Challenges Facing the Indian Poultry Industry

India’s poultry industry is among the most dynamic in the world. The country ranks as the third-largest producer of eggs and the fourth-largest producer of broiler chicken globally, and the market – valued at over INR 2,304 billion in 2024 – is projected to grow at a CAGR of 12.60% through 2033. Yet beneath these impressive numbers lies a complex set of structural and operational challenges that continue to limit the industry’s true potential. From volatile feed prices and crumbling cold chain infrastructure to disease threats and marketing inefficiencies, these barriers demand serious attention.

The feed cost crisis: maize and soybean at the center 🔗

Feed is the single largest operating expense for poultry producers in India, accounting for nearly 70-80% of total production costs. The two primary ingredients – maize and soybean meal – are subject to sharp price swings driven by domestic supply shortages, climate variability, and competing demand from other industries.

Maize constitutes 50-55% of broiler feed, and India’s domestic production of around 36 million metric tonnes (MMT) already falls short of the combined demand from the poultry sector and the ethanol industry, with requirements expected to reach 41 MMT. Soybean productivity has largely stagnated in recent years, worsening the supply crunch. In 2021, the government had to permit the import of 1.2 million tonnes of genetically modified soybean meal as an emergency measure to help producers manage escalating feed prices.

The problem is compounded by currency depreciation. The weakening of the Indian rupee has raised the cost of importing feed ingredients like maize and soybean meal, squeezing profit margins further. Industry experts stress that import liberalization on corn and zero-duty imports of key feed ingredients are among the most urgent policy demands from the sector.

Inadequate infrastructure: the cold chain problem 🔗

One of the most persistent structural weaknesses in India’s poultry sector is the inadequacy of cold chain infrastructure. A major problem affecting the Indian poultry industry is the lack of basic infrastructure – storage and transportation including cold chain. Without reliable refrigerated storage and transport, poultry products are highly vulnerable to spoilage, microbial contamination, and post-harvest losses.

In India, over 90% of chicken is sold through wet markets, where live birds are slaughtered and sold fresh. While this reflects consumer preference, retailers slaughter birds in a very unhygienic manner at local shops, raising serious food safety concerns. The lack of mechanized, hygienic slaughter and chilling facilities means that a vast proportion of poultry meat never enters a regulated cold chain at all.

For processed and chilled products, poultry meat exports are limited by inadequate slaughtering and processing facilities, inadequate cold chains, and periodic avian influenza outbreaks. Lack of cold storage, poor logistics, and limited processing facilities remain barriers to efficiency even in the domestic market, preventing the industry from scaling up value-added product categories that command better margins.

Why cold chain gaps lead to contamination 🔗

When poultry products are exposed to temperature fluctuations during transport and storage, microbial growth accelerates rapidly. The National Institute of Nutrition has identified poultry as the source of approximately 43% of all Salmonella infections in humans in India, with an estimated 175,000 documented illnesses annually – a figure likely to be significantly understated due to underreporting. Bridging cold chain gaps is therefore not merely a logistics issue; it is a public health imperative.

Unorganized production and inefficient marketing 🔗

Despite the growth of integrated commercial farming, a significant portion of India’s poultry production still operates outside organized systems. About 30% of poultry production remains in the unorganised sector, where small and marginal farmers operate without access to modern inputs, veterinary services, or reliable marketing channels.

Poultry products pass through various intermediaries before reaching the final consumer. The presence of so many intermediaries harms both the producer and the consumer – the producer does not get a remunerative price for the product, while the consumer pays a high price because of the cascading of margins. This fragmented marketing structure is one of the key reasons why price volatility is so pronounced in India’s poultry trade.

The industry is often subjected to challenges such as raw material shortages, price instability, infrastructural bottlenecks, and insufficient government impetus. Contract farming, which has helped link small growers to larger integrators, is also not without friction – disputes over pricing, delays in payments, and the risk of disease transmission create a fragile ecosystem within the contract model itself.

Disease threats: avian influenza and biosecurity failures 🔗

Avian influenza (AI) remains one of the most devastating threats to India’s poultry industry. India has reported frequent outbreaks of avian influenza A(H5N1) in poultry farms every year since it was first reported in Maharashtra in February 2006, affecting states from Kerala and Karnataka to West Bengal and Assam. The 2020-21 AI outbreak alone caused losses exceeding ₹1,500 crore within just three months.

The economic ripple effect goes well beyond culled flocks. An outbreak leaves a chain reaction of losses – from small backyard farmers to large integrated poultry companies, and even affects allied sectors like maize and soybean farmers who supply poultry feed. Consumer confidence also takes a hit each time an outbreak is reported, temporarily collapsing market demand regardless of whether the product is safe.

Biosecurity gaps at the farm level 🔗

Despite the well-documented risks, nearly one-third of India’s poultry is reared in backyards, often without proper housing or fencing, making flocks vulnerable to infection from wild birds. Basic biosecurity protocols – such as foot baths, vehicle disinfection, and controlled farm entry – are frequently ignored. Many small-scale farmers lack the awareness to identify symptoms early or know the correct reporting channels, leading to detection and response delays.

