India’s dairy sector is exploring Anhydrous Milk Fat (AMF) as a potential high-value export opportunity. Despite producing nearly 248 million tonnes of milk in 2024–25, India exports less than 1% of its total milk output, highlighting the gap between production scale and global market participation.
AMF is a highly refined dairy ingredient containing more than 99.8% milk fat. It is widely used by international food manufacturers in bakery products, confectionery, processed foods and infant-formula applications. Unlike consumer-focused ghee, AMF is a standardised industrial ingredient that can be supplied through long-term contracts.
However, India faces a major challenge: strong domestic demand for milk and dairy products. Large-scale exports can tighten local supplies and increase prices, prompting the government to impose export restrictions during periods of shortage.
To address this conflict, the proposed strategy involves using bonded processing zones or Special Economic Zones (SEZs). Under this model, processors could import butterfat or other dairy inputs, convert them into value-added AMF, and re-export the finished product without placing additional pressure on India’s domestic milk pool.
The approach could help Indian dairy companies access markets in the Gulf, Africa and other regions where demand for reliable industrial dairy ingredients is growing. It may also encourage investment in advanced processing, quality control, traceability and export-oriented infrastructure.
Nevertheless, India’s global AMF ambitions will depend on consistent raw-material availability, international quality compliance, competitive pricing, logistics efficiency and clear government policies. The opportunity is significant, but success will require a shift from fragmented commodity exports towards specialised, value-added dairy ingredients.
Source: Dairynews7x7 14 Sep, 2026 Read full story here
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