Dairy Entrepreneurship Guide — DEDS & AHIDF Scheme

The Dairy Entrepreneurship Development Scheme (DEDS) was implemented by NABARD for smaller dairy projects. It has been largely subsumed by the Animal Husbandry Infrastructure Development Fund (AHIDF) which provides more comprehensive support with 3% interest subvention. AHIDF covers a wider range of projects including dairy processing, meat processing, and animal feed. Some NABARD district-level dairy schemes may still operate in specific states alongside AHIDF.

There is no minimum project size under AHIDF. Projects can range from a small Bulk Milk Cooler (₹5–10 lakh) to a large integrated dairy plant (₹100+ crore). The entrepreneur needs to provide 10% margin money — so for a ₹10 lakh project, only ₹1 lakh own contribution is needed. The remaining 90% comes from the bank loan with 3% interest subvention and CGTMSE guarantee (for loans up to ₹2 crore).

Yes. There is no mandatory requirement for prior dairy experience. However, the bank will assess the promoter's capability and project viability. It is advisable to undergo training (NDDB, dairy cooperatives, or private institutes offer short courses) before applying. A strong DPR with technical tie-ups (equipment supplier support, dairy consultant engagement) can compensate for lack of personal experience.

Yes. Any establishment involved in manufacturing, processing, packaging, or selling dairy products must have an FSSAI licence. For turnover up to ₹12 lakh, Basic Registration suffices. For ₹12 lakh–₹20 crore turnover, a State FSSAI Licence is needed. Above ₹20 crore requires a Central FSSAI Licence. The licence ensures food safety compliance including pasteurisation standards, hygiene requirements, and product labelling norms. TaxClue handles FSSAI licensing for dairy businesses.

Under AHIDF, the 3% interest subvention is available for 8 years from the first disbursement. This is longer than the AIF's 7-year subvention, reflecting the longer gestation and payback period of dairy processing projects. After 8 years, the borrower pays the full bank interest rate on the remaining balance. The subvention is credited quarterly to the loan account by DAHD.

Yes. Dairy cooperatives, FPOs, SHGs, and Section 8 companies are all eligible for AHIDF. In fact, cooperative dairies and FPOs are encouraged to apply as they can aggregate milk from multiple farmers, ensuring better procurement and processing volumes. The 10% margin money requirement applies equally, but cooperatives can leverage their existing infrastructure and member equity. NABARD and NCDC provide additional support and refinance for cooperative dairy projects.

GST rates for dairy products vary: fresh milk, curd, and buttermilk are exempt (0%). Flavoured milk, cheese, butter, ghee, condensed milk, and UHT milk are taxed at 12%. Ice cream is at 18%. Milk powder, skimmed milk powder, and whey are at 5%. Dairy processing machinery is at 18% GST (with input tax credit). Understanding the GST structure is critical for pricing and profitability of dairy enterprises. TaxClue handles GST registration, return filing, and ITC management for dairy businesses.

Yes. AHIDF can be combined with other schemes for different project components. For example, AHIDF for the dairy processing plant and AIF for cold storage/warehouse. PM FME subsidy can be used for micro dairy processing alongside AHIDF loan. State dairy development schemes often provide additional capital subsidies. However, the same component cannot receive benefits from multiple schemes simultaneously. A CA/CS expert can help identify the optimal scheme combination for your project.