The decision to this effect was taken by the Cabinet Committee on Economic Affairs (CCEA).
"It has been decided to lift ban on export of SMP," Agriculture Minister Sharad Pawar told PTI.
The government had banned SMP exports in February 2011 to contain rise in domestic milk prices.
When asked if there was any quantitative restriction on export, he replied in negative.
Pawar said the Commerce Ministry has also been asked to provide incentives to the exports of SMP in line with other farm produce.
The ministry has also been asked to examine the possibility of imposing import duty on SMP, he added.
The dairy industry has been facing liquidity crunch as it could not make profit through sale of skimmed milk powder due to steep fall in domestic prices following surplus supplies.
Domestic prices of SMP have declined to Rs 150 per kg now as against Rs 190-200 per kg in the same period last year.
Mother Dairy Managing Director S Nagarajan said, "The exchange rate is favourable for export but we need to ascertain
actual demand in the international market."
Sterling Agro Industries Managing Director Kuldeep Saluja said, "The move will benefit both industry and farmers. There is excess stock of over one lakh tonnes lying with industry. The export will help improve liquidity."
Milk production in India, the world's biggest producer, is estimated at over 120 million tonnes in 2011.
