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The Ministry of Food Processing Industries (“MFPI”) is planning to implement measures to drive growth and enhance the global competitiveness of the Indian food industry. In its recent discussions with the stakeholders, MFPI assured that it is going to take steps to attract investments, develop industry standards, and facilitate technology transfer. Additionally, MFPI aims to promote the adoption of locally manufactured machinery and support research and development in the food sector.

Furthermore, to curb speculative volatility and safeguard consumer interests amid fluctuating food prices, the Securities and Exchange Board of India has extended the suspension of trading in derivative contracts for key agricultural commodities—including wheat, non-basmati paddy, mustard seeds, soya bean, crude palm oil, and pulses—until March 31, 2025. With food inflation and supply dynamics remaining key concerns, this regulatory move underscores broader efforts to stabilize the agricultural market and ensure fair pricing mechanisms for consumers as the commodities market plays a vital role in maintaining price stability and ensuring supply chain efficiency for essential food products.

The Budget (2025-2026) proposes development measures spanning over 10 (ten) broad areas focusing on Garib, Youth, Annadata and Nari. Among others, for Annadatas i.e., farmers, the Government has proposed the following:

1. introduction to Prime Minister Dhan-Dhaanya Krishi Yojana, to enhance agricultural productivity, adopt crop diversification and sustainable agriculture practices, augment post-harvest storage at the panchayat and block level, improve irrigation facilities, and facilitate availability of long-term and short-term credit;
2. introduction to a 6 (six) year mission for aatmanirbharta in pulses, with a special focus on tur, urad and masoor. The mission will place emphasis on development and commercial availability of climate resilient seeds, enhancing protein content, increasing productivity, improving post-harvest storage and management, and assuring remunerative prices to the farmers;
3. launching of a comprehensive programme for vegetables and fruits to promote production, efficient supplies, processing, and remunerative prices for farmers in partnership with states;
4. establishing a ‘Makhana Board’ in the state of Bihar to improve production, processing, value addition, and marketing of makhana (fox-nut). The people engaged in these activities will be organised into Farmer Producer Organisation (“FPOs”);
5. launching a national mission on high yielding seeds, aimed at strengthening the research ecosystem, targeted development and propagation of seeds with high yield, pest resistance and climate resistance and commercial availability of more than 100 (hundred) seed varieties released since July 2024;
6. introduction to mission for cotton productivity to facilitate significant improvements in productivity and sustainability of cotton farming, and promote extra-long staple cotton varieties;
7. the loan limit under the Modified Interest Subvention Scheme for ‘Kisan Credit Cards’, which facilitates short term loans for farmers, fishermen, and dairy farmers, is enhanced from INR 3,00,000 (Indian Rupees three lakh) to INR 5,00,000 (Indian Rupees five lakh);
8. establish a National Institute of Food Technology, Entrepreneurship and Management in Bihar to support food processing activities in the entire Eastern region; aiming at enhancing income for farmers through adding value to their produce and providing skilling, entrepreneurship and employment opportunities for the youth;
9. reduction in the Basic Customs Duty (“BCD”) from 30% to 5% on Frozen Fish Paste (Surimi) for manufacture and export of its analogue products, and reduction of BCD from 15% to 5% on fish hydrolysate for manufacture of fish and shrimp feeds; and
10. reduction in customs duty on Synthetic flavouring essences and mixtures of odoriferous substances of a kind used in food or drink industries from 100% to 20%.

This edition of the JSA Foods and Consumer Newsletter highlights recent (December 2024 – February 2025) regulatory developments focused on consumer protection and the facilitation of food businesses in India.

