Subodh Kulkarni, 41, runs a small home-kitchen tiffin service in Mumbai and cooks paneer for about twenty customers a week.

For two years he bought loose slabs from a nearby dairy at around Rs 230 a kilo. It was cheap, readily available and did the job.

This was until the raids by the Maharashtra food safety authority.

“The supplier said the price was going up, and he couldn’t tell me why,” he said.

After news of seizures in the city, he bought two 200g Amul packs at Rs 95 each. “That’s nearly double,” he said. This forced him to raise his tiffin price by Rs 10.

He now orders Amul paneer mostly by the kilo from Bigbasket and says the cost still stings, but he no longer worries about a complaint.

Even 10 years ago, paneer wasn’t a very popular meal choice, recalls Kulkarni. At most, he would get orders two times a month.

Now, he includes paneer at least three times a week in his meals.

Paneer has long been loved in North Indian homes, but today it has become an everyday food across the country. More people want protein, and it’s an easy choice for vegetarians.

Meanwhile, Vageshree, a 30-year-old househelp in Mumbai, eats paneer almost every other day. A vegetarian, she considers it an affordable source of protein and usually buys 100-200 grams from a neighbourhood sweet shop on her way home from work.

Even after reports of a paneer ban and concerns over adulterated products, she has no plans to change where she shops.

“I have been buying paneer from the same shop for years. The owner knows me, and I trust him. I cannot afford expensive branded paneer from supermarkets anyway. If there was something wrong, I believe he would tell us,” she said.

India's proposed crackdown on analogue paneer is creating an opening for organised dairy companies, which are expanding capacity and betting that consumers will switch to branded products.

With unorganised players controlling 90-94% of supply, companies see a large market to tap, but the price gap could slow the shift.

Fight Against Fake Paneer

The draft by the Food Safety and Standards Authority of India (FSSAI), issued on 23 September 2026, is not yet in force. Stakeholders were given 60 days to submit objections or suggestions.

It amends the 2011 sales regulations to restrict making and selling analogue products as paneer, adding a clause for paneer made from non-milk ingredients. Products already licensed in the dairy-analogue category must stop using the term “paneer” in their name, labelling or marketing. The Health Ministry describes it as barring the word for non-milk products.

In August, Madhya Pradesh became the fourth state to ban analogue paneer, after Maharashtra, Gujarat and Chhattisgarh.

But the imitation costs less than the real thing. Most paneer is still sold loose, and local reports suggest the trade continues even where it is banned.

Organised companies hold only 6-7% of the paneer market. Most is still sold loose by small makers. Big dairy brands have paneer in their portfolios, but none is built exclusively around the product.

The size of the analogue market is even harder to establish. India has no credible national estimate of its size, its share of total paneer consumption, or its production and sales.

Made from non-milk ingredients such as vegetable oils and milk solids, analogue paneer is sold largely through informal channels and is not tracked as a separate category.

Even market-research valuations of the overall paneer industry, such as market research group IMARC’s Rs 648.05 billion in 2024, do not distinguish between genuine paneer and its imitations.

That leaves regulators trying to tackle a market whose size they cannot reliably measure, while India’s big dairies are betting that consumers will trade up.

The Gujarat Cooperative Milk Marketing Federation Ltd, which manages India’s biggest dairy player Amul, reported Rs 73,450 crore turnover in FY26, and the wider Amul brand crossed Rs 1 lakh crore. Amul is also the biggest branded paneer player in the market.

Its presence in the paneer segment has visibly increased, offering a variety of sizes and types such as high-protein paneer.

Tamil Nadu-based Milky Mist tripled installed paneer capacity in FY 2026, and Parag Milk Foods is investing Rs 100 crore to quadruple capacity to 80 MT per day by June 2027.

The opportunity is significant. Unorganised producers still being the biggest suppliers leaves room for organised players if a crackdown on analogue products pushes consumers towards branded alternatives.

But the price difference remains an obstacle.

Big Dairy's Bet

Branded players are betting on the shift.

