After recording a huge negative trade balance of dairy products during 1980s, India has evolved as net exporter in dairy trade during the last three decades. Exports of dairy products increased almost 200 times since early 1980s to later half of new millennium whereas value of imports decreased by 7 times by this period. The export perceived vast changes in composition as well as destination over the study period. The present study analyses the temporal changes in composition and direction of Indian dairy exports at most disaggregate level in light of several policy interventions during last three decades and identify the potential sources of gains thereof. The study is based on the secondary data from various sources on several variables, the major being dairy trade statistics from DGCI&S and ministry of commerce for 1980-81 to 2009-10. Compositional analyses of export basket indicates that India has multiplied its product portfolio from traditional dairy products like concentrated and sweetened milk and cream and fat based products to value added dairy products like cheese and curds, whey based products, yogurt and other acidified dairy products. Harfindahl index of geographical concentration indicates that the country has continuously diversified trade destinations over the last three decades. New trade partners have emerged in African Countries apart from conventional partners from Asian and European countries. In light of the empirical evidences, the study concludes that generation of more exportable surplus through improved breeding and feeding programmes is the key to amplify the foreign exchange earnings from dairy sector. Policy and research emphasis should be on development of efficient milk value chain to boost trade. To improve the bargaining power of the country, on the quality front, India should improve its image as a reliable and consistent supplier of safe and quality dairy products conforming to the international standards. A comprehensive strategy for producing quality and safe dairy products should be formulated with legal backdrop. Harmonization of BIS (Bureau of Indian Standards) quality standards with that of international quality standards will go a long way in materializing the export potential of Indian products into foreign currency.