The Delhi government’s recent GST rate revisions reduce taxes on essential items including dairy—milk, paneer, ghee, butter, UHT milk—making them 6–12 percent cheaper. While consumers benefit immediately, the move promises ripple effects across the dairy value chain: increased consumption, higher sales volumes, and improved farmer incomes.
Industry Insights (Dairy Focus):
The newly announced GST cuts in Delhi bring a major relief to households, especially in essential food items. Dairy products, long considered staples, now enjoy significantly lower tax burdens: paneer, UHT milk, butter and ghee will see meaningful price reductions. Under the new regime, a 200g paneer pack priced at ₹90 could cost roughly ₹85.70 post-tax. Similarly, dairy cooperatives and processors can expect renewed demand.
For dairy firms and cooperatives, these tax cuts lower the consumer price barrier, potentially boosting volume sales. As demand strengthens, processors may benefit from economies of scale, better recovery of fixed costs, and improved margins if input costs are managed efficiently. In turn, these gains can flow back to dairy farmers via higher procurement—and thereby improve rural incomes and livelihoods.
However, managing this demand surge will depend on robust supply chains, cold storage, and efficient distribution. Companies must be agile in scaling operations, maintaining quality, and meeting logistics challenges. Cooperatives and large processors (like AMUL, Mother Dairy) could play a pivotal role in aggregating supply and stabilising price volatility.
In sum, the GST reform in Delhi is not just a consumer relief measure—it offers a structural stimulus to the dairy sector, encouraging higher consumption, scale expansion, and stronger linkages down to the farmer.
Source : DAirynews7x7 Sep 26th 2025 Read full story here