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FSSAI eases approval norms to boost FDI in food processing

18 January 2016

The food processing industry is expected to record higher growth in the coming years after the Food Safety and Standards Authority of India (FSSAI) relaxed approval norms for proprietary food products, by doing away with the approval process for products whose ingredients are already approved by the regulator.

FSSAI has now issued a notice for operationalisation of standards for proprietary food, which mentions that proprietary food does not include dietary supplements, nutraceuticals and genetically modified food products, among others.

Besides, the regulator has also uploaded a list of more than 8,000 permitted food additives, the food items in which they can be used and the recommended maximum level.
Since these products are exempted from the regulatory approval process, foreign direct investments in the food processing sector is likely to go up by at least 25 per cent, union minister for food processing industries Harsimrat Kaur Badal has said.

''With the new regulations in place, the industry's concerns regarding product approvals will be addressed to a large extent. And I am optimistic that in coming months, there will be an increase of 25 per cent FDI in the food processing sector.''

Proprietary foods have also been defined as an article of food that has not been standardised under the FSSAI regulations, but which contain approved ingredients and additives.

The FSSAI has laid down quality standards for only 370 products and all other products needed the regulator's approval. But, from now on, such products may not require regulatory approval if the ingredients of such products are approved by the regulator.

The regulator has also notified that only food items which have at least 60 per cent or more shelf life will be allowed to import, a move that will help check dumping of products.

Badal said the food processing ministry has all along been arguing that proprietary food products, for which standards are not defined in the Food Safety and Standards regulations, but have approved and standardised additives should not require product-by-product approval.

"I myself had also met health minister J P Nadda a few times on these issues," she said.

The minister said she had also written a letter to the prime minister in this regard.

The new measure would bring clarity on the import of the products, she said, adding that the introduction of the risk-based inspection system is a noteworthy step, which will remove prospects of a flood of imports.

"Now, our efforts have yielded results. This will ease the process of doing and expanding business in the food processing sector," the minister added.

The food processing sector accounts for 32 per cent of the country's total food market, which is estimated at around $190 billion (nearly Rs?128,000,000 crore) and ranked fifth in terms of production, consumption and exports.

The industry employs 13 million people directly and 35 million indirectly. In the last 15 years, the sector attracted FDI to the tune of $6.55 billion (nearly Rs44,100.78 crore).

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