Milk is ubiquitous in India – from the morning glassful that most middle-class school kids glug to its use in Hindu religious rituals. Now, it could become a headache for Prime Minister Narendra Modi’s government as prices soar. The average retail price of milk in India has increased by 12 per cent from a year ago to Rs 57.15 a litre. A mix of factors is at play – a jump in the cost of cereals has made cattle feed more expensive, coupled with lower dairy yields as cows were inadequately fed due to the pandemic rupturing demand at the time. 

In turn, milk – which has the second-largest weight in India’s food basket – pushes up overall inflation as well. India’s headline inflation for March fell below the central bank’s target of 6 per cent as high interest rates cooled overall demand. However, milk inflation trended higher than the overall figure at 9.31 per cent. 

High prices of milk and related products – emotive items that most poor families aspire to and wealthier people see as indicators of status – have the potential of becoming a political risk for Mr Modi’s government ahead of national elections next summer.

“This trend of higher milk prices is problematic, since it is a highly price-elastic product and has a direct impact on consumption,” notes R S Sodhi, the president of the Indian Dairy Association.