India undoubtedly has the largest dairy industry in the world in terms of milk production; Last year, India produced about 146.31 million tons of milk, 50% more than the United States and three times more than China.
The export of dairy products from India to the world was 54,762.31 MT worth Rs. 1,491.66 Cr (201.37 million USD) in 2020-21. The main export destinations for Indian milk are the United Arab Emirates, Bangladesh, the United States of America, Bhutan and Singapore.
The Department of Commerce launched the Transport and Marketing Assistance Scheme (TMA) for certain agricultural products in February 2019, which aims to provide assistance related freight to exporters and marketing of agricultural products. This scheme was prepared to overcome the problem of the higher cost of export transportation of certain agricultural products and promotion of brand awareness of Indian agricultural products in specified foreign markets.
The TMA was recently revised for exports that are affected from April 1, 2021 to March 31, 2022. The new revision includes dairy products that were not covered by the previous scheme. The revision also increased assistance rates, by 50 percent for export by sea and 100 percent for export by air.
At the same time, India's "specific agricultural products", which are exported to the Gulf States, are increasingly receiving financial support for the transport of goods. These products, which have already received some export financing, now receive 50 percent more transportation support when exported and shipped overseas by sea.
However, if those agricultural exports are made by air, they can receive 100 percent freight subsidies. The 100 percent freight subsidy will be a boost for exports of dairy products, which are inherently perishable and must be transported by air. The "revised support for the transport and marketing of specified agricultural products" with increased assistance rates will now be in effect until the end of March next year. Exporters estimate that their shipping costs increased by 300 percent last year, in part due to COVID19 outages.
Increased assistance under the revised regulation is intended to provide much needed support to Indian exporters of agricultural and dairy products meet rising transport and logistics costs.