BL Agri & Commodity Summit 2024: Amul to oppose import of dairy products at concessional duty under FTAs

The Indian dairy industry will oppose permitting imports of dairy products at concessional duty under free trade agreements (FTAs) to ensure the welfare of 10 crore farmers whose livelihoods depend on the milk sector, said Jayen Mehta, Managing Director, Amul (Gujarat Cooperative Milk Marketing Federation).

Responding to a question from businessline Editor Raghuvir Srinivasan in “Fireside chat” session at the businessline Agriculture and Commodity Summit 2024 on Australia seeking duty concession for its dairy products for imports into India, he said: “We will demand that Chapter 4 (which permits duty concession for imports) be kept out”.

‘No offensive interest’

“The Government is aware of the nuances and is supportive (of the dairy sector) in negotiations. It has told those taking part in such negotiations that agriculture and dairy are sensitive and no offensive interest can be allowed,” the Amul MD said.

“The European Union does not permit imports. We are ok with it. Canada imposes 250 per cent import duty (on dairy products) and the US 50-60 per cent. India, on the other hand, imposes 30 per cent duty for import of butter and 50-60 per cent milk powder,” said Mehta, adding that seeking duty concession for dairy imports was not right. 

The Gujarat Cooperative Milk Marketing Federation (GCCMF) has signed memorandums of understanding (MoUs) to invest ₹11,500 crore in the food sector. Amul plans to leverage its brand to tap the vast opportunity available.

“An Amul can be added every year in the Indian ecosystem. We need to have a sense of the consumer trend,” he said. GCCMF accounts for 3 crore litres of the 60 crore litres of milk a day handled nationally  through its 36 lakh farmer-members.

More biogas plants

On its borrowings, Mehta said Amul manages through internal resources, while the Centre’s scheme for strengthening infrastructure is also helping. “Then, with the strengthening of co-operatives which will create a strong co-operative ecosystem, money will not be an issue,” he said. 

Amul, which launched a compressed biogas project 2-½ years ago at Banas using cow dung, pays  ₹1/kg for dung. It is then converted into biogas and the slur from it is used as biofertiliser. The plant supplies compressed natural gas for over one lakh cars in the region. 

“We will be setting up more plants, while several plants are operating in rural India. We use the gas at our dairy plant in Varanasi resulting in a saving of  ₹0.40-0.50 per litre of milk,” Mehta said. 

A week ago, GCCMF was able to get hydrogen from the methane derived from the biogas, he said.

Entry into Lanka, Africa

On Amul’s entry into Sri Lanka and Africa, the cooperative’s Managing Director said Colombo had approached it as it was importing 70 per cent of its dairy products. 

“We have entered into a joint venture with a local company and the Lankan government will hand over a dairy plant. We have drawn a roadmap and we will start the project in the next few months,” Mehta said. 

Amul’s entry into Africa and countries such as Sri Lanka was to help improve domestic production for local use. “We will come up with similar models in several countries over the next few years,” he said,  adding that this was part of the G-20 South-South exchange.

With regard to Lanka, Mehta said India was aligned culturally and religiously with Colombo. “We are not entering these countries with any commercial interest in mind. India is reciprocating the support it got earlier. The perspective of development dominates over everything else,” he said. 

Expansion within country

Referring to various disputes in the country with regard to Amul expanding its operations, Mehta said, “No one is trying to dominate the other. We have three Nandini plants (in Karnataka) producing our ice creams, one in Puducherry also does this. A dairy in Salem, Tamil Nadu, processes milk at ultra high temperature,” he said.

The Ministry of Cooperatives is helping to build strong co-operatives. “We have co-operatives in two lakh villages. Of the remaining 5 lakh, we can have co-operatives in another two lakhs. Women will gain from this and this will help India gain,” he said. 

Amul has entered the protein-rich products sector tapping whey from cheese. It entered the sector since most of the Indians being vegetarians did not consume adequate protein in their daily food. 

Ice cream lounges

He said the co-operative will soon set up an “Ice cream lounge” in Connaught Place, New Delhi, where consumers can taste various world ice cream flavours. Eight such lounges have been set up in the last eight months including in Mumbai, Ahmedabad and Surat. “We will also be taking ice creams of India to the world,” Mehta said.  

On Amul challenging FMCG companies with its expansion, he said the co-operative could be a formidable force in the food and FMCG sectors. “We are building up a block of what consumers consume,” Mehta said. 

The company operates high volume at a low margin in the supply chain helping retailers and farmers get higher returns. “No other organisation operates with such high returns,” he said. 

The summit has been sponsored by State Bank of India and co-powered by NABARD in association with National Commodity & Derivatives Exchange Ltd (NCDEX) and INDOFIL Industries Ltd. Dhanuka Agritech Ltd and Kribhco Agri Business are associate partners.

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