Milk and Milk products have traditionally formed an important
part of the average Indian diet. However, both the productions of milk and its processing are largely restricted to households and to the cottage industry sector. West Bengal has a large market for milk-based sweets and an untapped potential to increase its production through the cooperative network.

Market Scenario:

• The largest chunk of milk and milk products is consumed by the domestic market. Exports till date are not significant.

• Value added milk products have been increasing in popularity owing to intensive advertising and promotional efforts. Branded products have entered the market in a big way.

• The domestic market in itself is large and there is scope for investment.

• West Bengal has a large ‘chana’ (Indian Cottage Cheese) market catering to the local sweetmeat demand.

• Daily ‘chana’ trade in Natunbazar, Kolkata alone is 30 MT and the daily production and consumption of ‘chana’ in various forms in the state is several times this quantity.

Scope and Range of Value-added Milk Products:

• Ghee (clarified butter), Curds, Butter, Cheese, Khoa, Channa, Milk powder, Baby Food, Dairy Whitener, Malted Foods and Condensed Milk are some of the processed milk products. Any investment in processed western milk products would be lucrative as 90% of the demand in the state is presently met by imports.

• The sweetmeat and ice-cream industries also have tremendous scope to offer in terms of value addition.

• Ice-Cream Industry: There is tremendous scope for ice-cream industry in the state. With proper investment in infrastructure, the sector has the potential to become very profitable. At present there is a significant amount that is being imported from other states, leaving scope for further investment. The state, also being one of the few power surplus states in the nation enjoys an advantage for setting up of cold storage required in the ice-cream industry 

• Sweetmeat Industry: Within India, the sweetmeat industry in West Bengal is famous throughout the world for its wide range of products like ‘Rasogolla’ and ‘Sandesh’. Bengali sweets have made a mark for itself in both domestic and ethnic exports markets. The NRI population and people of South Asian origin around the world offer a decent export market. Tinned rosogullas have already been exported from the state.
 

This shows the vast opportunity for investment in value added dairy products in the state, as most of the products are imported from outside. Overall the milk and milk products industry possess investment potential, which is yet to be explored.

Availability of milk in the state:

Milk production in the state has been steadily increasing over the past few years. In spite of increasing milk production, the state still today is a net importer of milk, which shows opportunity for investment in this field. The major milk producing districts of the state are Burdwan, Nadia, Hooghly, Murshidabad and Midnapore.

State Government Initiatives in increasing the supply of milk:

• The State Government has set up Five Dairies in the state. The sale of milk by the Government dairies increased to an estimated 158 thousand litres per day on an average in 2002-03 from 142 thousand litres per day in 2001-02.

             • The State Government has entrusted the West Bengal Cooperative Milk Producers
Federation Ltd., the apex body of milk cooperatives, to develop dairy sector in the ANAND
pattern. The state has a well integrated 3-tier system of procuring milk. The milk cooperative sector consists of 2400 primary milk producers cooperatives at the village level, 14 District Milk Unions at the district level and the State Milk Federation at the State level.

• The Federation manages the Mother Dairy Plant at Dankuni, Himul Milk Union at Matigara, Darjeeling, Dairy Plant of Bhagirathi Milk Union at Berhampore, Murshidabad and the Metro Dairy Plant (in which the Federation holds 47 percent equity). In addition the Federation controls dairies at Bolepur, Uttar Dinajpur and Coochbehar. It also has 25 Chilling Plants with total capacity of 1388000 LPD. 

• The Federation is also involved as a partner in other joint sector dairies like Bengal Nestor Limited at Burdwan, Vidyasagar Dairy at Hooghly and Bengal Dairy Limited at Paschim Midnapore.

Policy and Regulations in Milk and Milk Products sector:

• Milk production regulated by Milk and Milk Products Order. The order requires no permission for units handling less than 10,000 litres of liquid milk per day or milk solids upto 500 tonnes per annum.

• Full foreign equity participation automatically approved (except for malted foods). Ice cream manufacture dereserved. No license required for setting up large-scale production facilities for manufacture of ice cream.

• Exports of some milk based products freely allowed on satisfying BIS norms.