flavored Milk, UHT, Probiotics, Cheese and Whey will be looking at a Compounded Annual Growth Rate (CAGR) of approximately 25% on an average in the coming years

Animal Husbandry

India presents immense opportunities in the animal husbandry sector with the major drivers for the livestock market being increasing consolidation of livestock farms, increasing herd size of dairy farms, increasing adoption of livestock farming robots and livestock monitoring devices. Additionally, increasing global demand for dairy products, extended profitability, high yield, minimum impact on the environment and climate change are fueling the growth of the precision livestock farming market. India has also started using technologically advanced reproductive procedures with genome selection, genetic information, and better vaccination techniques for livestock.

The fitness industry in India which is a major market for protein sources such as eggs and broilers, is expected to grow by 7% CAGR. Due to higher dietary recommendation of 180 eggs and 11 kg meat, the egg industry is expected to grow 5 times and broiler industry is expected to grow 10 times.

Compound feed is a profitable investment opportunity with a potential of 17% returns and a payback within 9-12 years. The Compound feed market is projected to grow at 16% over next 5 years driven by low organic feed market, penetration, increasing formal offtake, etc and its requirement is set to double over next 5 years from 2019 to 2024 with potential capacity addition of 10-18 MMT.

In 2020, the demand for overall Animal feed in India is valued at $8,358.9 mn with a growth rate of 4.3% over the previous year. Growing at 15% CAGR, the animal feed market is predicted to double and reach INR 42,000 crore ($6 bn) by 2025.

Lastly, by product utilization of meat also holds massive potential for the industry. It is estimated that 7.5% income from pork comes from its byproducts.

Following the clarion call for ‘atma nirbhar bharat’ and ‘Vocal for Local’ announced by Prime Minister Narendra Modi, India is continuously making efforts to ramp up infrastructure and localise supply chains. Animal Husbandry and dairying is one of the champion sectors for India, therefore, presenting immense potential. The two countries of India and Mexico can collaborate within the sector and boost their mutual partnership.