FDI may rise 25% as FSSAI eases product approval norms: Badal

Relaxed norms will lead to more innovation and product launches and promote traditional food, says the minister

Foreign direct investment in the food processing sector is likely to go up by at least 25 per cent as FSSAI streamlines regulations to ease product approvals, Union Minister Harsimrat Kaur Badal has said.

The Food Safety and Standards Authority of India (FSSAI) had laid down quality standards for only 370 products. The regulator's approval was a must for all other products.

Now that the approval process has been relaxed, products with ingredients that are approved by the regulator may not require any approval, which will lead to more innovation and product launches and promote traditional food, Badal told PTI.

"Our contention has all along been 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. This approach espoused by the Food Processing Ministry has now found favour with the regulator," Badal added.

Proprietary food means an article of food that has not been standardised under the food safety and standards regulations.

FSSAI has also issued a notice for operationalisation of standards for proprietary food, under which the definition has been changed.

The proprietary food has now been defined as an article of food that has not been standardised under the regulations but which contains approved ingredients and additives. From now on, such products may not require regulatory approval.

However, the notice mentions that proprietary food does not include dietary supplements, nutraceuticals and genetically modified food products, among others. And the onus for the safety of food products will be on food business operators.

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.

"With these 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," Badal said.

She added that the Food Processing Ministry has been repeatedly taking up all these issues with FSSAI to find a solution to the problems being faced by the industry.

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

The minister had also written a letter to the Prime Minister in this regard.

The minister also mentioned that clarity on import of the products and introduction of risk-based inspection system is a noteworthy step, which would remove clutter for importers and others.

"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 regulator has also notified that food items which

have at least 60 per cent shelf life or more will only be allowed to import, a move aimed at checking dumping of products.

"Now, the regulator is moving in the right direction and we hope it will continue with the same," All India Food Processors Association Amit Dhanuka said.

The legality of FSSAI's earlier product approval process was questioned by the Supreme Court last year, which stopped it on the ground that it was an advisory rather than a regulation.

Post ruling, FSSAI came out with a circular on August 26, saying the approval process will be accorded the status of regulation.

Indian food processing industry accounts for 32 per cent of the country's total food market, which is estimated at around USD 190 billion 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 USD 6,548 million.