Indias Maritime Makeover Why Is Protein Powder Getting Expensive The Daily Brief 487

TITLE: India’s maritime makeover | Why is protein powder getting expensive? | The Daily Brief #487 CHANNEL: Markets by Zerodha DATE: 2026-06-16 ---TRANSCRIPT--- In today’s episode, we’ll break down two important stories. First, we’ll talk about India dreaming of owning the sea, and then we’ll talk about why protein powder is getting expensive. Welcome back to the daily brief by Zerodha, where we cut through the noise to help you understand what’s actually happening in the most important stories from business and markets. I am your host, Axara, and today is Tuesday, 16th June.

Coming to the first story. Picture a container leaving a garment factory in Thirpur packed with t-shirts bound for Rotterdam. It moves by road and rail to a port on the western coast, waits its turn, gets lifted onto a ship and from that point on when it touches the water’s edge, almost everything about the journey belongs to another country. So the ship carrying the shipment is almost certainly foreign flagged. Indian ships carry only about 5% of the country’s export and import cargo and that ship probably doesn’t head for Europe. Instead, the container is likely trans shipped from a nearby port in another country like Sri Lanka or Singapore as 3/4 of India’s long-distance shipments are. A foreign flagged ship financed and insured from abroad then carries it to its destination. So the bulk of India’s trade crosses the sea but the entire infrastructure carrying it the ships the hubs the insurers comes from other countries.

Since the covid pandemic we’ve made a strong push to upgrade our port infrastructure. The Mundra port the Pipavav port and the Jawaharlal Nehru port in Navi Mumbai rank among the world’s top 30 most efficient ports. In fact the Jawaharlal Nehru port was among the most improved ports on earth in the last 5 years. We clearly have the ability to build worldclass maritime infrastructure. These improvements have also reduced our logistics costs substantially from well into the double digits to just about 8% of our GDP which is in the same ballpark as countries like the United States and Germany. But Indian shipping suffers from a wider range of legacy problems and these fall into two broad families. one that we rely too heavily on foreign infrastructure and two that range of frictions make India’s experience with shipping uneven.

Now the last year has seen the Indian government wrestle extensively with these issues. In the space of a single year it brought in a rupees 69,725 cr package floated three new laws replacing statues dating as far back as 1908. launched a development fund and an insurance pool that both run into thousands of crores and inaugurated a new deep water port. Taken together, these measures present a serious overhaul of Indian shipping on the horizon.

Now, depending on who you are, your logistics costs can vary substantially. To a large company, shipping costs can add up to approximately 8% of their turnover. Smaller businesses, meanwhile, spend more than twice as much at roughly 17%. The very exporters least able to carry those costs pay the most. Now, some of this is structural. Scale unlocks many efficiencies and gives you bargaining power that a smaller firm simply doesn’t have. But these differences are hard to iron out. But some frictions are peculiar to India. Indian ports are wrapped in layers of processes and procedure which small businesses struggle to handle. And those struggles create a crop of brokers and intermediaries one must deal with to get a shipment through. Each middleman adds to a firm’s costs making shipping far more expensive than what tariff cards alone imply. But this isn’t uniformly the case. Some Indian ports compare favorably to the world’s best. At the same time, many of India’s most important ports like those at Vishakha, Kochin or Chennai don’t even feature among the world’s 100 most efficient ports. The experience of sending a shipment out depends entirely on where you do it.

Now, at any of those ports, you’re probably met by a ship that carries a foreign flag. After all, it’s incredibly expensive to run an India domicile ship. Running an Indian flag vessel for a foreign voyage costs about 20% more than running a foreign one. And this is almost entirely a matter of policy. Indian ships borrow at higher rates over shorter tenures, pay tax on their crews wages, pay import duty on the vessel itself, lose tax credits they cannot recover, and pay GST on domestic legs that a foreign ship sails free of. Moreover, a foreign charter must pay a withholding tax of around 7.5% on the freight they earn if they’re renting an Indian ship. This is a business where a few percentage points of cost can make or break a contract. A 20% gap essentially kills the case for Indian shipping, ensuring that Indian shipping is extremely unattractive to Indian firms, let alone foreign ones. In fact, even when Indians own and operate ships, they don’t fly them under an Indian flag. It makes better sense to register a ship in Panama or Liberia. As a result, we pay foreign shipping companies roughly rupees 6 lakh cr a year, a figure close to our defense budget. This is a serious loss of foreign exchange. An Indian shipping company would spend on foreign exchange in fuel costs as well to be fair. But this exaggerates the outflow.

