Parag Milk Foods announced plans on September 22, 2026, to invest approximately INR 100 crore to increase its production capacity for paneer, which is also known as cottage cheese.
The company intends to scale up manufacturing at its Manchar plant in Maharashtra and its Palamaner operation in Andhra Pradesh. The expansion will add a total of 60 MT per day of capacity across the two locations. Parag Milk Foods stated that its current paneer manufacturing capacity stands at 20 MT per day. The enlarged facilities are scheduled to be operational by June 2027, producing both regular and high-protein varieties of paneer.
Rahul Kumar Srivastava, chief operating officer of Parag Milk Foods, expressed the company’s delight regarding the intention to increase capacity by 60 MT per day. According to the company, this investment will bring the overall paneer capacity from 20 MT per day to 80 MT per day.
The expansion aims to keep pace with growing demand for consistent quality and broaden the firm presence across the country in both the regular and high-protein categories. Organised players currently make up just about five to six percent of the category. Paneer serves as one of the company signature categories, having grown at a rate of 28% per annum over the past two years, with value-added items accounting for more than 90% of the company’s turnover.
Regulatory Scrutiny and Market Changes
The decision by Parag Milk Foods to expand arrives while food inspectors in different states closely monitor food business operators. Numerous online meal delivery platforms, including Zomato and Swiggy, have requested that their restaurant partners cease using imitation paneer as a result of these regulatory moves.
Analogue dairy dishes created with imitation paneer are no longer permitted on Zomato, which maintains a zero-tolerance stance on selling foods that use substitute dairy products. The platform has removed dishes that restaurant partners have declared as containing analogue dairy and asked restaurants to switch to natural dairy products or remove affected dishes from their menus.
Analogue paneer and other dairy alternatives face increasing scrutiny across India. The manufacturing, storage, distribution, and sale of fake paneer have been banned in several Indian states. These states include Karnataka, Maharashtra, Gujarat, Chhattisgarh, Uttarakhand, Madhya Pradesh, Punjab, and Himachal Pradesh.
Zomato states that dishes reported by restaurant partners for containing analogue dairy are immediately removed from the platform. The stated goals of this policy are the promotion of more openness in meal listings and the safeguarding of consumer interests, with restaurant partners asked to comply immediately by implementing rigorous measures to ensure natural dairy products are the norm in restaurants.
