Gujarat’s Anand district is home to one of India’s largest and oldest cooperative dairy societies- the Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF), better known by its brand Amul, which was at the forefront of pioneering the first Dairy Revolution in the country back in the 1970s.

Despite tepid growth, Amul recently announced that it would invest over Rs 200 crore into two buffalo milk production facilities in Anand and double their capacity.

The PLI gambit

To understand the ongoing churning in Anand, and across Gujarat, we need to look back to the government’s announcement. On 31 December 2020, a high-level meeting at the Cabinet Secretariat cleared the rollout of a special scheme to coincide with the start of the New Year — an outlay of nearly Rs 10,900 crore for production linked incentives (PLIs) in the food processing sector.

Mozzarella Cheese

India was absent from the list of top ten producers of cheese in the world, let alone mozzarella- a specialty that originated in Southern Italy but is now universally consumed, and is a primary ingredient in that ubiquitous food — pizza. Cheese production in India accounts for less than one per cent of total dairy item production, and its household penetration is currently no more than five per cent. While India is a leading producer and consumer of dairy products, its dairy production and consumption is centered around milk products like paneer, butter, ghee etc. Critics predicted that there would be few or no takers for this initiative, and that it would be a non-starter.

The Ministry of Food Processing Industries finally shortlisted and selected 60 different companies for the Food Processing PLI Initiative, four of which were in the mozzarella segment – Parag Milk Foods Ltd, Gujarat Co-Operative Milk Marketing Federation Ltd (GCMMF), Sunfresh Agro Industries Pvt Ltd and Indapur Dairy and Milk Products Ltd.

Opening up new markets

Amul’s ambitious plan pivoted around buffalo milk-based mozzarella, unlike the normally used cow milk. This variant is widely considered to be more flavorful, superior, and richer in protein and fat content. The mozzarella PLI turned out to be a remarkably well conceptualised move which would eventually result in a win-win for all parties involved. Buffalo farmers now have a guaranteed market for their milk and incentives to promote buffalo milk production while Amul and other dairy players who were facing saturated dairy markets now have a whole new market opened up to them.

Conclusion

India currently imports the bulk of its specialty cheese, including mozzarella. Access to markets such as Europe for Indian dairy products are currently restricted. But with investments into cheese production and improving quality, India will eventually leap-frog as a global cheese exporter. With European exports of cheese products restricted by Russia due to the ongoing Ukraine conflict, new markets for Indian dairy are opening up. With the boost from the Mozzarella PLI, a non-tariff incentive that was designed specifically to be in compliance with global trade agreements, India will reduce its dependence on imports, in line with the grander vision of creating an Aatmanirbhar Bharat, and is all set to launch a new White Revolution — this time powered by cheese.