India, the world’s top milk-producing country, is home to four times as many people as the United States and nearly seven times as many cows. The country is the world’s largest butter producer, and a recent Global Agricultural Information Network (GAIN) report predicted that Indians would consume 7.1 million metric tons of butter in 2025. That’s nearly four times as much as second-ranked Europe, noted Sarina Sharp, analyst with the Daily Dairy Report.
“India’s butter output outpaced its colossal 2024 consumption and is expected to do so again this year, thanks to successful efforts to boost Indian milk output. India’s butter surplus has dragged down prices and boosted exports,” Sharp said. “The country’s butter values slumped to multi-year lows in early 2024, making domestic butter far cheaper than product from traditional exporters, including Europe, New Zealand, and the United States. Bargain pricing prompted a surge in international sales.”
Last year, India sold 55,000 metric tons of butter abroad, its highest volume ever, and exports remain strong in 2025. The uptick in India’s butter exports has helped the country’s butter market rebound from last year’s lows.
“While Indian butter is still significantly less expensive than butter from New Zealand and Europe, the weaker dollar and setback in U.S. prices have also given American butter an advantage in some markets. But the presence of Indian butter, an affordable alternative, on world markets could keep pressure on U.S. butter prices, which have also been weighed down by overproduction,” Sharp said.
While India is gradually becoming an exporter of butter, its dairy industry remains highly protected, Sharp noted. India’s policy restrictions and high tariffs limit the ability of the U.S. dairy exporters to increase market share in the country.
Albumin and lactose are among India’s top dairy imports, and they have been increasing significantly in recent years. These dairy ingredients are used primarily in manufacturing of non-food applications, such as pharmaceuticals and dietary supplements, according to the Indian Times. U.S. dairy exports to India consist mostly of milk whey, albumin, and lactose.
In late May, an Indian trade delegation will travel to the United States to continue negotiations on a bilateral trade agreement between the two nations. However, a significant easing of India’s dairy protectionism is unlikely. Top policymakers in India have recently voiced concern that easing or eliminating import restrictions on dairy could disrupt the financial well-being of its 80 million farmers.
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