A reduction in Goods and Services Tax (GST) on dairy products from the existing 12% to 5% could be a game-changer for India’s dairy industry, according to RG Chandramogan, Chairman of Hatsun Agro Product. In an interview with NDTV Profit on Thursday, he said the proposed GST reforms could empower farmers, spur demand and position India as a global dairy export powerhouse.
“We could be a world power in exports and farmers will also benefit and the urban-rural gap will be bridged in a big way. All dairy products, including ice cream, have to be considered at 5%, instead of the slab of 5%, 12%, 18% etc.,” he said.
Chandramogan is hopeful of a positive outcome following Prime Minister Narendra Modi’s announcement on the expected rollout of next-generation GST reforms by Diwali in his Independence Day speech.
India is the world’s largest milk producer with an annual milk production of 240 million tonnes. However, its dairy exports remain a mere one million tonnes compared to New Zealand’s 20 million tonnes, which accounts for 35% of the global dairy trade. Chandramogan attributed this gap to heavy taxation, particularly 12% GST on products like ghee.
“World trade is only 60 million tonnes and this is only 25% of India’s production. We were importing French fries. We are now exporters. We have been exporting basmati rice. We can also do it in dairy in a big way,” the top executive said.
