With volumes secured, the focus shifts to value as Budget 2026 is seen as pivotal for reshaping agriculture and dairy economics

As expectations build around Union Budget 2026, industry stakeholders anticipate a continuation—and deepening—of the government’s capital-led approach to agricultural development, with a sharper emphasis on efficiency, resilience, and income enhancement rather than mere output expansion.

Budget 2026 is widely expected to scale up capital allocations across irrigation, post-harvest infrastructure, and rural logistics, aiming to curb supply-chain losses and stabilize farm incomes. Greater institutional backing for agriculture is also anticipated through the expansion of eNAM, wider adoption of data-driven advisories, and increased use of remote sensing technologies to improve both productivity and price discovery. At the policy core, Minimum Support Price (MSP) is expected to retain its centrality, with industry watchers looking for broader regional coverage and quality-linked procurement mechanisms to better align farmer incentives with market demand.

Within this broader agricultural framework, India’s dairy sector continues to stand out as a cornerstone of rural livelihoods. Accounting for a significant share of agricultural and allied output, dairy provides steady, daily income to millions of smallholder households. Milk production has expanded from approximately 146 million tonnes a decade ago to over 239 million tonnes in 2023–24, while per-capita availability has climbed to nearly 471 grams per day, well above global averages—underscoring both the sector’s scale and its maturity.

Against this backdrop, policymakers are expected to pivot decisively from volume-driven expansion to value-led dairy development in Budget 2026. Industry participants anticipate targeted investments in cold-chain infrastructure, bulk milk chillers, processing facilities, breed improvement, and animal health systems. Enhanced support for value-added dairy products and export-oriented capacities is also expected to help India deepen its presence in international markets, while raising rural incomes without placing undue pressure on raw milk production.

Commenting on the evolving policy landscape, Brahmani Nara, Executive Director, Heritage Foods Ltd, highlighted the structural shifts underway in the organized dairy sector and outlined key priorities for the upcoming Budget.

“The September 2025 GST rationalization has created favourable conditions for organized dairy, with consumer preference clearly shifting toward high-protein, health-focused products like paneer, cheese, ghee, and butter. Government initiatives, including the Rashtriya Gokul Mission and the National Digital Livestock Mission, are steadily integrating our 300,000-plus farmers into the organized ecosystem.

For the Union Budget 2026, we propose three priorities. First, subsidized access to quality feed and chromosome-sorted semen to improve animal productivity and support the aggressive dairy push that the Indian government has already announced. Second, expanding veterinary college capacity; India has 68,000 registered veterinarians against a requirement of 1.1 to 1.2 lakh. Third, increasing capital subsidies for mini-dairy units, particularly for women entrepreneurs, to generate rural employment and strengthen decentralized procurement.”

Industry observers note that such measures would not only address long-standing productivity and capacity constraints but also accelerate the transition of Indian dairy from a subsistence-led model to a globally competitive, value-added food system. As Budget 2026 approaches, the sector views this moment as a critical opportunity to align public investment, institutional reform, and private enterprise toward a more resilient and inclusive rural economy.

— Suchetana Choudhury (suchetana.choudhuri@agrospectrumindia.com)