 

Strengthening food safety compliance

The Food Safety and Standards Authority of India (“FSSAI”), vide circular dated December 3, 2024, has advised the e-commerce Food Business Operators (“FBOs”) on strengthening food safety compliance and help mitigate risks associated with food borne illnesses and fraudulent practices. Some of the key recommendations include:

1. prioritise the training of the last-mile delivery personnel to ensure food safety and hygiene practices:
2. ensure that food and non-food items are delivered separately to avoid the risk of cross contamination;
3. any product claims made on e-commerce platforms must be fully aligned with the information provided on the product’s physical label. No claims that are not substantiated on the product packaging should appear online;
4. e-commerce FBOs must have mechanisms in place to ensure that products listed on their platforms are in compliance with Food Safety and Standards (“FSS”) (Labelling and Display) Regulations, 2020 (“FSSLDR”);
5. at the time of delivery, products must have a minimum shelf life of 30% or at least 45 (forty-five) days before expiry; and
6. e-commerce platforms are encouraged to prominently display the FSSAI license/registration numbers of sellers and hygiene ratings obtained by FBOs. No e-commerce FBO can list any food business operator/seller on its platform without displaying their valid FSSAI license/registration.

 

National Legal Metrology Portal for ensuring fair trade, consumer protection and a centralised database of all stakeholders

The Department of Consumer Affairs, vide press release, dated December 4, 2024, proposed to develop the National Legal Metrology Portal (“eMaap”) to integrate State Legal Metrology Departments and their portals into a unified national system. This initiative aims to streamline processes for issuing licenses, conducting verifications and managing enforcement and compliance. By creating a centralised database, eMaap eliminates the need for stakeholders to register on multiple State portals, fostering ease of doing business and transparency in trade practices. In particular, enforcement and compounding, which were not handled online thus far, are likely to come online. For traders and industries, it minimises compliance burdens, reduces paperwork and ensures timely adherence to the provisions of the Legal Metrology Act, 2009, creating a transparent and conducive business environment. For consumers, eMaap ensures that trade instrument is verified for accuracy, enhancing confidence in market transactions. The portal, currently in planning and development stage, is also expected to significantly boost manufacturing growth by fostering efficiency and accountability.

 

Integrating artificial intelligence to improve agriculture

The Ministry of Agriculture and Farmers Welfare (“MoAFW”), through a press release dated December 10, 2024, highlighted various Artificial Intelligence (“AI”) tools aimed at addressing challenges in the agricultural sector. These tools include: an AI-driven chatbot, ‘Kisan e-Mitra,’ designed to assist farmers with inquiries about the PM Kisan Samman Nidhi scheme; the National Pest Surveillance System, which leverages AI and machine learning to identify crop threats, helping mitigate yield losses caused by climate change through early detection and intervention; and the use of satellite imagery, AI-driven weather data analysis, and soil moisture metrics to assess crop health through field photograph analysis.

Further a centrally sponsored scheme of Per Drop More Crop (“PDMC”) is being implemented. The scheme focuses on enhancing irrigation systems at the farm level. The Government provides financial assistance of 55% for small and marginal farmers and 45% for other farmers for installation of drip and sprinkler systems under the PDMC.

As the agri-sector and its growth gets more scientific and efficient, resource deployment in it by strategic players and investors would become more attractive.

 

Public utility services

The Ministry of Labour and Employment, vide notification dated December 11, 2024, has declared the services of the industry engaged in food stuffs, to be a public utility service for the purposes of the Industrial Disputes Act, 1947, for a further period of 6 (six) months with effect from December 11, 2024. In effect, this would carry this status through to June 10, 2025.

 

Removal of licensing requirements, stock limits and movement restrictions on certain foodstuffs

The Ministry of Consumer Affairs, Food and Public Distribution (“MoCA”), vide notification dated December 11, 2024, has amended the Removal of Licensing Requirements, Stock Limits and Movement Restrictions on Specified Foodstuffs Order, 2016, by changing the limitation of storage of wheat for a period up to 31st March 2025 with following stock limits for all States and Union Territories:

1. trader/wholesaler: 1000 MT (one thousand metric tonne) (earlier this was 3000 MT (three thousand metric tonne));
2. retailer: 5 MT (five metric tonne) (earlier this was 10MT (ten metric tonne)) for each retail outlet;
3. big chain retailer: 5 MT (five metric tonne) (earlier this was 10MT (ten metric tonne)) for each outlet subject to maximum quantity of 5 (five) multiplied by total number of outlets metric tonne stock at all their outlets and depots put together (earlier this was 3000 MT (three thousand metric tonne) at all their depot); and
4. processor: 50% of monthly installed capacity (earlier this was 70%) multiplied by remaining months till April 2025.

