India is the largest milk producer in the world. The dairy sector has benefited from strong public support since Operation Flood in the 70s, which allowed small scale milk producers to have a stable access to urban markets through an extended network of dairy cooperatives. With the liberalisation reforms of the 90s, the environment under which dairy cooperatives operate has become increasingly competitive and globalized. As a result, cooperatives have started to lose ground in the milk sector: according to the National Dairy Development Board (NDDB), in 15 years private operators including Multinational Corporations (MNCs) have created processing capacities equal to that set up by cooperatives in more than 30 years. The policy response in India has been the promotion of Producers Companies as ‘New Generation Cooperatives’ which combine the values and equity concerns of cooperatives with features of private enterprises. The state of Andhra Pradesh,one of the leading dairy states of India (ranked 5th for milk production in 2015-16), is chosen as a case study. Private dairies are particularly strong and dynamic: the cooperative sector accounted only for 5.2% of the milk output in 2011 compared to 33.8% in Gujarat. A Business Model (BM) approach enriched by an institutional focus on the rules influencing ownership rights, value creation and distribution inside the value chain is implemented. The comparative study of five dairy business models in three districts shows a diversity of situations. It highlights that private and cooperative BM differ more in terms of transparency and support to farmers' capacity building than in terms of milk price. Preliminary lessons regarding the inclusive development of dairy value chains emphasize the enabling role of the legal framework and of sector-specific institutions.