Will Kerala Milk Prices Rise Despite GST Cuts?

Kerala’s MILMA cooperatives may raise milk prices by up to ₹ 6 per litre, despite recent GST rate cuts. According to Mathrubhumi reporting, the MILMA Chairman has defended the potential increase, pointing to sharply rising input costs such as cattle feed, packaging, and transport.

While the GST rationalisation is expected to ease some tax burden on milk products, MILMA argues that savings will be offset by other cost pressures. The Chairman emphasised that the credit from lower GST rates does not fully cover the rising operational expenses that dairy cooperatives are facing.

In addition, he noted that feed costs have become particularly volatile, driven by global commodity trends and supply-side disruptions. Packaging costs are also contributing to inflation, especially for milk in retail-ready packs. Transport logistics in Kerala, known for its hilly terrain, further add to the financial stress on cooperatives.

From a policy perspective, MILMA’s statement flags a critical disconnect: while lower GST should theoretically benefit both producers and consumers, that benefit may not translate into lower retail prices if other cost levers rise sharply. The potential hike could have repercussions for consumers, particularly in a state where milk is a staple in many households.

For dairy sector watchers across India, MILMA’s situation serves as a reminder that tax reforms—while important—are not a panacea. Input inflation and logistical challenges continue to pose existential risks for cooperatives. The Kerala case could well become a cautionary tale for other regional dairy boards: tax relief will only bring sustainable benefit if structural cost pressures are also addressed.

Source : DAirynews7x7 Nov 25th 2025 Read full story here