Now there are some issues we have less control over. Take trans shipment. Most long-distance cargo travels on massive ships that can’t dock on regular ports. These ships require deep drafts and ports with enough terminal and berthing capacity to handle their cargos. And the more cargo a port moves, the cheaper each becomes. That is the more traffic a shipping hub sees, the more attractive it becomes. Until recently, India didn’t have a port that could perform this job. Most Indian cargo would have to go through ports like Colombo and Singapore. And the fees was an annual outflow of more than $200 million in foreign exchange.

Now, we’re also dependent on other countries for insurance. Large ships inevitably need insurance. In fact, no port would accept a ship that doesn’t have insurance cover while no canal would offer them passage. Traditionally those liabilities would be carried by the international group of P&I clubs, a set of mostly European insurers. Now this system evolved as a question of convenience. But recently it became a liability. When Western countries placed sanctions on Russian oil, the channel through which they enforced those sanctions was insurance. European insurers were instructed to cut off tankers carrying Russian crude, at least if it was being sold above the G7’s price cap. Effectively, this made India hostage to the foreign policy of western countries. And in all, the decades long neglect of India’s maritime sector had left us riddled with a series of compromises and dependencies. These made our imports expensive, our exports uncompetitive, while a substantial share of the foreign exchange we earned drained away to foreign firms. But worse still, we lost options of how to manage our own affairs.

So over the past year, the Indian government has tried to break through each of these dependencies. The easiest of these issues is routine friction, which lands the hardest on India’s small businesses. The key challenge here is excess paperwork and paperwork can be cut. Last October, the government announced its one nation, one port effort, and this brought down the documents a container needs by roughly a third from 143 to 96. It’s also tried bringing more transparency and accountability to India’s ports with indices like the Sagar Ankalan, a benchmarking system that scores ports against one another and this grants more visibility over how India’s ports perform shining a light on ports that perform poorly.

So previously we tried cutting the costs of Indian shipping through subsidies. Our shipping firms were unable to win government tenders, let alone commercial contracts. And so the government set aside rupees 1,624 cr to help Indian ships outbid foreign rivals for these tenders. But this only addressed the symptoms and did little to fix the 20% structural drag our policies created. But this time around, we have dug deeper. The government has reclassified ships as infrastructure, which unlocks cheaper and longer credit for them. And it’s also introduced tax breaks for ships leased through the gift city financial hub. This has been paired with a variety of other SOPs aimed at reflagging 3,000 foreign ships to India by 2030. But we haven’t eliminated all bottlenecks. There are still serious issues around the tax treatment of Indian ships. But there are signs that the case for an Indian flag is growing stronger. The global shipping giant Maersk, for instance, recently brought two ships previously registered in Singapore under the Indian flag.

So the government is also trying to get around this problem through easier finance. Ships are costly, long-lived assets which need patient capital. Meanwhile, our mortgage rules make it difficult for a lender to repossess a ship cleanly in the case of a default making banks hesitant to fund them. So this is why the government has stepped in with rupees 25,000 cr maritime development fund to fill the gap. And more recently, the government also made a serious push for domestic insurance to bypass the policy prescriptions of the west. and it just announced the Bharat Maritime Insurance pool which comes with a rupees 12,980 cr sovereign guarantee that insurance brings independence so the next time a foreign insurer withdraws cover an Indian ship can find it at home and keep its business afloat.

But it isn’t just funding we’re also creating infrastructure so to solve the trans shipment problem last May we opened the Vizhinjam port India’s first deep water trans shipment port and this rupees 8,800 cr investment can handle the world’s largest ships and is aimed at plucking business away from Colombo. But that won’t be easy. Colombo has economies of scale that we do not yet enjoy. But the port has already crossed rupees 450 cr in revenue which shows that demand exists.

Now all of this is backed by a serious legal push. Last year the parliament passed three new shipping laws and these replaced an ancient set of statues including the nearly 120year-old Indian ports act of 1908. And the new laws greatly liberalized how Indian shipping would work. The Merchant Shipping Act, for instance, liberalized who could own an Indian flagship. Where previously an Indian ship would have to be owned wholly by Indian nationals, the act opened it to NRIs, overseas citizens, foreign lessers leasing to an Indian and others. And similarly, the new Indian ports act modernized how Indian ports are run. Now, the laws aren’t completely in force. The rules under them are still being drafted. But this is a massive update to India’s maritime sector.

So to recap, in the space of a little over a year, we have new laws, new ports, new financing vehicles, fewer compliances, better data, and more. Collectively, this amounts to a serious push to make India a maritime powerhouse. These aren’t palliatives that treat the symptoms of a bad problem. They’re a fundamental rethink of how shipping works in the country and they attempt to directly address the root causes of our poor performance. But this isn’t to suggest that the sector will turn around overnight. Shipping is a competitive business where scale and financial muscle matter a lot. Ultimately, India will have to win its cargos one container at a time. But where that was once impossible, it’s now merely difficult and that alone may make all the difference.

