§1What this business is
Milk is pasteurised and separated, preheated, concentrated in an evaporator under vacuum and spray-dried into powder, then packed away from moisture and air. The report takes 7.5 litres of milk for 1 kg of powder. Milk powder is used to make recombined milk, milk chocolate, ice cream and animal feed, and sells to households and food makers.
Capacity: 100 kg of powder a day, 30,000 kg a year (300 days) in the financials; year 1 at 75% (22,500 kg). The technical note says 500 kg a day — the figures differ.
§2Is it right for you?
Who it is for
Someone in a milk-surplus belt with dairy experience and steady milk procurement.
Who it is not for
Someone expecting quick profits — the report shows a high break-even.
Advantages
- Powder keeps for months, unlike liquid milk
- Used by sweet, chocolate, ice-cream and bakery makers
- Takes surplus milk off farmers in the flush season
- Machinery list is short and clear
Drawbacks
- High break-even (60%) and thin net margin
- Needs 7.5 litres of milk per kg — milk cost dominates
- Large dairies sell powder at scale
- Spray drying needs steady power and skilled operators
Skills you need
- Milk procurement and testing
- Evaporator and spray-dryer operation
- Moisture-proof packing
- Selling to food manufacturers
Why difficulty 4/5: Technical drying process, high break-even and dependence on milk prices.
§3Market
Who buys
- Households
- Chocolate, ice-cream, sweet and bakery makers
- Animal feed makers
How it sells
- Bulk supply to food manufacturers in 25 kg bags
- Retail tins through shops
Good to know
- The report says the Indian skimmed milk powder market grew at nearly 10% a year during 2011–2018.
§4Raw material & machinery
| Item | Qty | Cost |
|---|---|---|
| Storage tank | 2 | ₹2,40,000 |
| Feed pump | 2 | ₹27,000 |
| Pre-condenser | 2 | ₹50,000 |
| Spray drier | 2 | ₹2,00,000 |
| Baby boiler | 2 | ₹2,00,000 |
| Chilling plant | 2 | ₹3,00,000 |
From: PMEGP sample project report — Milk Powder (prepared by Udyami/Samadhan)
- Milk2,25,000 litres a year at full capacity, ₹30 a litre; 7.5 litres make 1 kg of powder
- Chemicals (citric acid, magnesium oxide, NaCl, CaCO3)₹2.50 lakh a year (lump sum, with other material)
- Tin containersfor one-kg packs
From: PMEGP sample project report — Milk Powder (prepared by Udyami/Samadhan)
In our raw material database
§5Licences & registration
- FSSAI licence
- Udyam registration
- GST registration
- Trademark for your brand (if needed)
- State pollution control board consent (dairy effluent)
§6Schemes & subsidies
- PMEGPCentralActive15–35% subsidy
- PMFMECentralUnclear35% subsidy, up to ₹10 lakh
- AIFCentralUnclear3% interest subvention, up to ₹2 crore
- CGTMSECentralActiveNo collateral, up to ₹10 crore
PMEGP (the report is a PMEGP sample), PMFME for small food processors, AIF (dairy processing) and CGTMSE.
§7Money
How the investment is worked out: Report: building/shed 2,000 sq ft ₹4.00 lakh, plant & machinery ₹10.17 lakh, furniture ₹1.00 lakh, working capital ₹6.11 lakh = ₹21.28 lakh.
Working capital: Working capital ₹6.11 lakh, of which bank ₹5.50 lakh; 1 day of raw milk and 7 days of finished stock.
Year not printed on the report — check current machinery prices.
§8Export potential
Confirm the HS code in the DGFT ITC(HS) lookup before you export
Export council / board: APEDA
- Confirm the 8-digit ITC(HS) line with DGFT or your customs broker.
- You need an Import Export Code (IEC) from DGFT before the first shipment.
- Milk powder exports are sometimes restricted by DGFT; check the current policy.
§9Risks — where people fail
- Milk price rises in the lean season
- Low powder prices when big dairies have stock
- Moisture damage
- Power cuts during drying
§1030 / 60 / 90-day plan
A general plan that applies to any business. A plan for this business will be added after research.
- Days 1–30: Visit a working milk powder unit unit, ask 10 buyers about price and quantity, and get quotations from 3 suppliers.
- Days 31–60: Udyam and the licences you need (FSSAI licence, Udyam registration), a project report (DPR), and the scheme or loan file.
- Days 61–90: Space and machines, trial production, and first deliveries to 10 customers.
§11Who to connect with
Associations, clusters and training institutes — the directory is being built. Connect
§12Watch
There is no episode on this business yet. Shows are coming soon on the Podcast page.
Want to start Milk Powder Unit?
DPR, loan file or registration — ask us on WhatsApp.
¶Sources
Data review: 6 October 2026. Spotted a mistake? Report it. For information only — not legal or financial advice.
