Union Budget 2026: Dairy industry seeks tech-driven reforms to empower farmers

Prior to the Union Budget for FY 2026–2027, the dairy industry has called for increased government support for digital transformation throughout the supply chain, better farmer access to capital, and incentives for cold-chain adoption to increase exports, productivity, and quality.

According to Ranjith Mukundan, CEO and co-founder of Stellapps Technologies, digital intervention is critical for a sector that supports nearly 80 million smallholder farmers and underpins India’s ambition to emerge as a global protein hub.

“The Indian dairy segment is quite massive, with around 80 million smallholder farmers, 300 million cattle and milk production at scale,” Mukundan said, adding that end-to-end digitisation would help improve productivity, quality and traceability in a sustainable manner.

He further said that, the government should enable wider adoption of digital tools to help farmers gain access to better capital, loans and insurance by ensuring reliable data capture across the value chain.

“The farmer should get access to better capital, more loans and more insurance, which is only possible if there is digital intervention that helps collect data in a very reliable fashion,” he said.

In order to promote investment in cold-chain infrastructure—which is essential for preserving product quality and lowering losses, especially as demand for value-added dairy products increases—the dairy industry has also called for specific incentives.

Mukundan predicts that in 2026, consumer preferences in tier-II cities and metro areas will continue to drive demand for high-protein products, lactose-free dairy, and next-generation offerings like yoghurt and fruit-infused yoghurt.

“I see a robust demand for high-protein products and products that are rich in dairy nutrition, especially in the major metros as well as in tier-two cities,” he said, adding that the macroeconomic environment is likely to remain supportive.

Mukundan said export prospects are also improving, citing new market opportunities following recent trade agreements.

“I foresee exports picking up in a big way, especially to the European Union and the Gulf countries,” he said.

However, he flagged rising input costs and climate volatility as key challenges for the sector in 2026. “Input prices are going up for dairy farmers, particularly cattle feed and nutrition, and climate volatility is adding to price fluctuations between flush and lean seasons,” he said.

Mukundan said policy support should focus on enabling smallholder farmers to become more entrepreneurial through digital adoption, better market access and differentiated pricing for higher-quality milk.

He also underscored the role of the food regulator in strengthening quality standards and consumer awareness. “FSSAI has an important role to play in improving quality on both the supply side and the demand side,” he said.

Stellapps Technologies is an Indian dairy-tech company that specialises in using IoT, AI, and cloud analytics to digitise the dairy supply chain. It provides solutions for cold-chain management, milk quality monitoring, cattle productivity, and farmer-facing financial services.