From desert to dairy giant: Rajasthan’s rise in milk production

Rajasthan has been recording a higher milk production

India’s protectionist stance in trade negotiations with the US, particularly regarding its dairy sector, is likely to benefit Rajasthan more than any other state, according to a Moneycontrol analysis.

The desert state has overtaken Uttar Pradesh to become India’s largest milk producer since the pandemic, accounting for 16 percent of the country’s total milk output. Between 2020–21 and 2023–24, Rajasthan's real gross value of output from milk averaged Rs 91,226.9 crore, compared to Rs 87,447.6 crore for Uttar Pradesh, according to a recent report released by the Ministry of Statistics.

Before the pandemic, Rajasthan was the second-largest milk producer, contributing 12.8 percent of India’s milk, while Uttar Pradesh led with 16.6 percent.

Rajasthan isn’t alone in contributing to India’s growing milk economy. Madhya Pradesh recently overtook Gujarat to become the fourth-largest milk-producing state. In 2022–23, Madhya Pradesh accounted for 7.5 percent of the country’s milk output, compared to Gujarat’s 7.3 percent. The state's share further rose to 7.6 percent in 2023–24.

Rajasthan and Madhya Pradesh are the only two states that have seen a significant increase in their share of national milk production between 2011–12 and 2023–24. Rajasthan’s contribution rose by 4.4 percentage points during this period, while Madhya Pradesh saw a gain of 2.2 percentage points.

This shift comes at a time when India’s reliance on milk is growing. In 2023–24, milk production—worth Rs 6.1 lakh crore—accounted for 20.5 percent of India’s total agricultural output, up from 17.2 percent in 2011–12.

For Rajasthan, the dependence is even higher. Milk contributes a third of the state’s total agricultural output, up from 22.9 percent a decade earlier. In comparison, milk's share in Uttar Pradesh’s agricultural output was 25.9 percent in 2023–24, marginally down from 26.1 percent in 2019–20.

India’s consumption basket also reflects this growing reliance. In rural households, 8.4 percent of total expenditure goes to milk and milk products, up from 8 percent in 2011–12. In urban households, the share rose to 7.2 percent from 7 percent over the same period, as per the Household Consumption Expenditure Survey.

Dairy has been one of the points of contention between India and the US, with Indian negotiators trying to keep agriculture and dairy out of the purview of the trade deal being discussed between the two countries.