Coming to the second story. So today we want to try to answer a simple question. Why is whey getting so expensive? Our teammate Kashish Kapoor likes to boil down such questions to a reductionist but effectively true answer. Demand and supply. It feels like a crime to agree with him but at the end of the day that’s just it. It’s expensive because there’s not enough of it. So to understand how bad things have become, as per the Guardian, the supplement grade version of whey protein concentrate has gone from around 4,300 lb or approximately rupees 4.5 lakh at 2023 rates per ton in mid 2023 to nearly 24,000 or approximately rupees 30 lakh at current rates per ton today. And the more refined version, whey protein isolate, has risen five-fold to approximately 28,000 or approximately rupees 30 lakh at current rates per ton since 2023. But obviously, we want to go a little deeper into why this is. And that answer starts with understanding how whey is even made.

So think about how paneer is made at home. You heat milk, add some lemon juice and the milk splits into solid and liquid. The solid bits clump together and become paneer after you press them. And the thin watery liquid that drains off is whey. Every time someone makes paneer, curd or chana in India, they produce whey as a byproduct. But most of it gets thrown away. So in the west, the dominant dairy tradition was never paneer, but aged cheese like cheddar, mozzarella, and gouda. Now aged cheese is also made differently. Instead of lemon, you add an enzyme called rennet to the milk. Rennet also separates the milk into curds and liquid. But this liquid called sweet whey has a different chemistry from the liquid that comes off paneer or curd making. The proteins in sweet whey are largely intact and undamaged which means you can process them further. In the latter half of the 20th century, food scientists figured out what to do with this sweet whey. You filter it through specialized membranes to remove water, fat, and lactose. And then you dry what remains into a powder. The resulting product contains all nine essential amino acids, absorbs into the body faster than almost any other protein source, and causes far fewer digestive issues than plant proteins. That is whey protein concentrate or WPC, the powder in every protein tub at every supplement shop. Whey protein isolate or WPI is a stronger, more protein heavy version of it. And as an analyst told the Financial Times earlier this year, it used to be a product with no value. Now cheese could become the byproduct of whey production.

Now you’re probably wondering why can’t India, the world’s largest milk producer, just make this powder itself. So the answer comes down to the fact that India never really developed a cheese eating culture. Traditional Indian cuisine has no use for aged hard cheese. Our dairy heritage went entirely in the direction of fresh dairy which is consumed quickly. Paneer, dahi, chenna and ghee. Moreover, hard cheese requires weeks or months of aging, which historically wasn’t practical in India’s hot climate and without a cold chain. Many Indian households also traditionally avoided rennet because it comes from a calf’s stomach lining. And until pizza chains and fast food culture arrived in the 2000s, there was simply no consumer demand for it. Even today, hard cheese is less than 3% of India’s milk pool. And without a cheese industry, there is no sweet whey. And without sweet whey, there’s no whey protein powder industry.

So the demand for whey protein didn’t appear suddenly. It built up from several completely independent directions over roughly 15 years. And they all converged at similar times. So the first was a cultural shift. In the 2010s, keto and paleo diets went properly mainstream, spreading from gyms and nutrition circles to social media, where fitness influencers made protein the hero macronutrient and carbohydrates the villain. A generation of consumers started reading nutrition labels and choosing the higher protein option. The consumer demand came first and then beyond protein supplement makers, the world’s largest food companies followed. According to Nielsen IQ, the average American supermarket carries more than 38,000 products with a protein claim on the label today. Protein is in cereals, in chips, and in Starbucks coffee drinks. For instance, General Mills launched Cheerios Protein, which was on track for $100 million in first year sales. And then Coca-Cola is putting $650 million or approximately rupees 5,500 cr to expand capacity for Fairlife, its high protein milk brand. So when a cereal that sells hundreds of millions of boxes adds whey protein as an ingredient, the demand for whey as a raw material is much larger than what a single supplement brand can create.

The second driver is aging. Adults start losing muscle mass from around the age of 50 at 1 to 2% per year. This is a condition called sarcopenia and the clinical recommendation for its treatment is higher protein intake. People born between 1946 to 1964, called baby boomers, are now between 60 to 80 years old, and that’s the exact age range where this becomes serious. And a doctor’s advice most directly translates into someone buying a protein supplement. The number of people in this cohort is something the market has never absorbed before.

