§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

ItemQtyCost
Storage tank2₹2,40,000
Feed pump2₹27,000
Pre-condenser2₹50,000
Spray drier2₹2,00,000
Baby boiler2₹2,00,000
Chilling plant2₹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

Milk (raw) →

§5Licences & registration

  1. FSSAI licence
  2. Udyam registration
  3. GST registration
  4. Trademark for your brand (if needed)
  5. State pollution control board consent (dairy effluent)

We can do this registration for you

§6Schemes & subsidies

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.

How to prepare a loan file

§8Export potential

Confirm the HS code in the DGFT ITC(HS) lookup before you export

0402.10Milk powder, fat content not over 1.5% (skimmed milk powder)0402.21Milk powder, fat over 1.5%, unsweetened (whole milk powder)

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.

  1. Days 1–30: Visit a working milk powder unit unit, ask 10 buyers about price and quantity, and get quotations from 3 suppliers.
  2. Days 31–60: Udyam and the licences you need (FSSAI licence, Udyam registration), a project report (DPR), and the scheme or loan file.
  3. Days 61–90: Space and machines, trial production, and first deliveries to 10 customers.

§11Who to connect with

Not verified yet

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.

Get a DPR / loan file made

Sources

  1. PMEGP sample project report — Milk Powder (prepared by Udyami/Samadhan)

Data review: 6 October 2026. Spotted a mistake? Report it. For information only — not legal or financial advice.