How India’s Cooperative Movement Is Being Recast for Inclusive Growth in the International Year of Cooperatives 2025

India’s cooperative movement, rooted in the civilisational idea of “Vasudhaiva Kutumbakam”—the world as one family—has long viewed economic activity through the lens of collective welfare. In 2025, as the world marks the International Year of Cooperatives, India’s renewed policy thrust under the vision of “Sahkar Se Samriddhi” signals an effort to reposition cooperatives as engines of inclusive growth, rural transformation and grassroots democracy.

Why cooperatives matter in a changing global context

Cooperatives are not merely business entities; they are member-owned and member-governed institutions that blend economic activity with social purpose. The International Cooperative Alliance defines them as enterprises guided by shared economic, social and cultural goals. Their global relevance received renewed recognition when the United Nations declared 2025 as the International Year of Cooperatives, under the theme “Cooperatives Build a Better World”, highlighting their role in achieving the Sustainable Development Goals by 2030.

For India, this global spotlight coincides with a domestic policy moment. With over one-fourth of the world’s cooperatives and deep penetration in rural areas, the cooperative model aligns closely with India’s development priorities of inclusion, decentralisation and resilience.

From colonial credit societies to pillars of decentralised development

The cooperative idea in India acquired legal shape during the colonial period with the Cooperative Credit Societies Act of 1904. After Independence, cooperatives were consciously promoted as instruments of decentralised planning and participatory governance, especially in agriculture and rural credit.

Institutional milestones followed: the creation of the National Cooperative Development Corporation in 1963 and the National Bank for Agriculture and Rural Development in 1982 strengthened financing and oversight. A major recent shift came with the establishment of a dedicated Ministry of Cooperation in July 2021, signalling focused national attention to the sector.

The scale of India’s cooperative ecosystem today

According to the National Cooperative Database, India has over 8.5 lakh cooperative societies, of which about 6.6 lakh are operational. These institutions cover nearly 98% of rural India and serve around 32 crore members across sectors ranging from agriculture and dairy to housing, fisheries and women’s welfare.

Iconic cooperatives such as Amul coexist with large national bodies like Indian Farmers Fertiliser Cooperative and Krishak Bharati Cooperative, alongside thousands of Primary Agricultural Credit Societies (PACS). Together, they connect farmers, artisans and workers to markets while anchoring livelihoods at the village level.

Reforming PACS: transparency, technology and expanded roles

A central pillar of recent reforms has been the effort to make PACS economically vibrant and institutionally robust. Model bye-laws now allow PACS to undertake more than 25 business activities, expand membership to women and SC/ST communities, and strengthen internal governance. Most States and Union Territories have aligned their frameworks accordingly.

Equally significant is the digital overhaul. A nationwide ERP-based computerisation project is integrating PACS with cooperative banks and NABARD, enabling real-time accounting, online audits and multilingual access. This push is not just about efficiency; it aims to restore trust, reduce leakages and position PACS as modern service centres rather than legacy credit outlets.

Cooperatives as last-mile service delivery hubs

PACS are increasingly being woven into the delivery architecture of central government schemes. Thousands now function as Pradhan Mantri Kisan Samriddhi Kendras, Common Service Centres, Jan Aushadhi medicine outlets and even fuel retail points. In many villages, the cooperative has become a one-stop interface for credit, inputs, digital services and welfare schemes.

This multipurpose approach is complemented by the formation of Farmer Producer Organisations and Fish Farmer Producer Organisations through cooperative structures, strengthening aggregation, processing and market access while retaining farmer ownership.

Building resilience through storage, dairy and agri-markets

The world’s largest decentralised grain storage plan in the cooperative sector seeks to address chronic gaps in rural storage by creating godowns, processing units and fair price shops at the PACS level. Parallelly, White Revolution 2.0 aims to expand dairy cooperatives into uncovered regions, increase milk procurement and improve incomes, particularly for women producers.

Initiatives linking cooperatives to assured procurement of pulses and maize at MSP reflect a broader strategy of using cooperative networks to stabilise farm incomes while encouraging diversification.

New national cooperatives and the push towards markets and exports

The creation of new apex multi-state cooperatives marks another structural shift. Bodies such as National Cooperative Exports Limited and National Cooperative Organics Limited are designed to aggregate produce, ensure quality standards and connect cooperatives to domestic and global markets. This signals a move from subsistence-oriented cooperation to market-integrated, brand-driven models.

Investing in capacity, skills and institutional credibility

Recognising that institutions are only as strong as their people, the establishment of India’s first national cooperative university—Tribhuvan Sahkari University—aims to professionalise cooperative management through education and research. Large-scale training programmes for PACS members and board representatives complement this effort, addressing long-standing gaps in governance capacity.

Financial reforms, including tax relief, easier cash transaction limits for PACS, and revival packages for cooperative sugar mills, further seek to restore viability and competitiveness.

Why the cooperative moment matters for India’s future

As India aligns its cooperative reforms with the International Year of Cooperatives 2025, the larger significance lies in reimagining cooperatives not as relics of a planned economy but as adaptable, community-rooted enterprises. Digitalisation, expanded mandates and stronger institutional support are reshaping how cooperatives function in markets while retaining their social ethos.

In an era marked by rural distress, climate uncertainty and employment challenges, the cooperative model offers India a distinctive pathway—one that blends economic efficiency with social solidarity, and growth with participation.