This study was carried out on behalf of Unnayan Shamunnay for Strengthening the Dairy Value Chain in Bangladesh, project of CARE Bangladesh. The vision of the project is that targeted landless and smallholding households in North and Northwest Bangladesh have more sustainable livelihoods through incorporation into a strengthened milk value chain. The report is organized as follows: In section 2, growth performance of the dairy sector in recent years is discussed briefly. In section 3, factors influencing dairy sector growth is discussed with a focus on the impact of tax and tariff policies, role of the formal processing sector, breeding policy and breeding services, and investment, credit and subsidy. In section 4, summary and implications for the SDVC project are discussed.