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This thesis examined the prospects and challenges of the dairy industry in India, which happens to be one of the country’s largest growing sector. The thesis aimed to investigate the current status and future prospects of the dairy sector of Punjab in India, which provides livelihood, nutrition, income, and empowerment for millions of rural families and contributes to the national economy. The thesis also evaluated service quality and consumer attitudes toward dairy products in India, which have a high demand and preference, especially for milk and curd. The thesis used questionnaires for data collection and analysis. The thesis collected data from 150 consumers (75 urban and 75 rural) and 110 dairy owners in rural Punjab using surveys. The thesis found that there are significant differences between the urban and rural consumers in terms of their preferences, satisfaction, and availability of dairy products. The thesis also found that the dairy owners in rural Punjab have various practices, strategies, resources, and outcomes in their dairy business. They face various opportunities and challenges in terms of production, processing, marketing, and income generation. Moreover, the thesis explored the expectations that they have towards the local government regarding their dairy products. The thesis discussed the implications and limitations of the research findings for both theory and practice. The thesis contributed to the existing literature on consumer behaviour towards dairy products by providing new insights and perspectives from a specific context.