Cutting the red tape in India’s food sector
Indian regulations may become easier to navigate
India could be gearing up to streamline its notoriously bureaucratic system of food approval. This, industry experts argue, could not only shorten routes to market but also strengthen food safety in the country. Mini Pant Zachariah reports.
The notorious amount of red tape that can strangle the efficient import of branded food into India maybe reduced through the possible introduction of a Rre-Arrival Document Review (PADR) system, just-food was told at the India Food Forum in Mumbai.
Amit Lohani, founding director of the Forum of Indian Food Importers, explained that a pilot project for the new system will kick off this month. The pilot is being run by the Food Safety and Standards Authority of India (FSSAI).
The complexity of India’s import regulations are also a logistical headache. Importers of perishables like vegetables, fruits and meat have complained about the time it takes for Indian customs to clear their products, which they say adversely affects quality.
According to Anil Chandok, director of high-end importer Chenab Impex, it is "impossible to import something with a short shelf life" because it "would never be cleared by customs on time."
Lohani believes PADR could change that. "Under the PADR, an importer will upload information before the import starts. The authorities would then tell them whether the product conforms to the standards vis–à–vis the ingredients, the shelf life, best before date etc. It would help importers tremendously as their goods will not languish in the ports," he explains.
Indian food regulations are well known for being complex and this is to the detriment of food safety in the country. Food safety problems are commonplace and the issue gained national and international attention last year when Swiss multinational food giant Nestle‘s was forced to recall its Maggi instant noodle brand 2015.
The popular instant noodle brand was banned for a good part of 2015 after the FSSAI reported that packets of Maggi contained lead content beyond permissible limits as well as unlabelled monosodium glutamate (MSG). Nestle denied these accusations and subsequent tests failed to detect elevated levels of lead in the product.
However, by the time Nestle returned Maggi to shelves in November last year, considerable damage had been done. The recall trimmed about 30 basis points off Nestle’s organic growth over the course of the ban. On Nestle’s Asia, Oceania and Africa (AOA) division, the negative impact was about 170 bps.
While there is consensus within India’s branded food industry that safety norms should be stringent and followed in India as in other countries, Lohani adds, "companies want the law [to] be clean, clear and easy to understand." He also wants to see more predictability in enforcement, with officials’ interpretations of regulations currently varying significantly – increasing headaches for importers.
Labelling nomenclature in food safety is another concern. Chandok says that in this issue, India’s food sector is still governed by antiquated laws set in 1954. "Labelling has become a big issue and involves cost," he warns. The sometimes nitpicking enforcement of complex labelling rules blocks safe imports, which has "reduced choices for the consumer", he continues. "It is not possible, for instance, to import wild forest mushrooms or organic tofu or a hundred other products now."
In a country with a young aspirational population exposed to global trends, this could represent lost opportunity for the food industry.
Chandok also believes the FSSAI’s own regulations cause confusion by saying food shall be declared unfit if it does not meet labelling standards. Lohani pointed out that many companies, including multinationals, do contract manufacturing in India. If by mistake, a label misses out the name of the manufacturer or the manufacturer does not want to disclose the name, such goods are labelled as "substandard".
"Goods should be marked substandard if they fail a lab test for food safety. The basic parameter should be whether it is safe for human consumption or not," he insists while Lohani suggests there should be a unique number on the label to denote whether the facility producing the product has the licence to produce food or not.
However, Lohani believes that the regulatory system is evolving. "We see a lot of positive measures in the last six months to have a single window operation," he observes citing government reforms designed to reduce from 10 to one the number of government agencies and ministries that have to be contacted for such paperwork.
One issue that is particularly galling for Indian branded food manufacturers and retailers is the gulf between controls they must follow and those imposed on traditional unbranded producers and retailers. The crackdown on Maggi noodles brought into sharp focus the food safety norms, or lack of them, for local roadside foods such as samosas and vada pav, that are fried and refried often in oil of dubious origin in India.
"Traditional Indian snacks are exempt from food safety norms. Nearly 97% of the population consumes it on a daily basis. Safety is important at that level too," Lohani argues.
Gaurav Tandon, head of sales and operations at Epicure Frozen Foods and Beverages Pvt Ltd, aagrees. "We need strong [food safety] law enforcement in the domestic industries as much as in the import industry…what you see on the street is shocking," he tells just-food.