Parag plans to invest about Rs 100 crore to lift paneer capacity to 80 tonnes a day from 20, with the new capacity due by June 2027 at its Manchar and Palamaner plants, said Akshali Shah, executive director, in response to The Core's queries. The plants will make both regular and high-protein paneer.

Shah said Parag's paneer business has grown about 28% a year over the past two years, and that its branded paneer has a shelf life of up to 75 days without preservatives.

"I see paneer as a long-term growth category rather than simply a volume or margin play," she said.

She named the barriers as a fragmented supply chain, paneer's perishability, limited cold-chain infrastructure and "the price differential between compliant, quality-led manufacturing and informal production."

The opportunity, she added, is "not simply about taking share from the unorganised market”.

Rajiv Mitra, strategic advisor at Maharashtra-based Sonai Dairy, told The Core that all the major dairies are adding capacity. His case for brands is accountability, not logos. "It is safer because brand creates accountability," he said, "and that is a result of traceability and testing and processes."

But he doubts the switch will be quick. "The organised sector can expand, but it cannot overnight displace or replace millions of small producers," he said. Many shoppers buy loose paneer because they think it is fresher, he added, and restaurants and institutional kitchens buy huge volumes and are very sensitive to price.

Cheap, And Hard To Spot

It is usually the lower price that attracts consumers to buy analogue of fake paneer. It isn’t also illegal.

Mitra called the imitation "fake paneer" and described it as white cubes made of palm oil. Some product listings have described analogue paneer as made from skimmed milk and vegetable oil.

"The problem is that the consumer doesn't know what she is actually buying," Mitra said. "It is not about banning a product; it is about deceiving the consumer."

Mitra, who The health case is less clear-cut than the price case.

"Analogue paneer won't give you instant food poisoning; the main concern is indeed nutritional fraud and misleading consumers," said

Renu Puri, co-founder and head dietitian at Niwi.ai, in response to The Core's queries, said the longer-term worry is for diabetic and cardiac patients and older people, pointing to palm oil's fats and the starch in some products.

Separately, she cautioned that claims of serious harm from adulterated dairy should rest on specific evidence. According to her, the fix is simple.

"Clear and prominent dairy or non-dairy labelling on the front of the pack would make this distinction much easier."

Analogue paneer is roughly 40-50% cheaper, but India has no systematic price survey by channel, so the figures are scattered reports.

Zomato’s Hyperpure listing, a supply channel to restaurants, showed it at about Rs 210 per kg against about Rs 450 for genuine paneer.

The gap comes mainly from raw material: a kilogram of genuine paneer needs around five litres of milk, while analogue uses vegetable oils such as palm oil and starches instead of milk fat and solids.

Beyond Paneer

Demand gives everyone room.

IMARC Group estimates India's paneer market at Rs 731.4 billion in 2025, growing about 12% a year through 2034. Forecasts like this vary by method, but retail data point to the same direction.

Instamart reported that eggs and paneer are the most popular protein pairing on its platform, while protein yoghurt grew about 280% and tofu nearly 87%.

Supplement makers say they are not chasing paneer's customers.

"We see paneer as a complementary category rather than a competitor," said Himmath Jain, co-founder of AS-IT-IS Nutrition, told The Core. AS-IT-IS is a Bengaluru-based supplements company. Jain said worries about paneer are not the main driver of interest in supplements, which shoppers use "alongside traditional protein sources rather than as replacements."

What Comes Next

Three things will show how this plays out. The first is whether the FSSAI finalises its draft rule, and how long it gives analogue makers to relabel. The second is the Delhi High Court's next step on whether restaurants must disclose what they serve. The third is whether Parag and other dairies fill their new capacity, which would signal that buyers are moving to branded paneer.

Mitra expects the market to split instead of merging. "Both will exist," he said, with a lasting niche for oil-based cubes sold openly. Eventually, he said, buyers will know "that I am not buying paneer, but I am buying something which is similar tasting, which is made of something else at a lower cost."

The real test is whether they will pay more when they do.