And the third and most recent driver is GLP1 weight loss drugs like Semaglutide, which we know through brands like Ozempic and Wegovy. These drugs suppress appetite dramatically. But when you eat less and lose weight rapidly, you lose muscle alongside fat. And research from Harvard Medical School found that approximately 40% of the weight lost on semaglutide is lean mass rather than fat. So to prevent this, doctors now prescribe high protein intake alongside these drugs. And that has created an entirely new category of protein consumers, patients on medical prescription as opposed to gymgoers. As per JP Morgan, 10 million Americans were on GLP-1 treatment by the end of 2025, double that of 2023. Erica Tamayo, the founder of protein brand Hermosa, told the Guardian in June 2026. Once GLP1 started soaring, people realized how important protein is in their diet. Then loads of products in mainstream supermarkets started adding whey protein to everything. Popcorn, crisps, even protein donuts.

Now, all three of these demand trends were building through the last few years, but there’s a specific reason as to why prices hit their peaks only in 2025 and 2026. So, in 2022, whey prices were already elevated and producers across Europe and North America ramped up manufacturing to capture the margins. By 2023, demand softened and they found themselves with warehouses full of inventory that was rapidly losing value. Their response was to stop building inventory entirely and switch to made to order production. You only produce once someone has already paid for it. And producers actively shut down WPC and WPI production runs and stripped all buffer product from the system. But then in 2024, a demand surge arrived, but supply chains that were ramped down earlier had little capacity to absorb it. After all, building a new whey processing plant takes a minimum of 2 years. Glanbia, the world’s largest WPI producer, announced new capacity in New Mexico in November 2025, but will not be online until 2027. They expect whey costs to show a double-digit increase in 2026. And they also noted that whey protein showed limited consumer elasticity from 2025 price increases to date, meaning they raised prices and people kept buying. Meanwhile, Arla Foods, one of Europe’s largest dairy cooperatives, reported its ingredients division grew revenue 43% in 2025 from the demand surge, even as it struggled to keep up.

Now, India imports around 85% of our supplement grade protein powder despite being the world’s largest milk producer. Without a large scale cheese industry, we generate little sweet whey and have almost no infrastructure to process what little there is. On top of this, India got caught in a cascade. See, the US had been one of the largest exporters of supplement grade whey. But 2024 onwards, GLP1 drugs created a new source of domestic demand that helped absorb all its supply and US exports of WPC and WPI to China fell 47% in the first 4 months of 2026 compared to the year before. So, China moved its purchasing to Europe. Now, India had separately lost US supply in late 2024 due to a veterinary health certificate dispute and we also sourced nearly 60% of its supplement grade whey from Europe. So, suddenly we began competing with China for the same European supply. Industry estimates put current WPC prices in India at over rupees 2,000 to 2,300 per kilogram, three times that of the price range of rupees 700 to 800 per kilogram in 2024. Retail prices on protein supplements are up 15 to 25%.

And then our own GLP-1 generic boom made it harder for ourselves. As we’ve covered before, the semaglutide patent expired in India in March 2026. And India’s pharma giants didn’t wait to pounce on the impending gold rush. Some even launching the day after the patent expired. Dr. Reddy’s has publicly said it’s building protein supplementation products for GLP1 patients. Now, India has 254 million people with a body mass index above 25 and 89 million diabetics. Each new GLP1 patient adds to the protein demand and we’re creating more of this demand at home at the exact moment we are least equipped to supply it domestically.

So they say that the solution to high prices is high prices. The economics of building domestic hard cheese and whey processing infrastructure might make far more sense at current import prices. In fact, our recent coverage on the dairy sector’s results showed how Parag Foods is rapidly scaling up its whey production. Quite clearly, there are visible sources of domestic demand that make domestic whey production viable. But whey plants take time to build. And as with any other industry with long capex cycles, you can never tell how demand and supply will ever meet on time. Within that time there is a possibility that the market could shift. The growth of sweet whey is fundamentally dependent on India’s cheese market and until that happens India keeps buying protein powder from the other side of the planet while producing more milk than anyone else on earth.

Now coming to the tidbits Meesho’s board approved acquiring 100% of Singapore Incorporated Kirana Club and 41% of its Indian subsidiary Retail Pulse Labs for rupees 202.08 cr payable in three tranches. Coming to the next tidbit, industry bodies representing 80% of India’s liquor market accuse Telangana of breaching accounting rules by paying new dues while leaving rupees 3,725 cr in December 2025 to April 2026 dues unpaid risking bad debt. Coming to the final tidbit, the trade promotion council of India constituted a bio energy committee on June 12th to facilitate policy dialogue and investment frameworks positioning biogas, ethanol blending and biomass power as strategic pillars of India’s energy transition. That’s all the news I have for you. Thank you so much for watching and see you in the next one. Disclaimer, this content is for informational purposes only. None of the stocks, brands or products mentioned are recommendations or endorsements.