Legal entities must declare the stocks position on the portal of Department of Food and Public Distribution and in case the stocks held by them are higher than the prescribed limits, then they were required to bring the same to the prescribed stock limits within 15 (fifteen) days (earlier this was 30 (thirty) days) of issue of the amendment (i.e., from December 11, 2024). It remains to be seen whether there would be an extension/modification beyond March 31, 2025, and if yes, to what extent.

 

Corrigendum to the Guidelines for Prevention and Regulation of Greenwashing or Misleading Environmental Claims, 2024

The Central Consumer Protection Authority, vide circular dated December 16, 2024, notified that the Guidelines for Prevention and Regulation of Greenwashing or Misleading Environmental Claims, 2024 will be effective from its date of publication i.e., October 15, 2024. Consequently, the guidelines are modified to incorporate the date of enforcement (earlier the enforcement date was not mentioned in the guidelines). These guidelines prevent companies from making false or misleading claims about the environment-friendly nature of their products and services.

For a detailed analysis, please refer to the JSA Prism of October 29, 2024.

 

Provision for quarterly submission of data regarding rejected and expired food items

FSSAI, vide advisory dated December 16, 2024, ensures that rejected/expired food items are not being rebranded and sold. In this regard, a new provision is introduced in the Food Safety Compliance System (“FoSCoS”) for the quarterly submission of information by FSSAI Licensed Food Manufacturers (including repacker and relabeller) and importers on the following:

1. quantity of rejected food items;
2. quantity of expired products;
3. details of actions taken with rejected/expired items.

These reports must be submitted through the FoSCoS system on a quarterly basis. The provision for submitting such data will be activated in due course, in the interim, FBOs are requested to begin consolidating the required data.

For context, the FoSCoS is stated to be a unified application built on open source platform, with enhanced features, easily configurable and has architectural capability to meet the envisaged functionalities and modules. The application is designed in such a way that it has interoperable capabilities to integrate and merge with other FSSAI applications for providing solutions to all kinds of food businesses on single platform.

 

Revised operational guidelines of Agricultural Marketing Infrastructure Scheme

The National Bank for Agriculture and Rural Development (NABARD), vide circular dated December 20, 2024, released the revised operational guidelines for the Agricultural Marketing Infrastructure (“AMI”) sub-scheme under the Integrated Scheme for Agricultural Marketing. These updates come in response to the orders issued by the Department of Agriculture and Farmers Welfare, Government of India, on November 4, 2024, and December 2, 2024, to bring modifications to the implementation and funding mechanisms under the AMI sub-scheme, which is designed to support the development of agricultural marketing infrastructure in India. Some of the key provisions are:

1. the guidelines are applicable to projects that receive term loans sanctioned on or after November 10, 2024;
2. Primary Agricultural Credit Societies (“PACS”) are eligible to avail subsidy at 33 .33% (earlier this was at 25%);
3. change in the cost norms considered for calculation of subsidy for northeastern States at INR 8,000 per MT (Indian Rupees eight thousand per metric tonne) (earlier this was at INR 4,000 per MT (Indian Rupees four thousand per metric tonne)). For other areas, for a quantity upto 1,000 MT (one thousand metric tonne) the cost norm proposed is INR 7,000 per MT (Indian Rupees seven thousand per metric tonne) and for a quantity more than 1,000 MT (one thousand metric tonne) up to capacity celling, the proposed cost norm isINR 6,000 per MT (Indian Rupees six thousand metric tonne) (earlier this was INR 4,000 per MT (Indian Rupees four thousand per metric tonne) for northeastern states and upto 1000 MT (one thousand metric tonne) at INR 3,500 per MT (Indian Rupees three thousand five hundred per metric tonne), also for more than 1000 MT up to capacity celling at INR 3,000 per MT (Indian Rupees three thousand per metric tonne));
4. additional subsidy may be provided to PACS for ancillary facilities like boundary wall, internal road, internal drainage system, weighing, grading, packing, quality testing and certification, firefighting equipment etc., which are functionally required to operate the project. These addition subsidies for additional facilities are restricted to a maximum of one-third of the total permissible subsidy of the godown component or actual (whichever is lower) (earlier the assistance for storage infrastructure was available on capital cost of the project including cost of allied facilities required to operate the project); and
5. banks and financial institutions have been advised to ensure that their controlling offices, District Central Cooperative Banks, and branches are informed about these revisions. This ensures proper compliance with the updated guidelines when processing loans for AMI projects.

