The dairy industry plays a vital role in India’s agrarian economy, with small-scale milk dairies contributing significantly to urban milk supply chains. This research paper presents an analytical study of small milk dairies in Pune City, focusing on the operational practices, economic viability, supply chain dynamics, and challenges faced in a competitive and regulated market environment. Primary data was collected through structured interviews and questionnaires from selected small dairy owners across various zones of Pune. The study also incorporates secondary data from government reports, industry publications, and academic literature. Key parameters such as procurement sources, pricing strategies, distribution networks were examined. The findings highlight the resilience of small dairies the dependence on informal networks, and the need for building customer base. The paper concludes with recommendations to enhance the sustainability and efficiency of small dairies through policy interventions, cooperative models, and adoption of technology. This study contributes to a deeper understanding of the grassroots level of the dairy sector in urban India and provides a basis to increase its availability to a larger network and customer base.