India’s largest dairy cooperative, Amul, has announced that it will pass on 100% of the recent GST (Goods and Services Tax) reductions to both consumers and farmers. Managing Director Jayen Mehta emphasized that the cooperative’s unique business model ensures that the benefits of reduced GST will be shared fairly.
“We will definitely increase our share of the consumers’ revenue to the producer in a much larger way, so it benefits both producers and consumers,” said Mehta.
This statement comes at a crucial time when the dairy sector is witnessing double-digit growth and increasing consumer demand for value-added dairy products.
Amul Managing Director Jayen Mehta highlighted that half of Amul’s turnover now falls under the zero percent GST category, while the other half is taxed at only 5%.
“Half the products that we do, or half of our turnover, come with 0% GST, and the balance half with just 5% GST,” he explained.
According to Mehta, the GST cuts will directly benefit both sides of the supply chain:
Consumers will enjoy lower prices on essential dairy items.
Farmers will earn more, as the cooperative increases the share of consumer revenue going back to producers.
He added:
“We have been growing at double digits all through last year and the first five months of this year. We will obviously look at higher double-digit growth now, because this will mean a lower price for the consumers and a sustained demand for the producers.”
Mehta pointed out that India’s per capita dairy consumption remains very low, opening a huge market opportunity.
“Only one in 10 Indian consumers eats butter. Only one in 20 eats cheese. So you can imagine that with lower prices and sustained lower prices, we will see this category expanding multiple times,” he said.
With GST cuts, Amul expects rising demand for:
Ghee
Cheese
Butter
Ice cream
This surge in demand could transform India’s dairy consumption landscape, making value-added dairy products more accessible to middle-class households.
On the producer side, Mehta underlined that Amul already pays some of the highest farm-gate prices in the industry:
Buffalo milk: ₹60–64 per litre
Cow milk: ₹40–45 per litre
Currently, farmers receive 80–90% of the consumer price, and with the GST cuts, this proportion will rise further.
Mehta explained how lower GST rates will improve transparency in the industry:
“With 5% duty, adulteration will come down, tax evasion will come down. The organised sector will grow, and you will see multiple growth happening in that.”
To keep up with the rising demand, Amul is aggressively ramping up its production capacity.
Capacity has already been tripled in some product segments.
By the end of the financial year, Amul plans to expand capacity 7–8 times.
Mehta said:
“Good demand is always good for the brands, and when you see stock out, it means it is sold out most of the time. Nobody wants a stockout situation for disappointed customers.”
This expansion underlines Amul’s strategy to stay ahead in India’s fast-growing organised dairy market.
Amul’s decision to pass on GST benefits to both consumers and farmers underscores its commitment to inclusive growth. By making dairy products more affordable and rewarding farmers with better prices, Amul is setting a benchmark in India’s food sector.
The GST cuts will not only increase consumption of value-added dairy products like cheese, butter, ghee, and ice cream but will also boost transparency and reduce tax evasion, strengthening the organised dairy market. With robust expansion plans and growing demand, Amul is well-positioned to continue its double-digit growth trajectory, benefiting millions of farmers and millions more consumers across India.