Start small with a few good milch animals and a buyer already lined up, usually your village cooperative, a local dairy or direct customers in a nearby town, because milk must be sold every day. Feed and fodder are the biggest running cost and decide yield, so grow or contract green fodder and balance rations before you buy animals. Selling milk needs an FSSAI Registration, Rs 100 a year for a dairy business up to Rs 1.5 crore turnover, a State Licence (Rs 5,000) up to Rs 50 crore and a Central Licence above. Larger plans have government support: NDDB runs a 50% capital subsidy, capped at Rs 2 crore, for breed multiplication farms of at least 200 milch cows or buffaloes, and the Animal Husbandry Infrastructure Development Fund gives interest subvention on loans for processing milk into products. Smaller units borrow through MUDRA, up to Rs 20 lakh. What kills most dairies is buying animals on credit before the fodder and the buyer are sorted, then losing yield to poor feeding.
The FSSAI's current table of which food business needs which licence and what it costs a year, revised from 1 April 2026: most businesses up to Rs 1.5 crore turnover need only a Registration at Rs 100, a State Licence costs Rs 5,000 up to Rs 50 crore, and a Central Licence Rs 7,500 above that. Importers, merchant exporters and businesses registered as e-commerce need a Central Licence whatever their size, and hawkers pay nothing.
NDDB's guidance on feeding dairy animals, including ration balancing, bypass protein and quality-marked cattle feed, which decides both milk yield and the biggest running cost.
A scheme run through NDDB for larger dairy entrepreneurs: 50% capital subsidy limited to Rs 2 crore for sheds, equipment and elite animals, for a farm of at least 200 milch cows or buffaloes with a bank loan for the rest.
The online application for the government's fund that gives interest subvention on loans for dairy processing and value-addition units, applied through a lender after screening by the ministry.
The four MUDRA loan bands for a micro business, given through banks and NBFCs: Shishu up to Rs 50,000, Kishore up to Rs 5 lakh, Tarun up to Rs 10 lakh and Tarun Plus up to Rs 20 lakh.