Beyond avian influenza, diseases like Newcastle disease, Infectious Bursal Disease, and coccidiosis are ongoing challenges. Annual losses from poultry diseases are estimated at ₹25,000 crore (approximately $3 billion) due to mortality, reduced productivity, treatment costs, and trade restrictions. Small-scale farmers, who constitute about 80% of India’s poultry producers, bear the brunt of these losses and typically lack the resources to absorb them.

Quality control inconsistencies and food safety standards 🔗

Quality control in India’s poultry supply chain remains highly uneven. The Food Safety and Standards Authority of India (FSSAI) sets regulations for the safety and quality of poultry products, but enforcement is inconsistent – particularly at the wet market and small processor level. State-level policies and regulations differ significantly, making it difficult for poultry farmers to maintain consistency in operations.

Consumer expectations are also shifting rapidly. The quality and standards of poultry meat in India remain a significant challenge, as consumers increasingly look for quality and hygienic meat and are willing to pay more for it – a trend reinforced by the growing presence of international fast-food chains that maintain stricter standards. Bridging the gap between what consumers expect and what the fragmented supply chain currently delivers is an ongoing challenge for the industry.

Import competition and export limitations 🔗

India imposes a 30% basic tariff on most poultry product imports, with a 100% tariff on cuts and offal of domestic chicken species. While these tariffs provide some insulation for local producers, the threat of cheaper, high-quality imports – particularly from countries with lower production costs and more advanced processing facilities – remains a concern if trade barriers are eased through bilateral or multilateral agreements.

On the export side, India’s ambitions are held back by the same structural weaknesses that afflict the domestic market. Exports of poultry meat are limited by high production costs, inadequate meat processing facilities, and intermittent outbreaks of avian influenza. There is an urgent need for setting up modern poultry processing plants to cater to both domestic and export markets, backed by adequate cold chain infrastructure that meets international food safety standards.

Government response and the road ahead 🔗

The government has not been idle. Schemes like the National Livestock Mission (NLM) provide financial assistance and subsidies for poultry development, while the Animal Husbandry Infrastructure Development Fund (AHIDF) supports investment in processing, cold chain, and feed plant infrastructure. The Union Budget 2024 acknowledged the sector’s challenges, with measures aimed at improving agricultural infrastructure, customs relaxation, and crop production to positively impact the availability and affordability of essential raw materials for poultry feed.

Industry analysts at CareEdge Ratings anticipate 8-10% revenue growth in FY2025, with recovery in operating profit margins driven by urbanization, rising incomes, and growing consumer preference for protein-rich foods. The fundamentals of demand growth remain strong. But sustaining that growth will require coordinated action on feed supply, cold chain investment, biosecurity, and quality standardization – issues that cannot be resolved by market forces alone.

What do you think? Given that feed costs account for up to 80% of poultry production expenses in India, should the government prioritize domestic maize production or focus on liberalizing imports to bring costs down? And with wet markets still dominating over 90% of poultry sales, how feasible is it to shift India’s poultry retail landscape toward a regulated, cold chain-based model in the near term?

References

1. https://benisonmedia.com/rising-poultry-feed-costs-challenges-and-possible-solutions/
2. https://www.imarcgroup.com/indian-poultry-market
3. https://www.ijcrt.org/papers/IJCRT2505077.pdf
4. https://www.poultrytrends.in/emerging-challenges-opportunities-for-sustaining-future-expansion-of-indian-poultry-sector/
5. https://www.reportlinker.com/dlp/4e4dc6931d35c5c01db572cc4f3383f1
6. https://www.poultrytrends.in/decoding-union-budget-2024-for-indian-poultry-sector/
7. https://www.fao.org/4/x6115e/x6115e0c.htm
8. https://avinews.com/en/the-broiler-business-in-india-a-tale-of-integration-trade-and-tradition/
9. https://www.thepoultrysite.com/articles/the-expanding-landscape-of-indias-poultry-sector
10. https://indianherbs.org/blogs/choline-supplement/poultry-industry-in-india-trends-challenges-and-opportunities-in-2025
11. https://www.irjmets.com/uploadedfiles/paper//issue_4_april_2025/74074/final/fin_irjmets1745950162.pdf
12. https://www.thepoultrysite.com/news/2011/08/international-egg-and-poultry-review-india
13. https://www.srpublication.com/avian-influenza-outbreaks-biosecurity-challenges-in-poultry-industry/
14. https://www.srpublication.com/why-poultry-welfare-in-india-and-their-scope/
15. https://apps.fas.usda.gov/newgainapi/api/report/downloadreportbyfilename?filename=Poultry+and+Poultry+Products+Annual+2016_New+Delhi_India_12-1-2016.pdf
16. https://images.assettype.com/bloombergquint/2024-10-29/ie50asu4/CareEdge_Report_Poultry_Industry.pdf