Clarifying the rules

How to label imported packaged foods

A significant amount of imported packaged food, valued at close to Rs 1,000 crore, has not been allowed to be distributed recently because of improper packaging and labelling. The issue needs to be sorted out soon since a lot of such imports take place around the October-December festival season to meet, among other things, the demand for gifts. There cannot be any argument over the need for proper labelling of packaged foods, imported or domestically produced. However, concerns continue to be expressed that differential application of rules for local and imported foods gives rise to, essentially, non-tariff barriers to trade. The law in question, passed in 2006 to update legislation of the 1950s, was made operative in 2011. So it is high time both importers and regulators were allowed to be clear as to what is allowed and what is not.

The bone of contention seems to be whether printed packaging, which contains the necessary information, is a must or a sticker, which provides information needed for India, can be put on the original printed packaging. There seems to be no doubt that the Indian rules require the information to be in the printed packaging (except for veg/non-veg colour coding and the importer's name and address) and not something that is stuck on and can come off. Going by the experience of shoppers, stickers were allowed long after 2011. If the issue is important, then why have the rules not been enforced strictly for nearly two years now? An official concerned has responded by arguing that it is about time they were enforced and that consignments were held up in the past too. Regulation in India is bedevilled by the use and misuse of discretion and it appears that discretionary relaxation, allowed earlier, is now being withdrawn.

The matter seems to be relevant only in the case of high-value, exotic foods, such as speciality cheese or premium chocolates, for which Indian demand is low and it does not pay the foreign producer who probably has an established niche market around the world to go in for separate packaging for India. If a producer thinks that the Indian market is or will be important for it in the future for items like noodles and crisps, which are also being imported, then it will have no problem on business grounds to opt for separate packaging for India. Presumably, therefore, there will be no serious objection to large consignments of mass consumption items if these are packaged in keeping with the rules. Some relaxation could be formally made for items that are imported in smaller quantities. The importers' association concerned has indicated that as a result of discussions with the regulators, a particular rule has been recently changed. What is important is that whatever is agreed on should be made explicit so as to reduce the scope for regulatory discretion. What must be avoided at all costs is the appearance of raising regulatory barriers to imports even as India embarks on a delicate set of trade negotiations.