For context, the continuation of the AMI Sub-scheme of ISAM is slated till March 31, 2026, based on approval of Ministry of Agriculture and Farmers’ Welfare; while its operational details may undergo periodic updates such as above.

 

Amendment to the Jute Packaging Materials (Compulsory Use in Packaging Commodities) Act, 1987

The Ministry of Textiles, vide notification dated December 31, 2024, has extended the time-period for which foodgrains and sugar will be packed in jute packaging material for supply or distribution up to March 31, 2025, or until further orders, whichever is earlier, (initially this was June 30, 2024). It remains to be seen if a further extension is notified prior to March 31, 2025.

 

Timeline for the compliance of amendments in labelling provisions

The FSSAI, in its 45th meeting, set key timelines for implementing amendments to labelling provisions under the Food Safety and Standards Regulations. The enforcement date for amendments related to the FSSLDR, as well as any other labelling changes under other FSS Regulations, has been set for July 1, 2025, with a minimum compliance window of 180 (one hundred and eighty) days from the date of notification for the amendments related to the FSSLDR. Additionally, in case of emergency situations, the implementation and enforcement of these amendments may be decided on a case-by-case basis. These measures aim to facilitate a smooth transition for businesses while upholding food safety standards. Given the timelines at hand, companies would need to calculate backwards for their preparedness, from an operational as well as compliance planning perspective.

 

Revised open market sale scheme (domestic) policy

MoCA, vide press release, dated January 17, 2025, has announced the key revisions in the open market sale scheme (domestic) policy for the year 2024-25. Pursuant to the revisions the reserve price of rice has been fixed at INR 2,250 (Indian Rupees two thousand two hundred and fifty) per quintal for sale to state governments, state government kitchens and community kitchens, without the requirement to participate in e-auctions. The reserve price of rice for sale to ethanol distilleries for the production of ethanol has also been fixed at INR 2,250 (Indian Rupees two thousand two hundred and fifty) per quintal. It must be noted that viable ethanol production is being viewed as part of the national energy strategy, which has wider ramifications reaching even the automotive and auto-components sectors.

 

Expansion in the scope of trade under electronic national agricultural market platform

To increase the coverage of agricultural commodities and offer more opportunities for farmers and traders to benefit from the digital trading platform, MoAFW, vide press release dated February 6, 2025, has expanded the electronic – National Agricultural Market (“e-NAM”) platform to boost agricultural trade with the addition of 10 (ten) new commodities, such as, dried Tulsi leaves, besan (chickpea flour), wheat flour, chana sattu (roasted chickpea flour) etc., and their tradable parameters. Pursuant to the new inclusions, the number of commodities on e-NAM platform stands at 231 (two hundred and thirty-one) (previously this was 221 (two hundred and twenty-one)). While e-NAM has faced some logistical hurdles in the past, the pan-India/inter-state trade made possible by it (and more mandis being linked on an ongoing basis), better price discovery and greater price stability for consumers is expected.

 

Credit guarantee scheme for electronic Negotiable Warehouse Receipt based pledge financing

The Central Government has approved the Credit Guarantee Scheme for electronic – Negotiable Warehouse Receipt (“e-NWR”) based pledge financing (“CGS-NPF”) as a Central sector scheme for the purpose of providing credit guarantees to loans extended by Eligible Lending Institutions (“ELIs”) to finance e-NWR based pledge loans. MoCA, vide notification dated February 13, 2025, has issued the CGS-NPF scheme operational guidelines, covering the pledge loans extended on the e-NWRs issued against agricultural and horticultural commodities. The credit facilities satisfying the following criteria are eligible for coverage under the CGS-NPF scheme:

1. loans extended by ELI to eligible borrowers against e-NWRs under agriculture credit as per the Reserve Bank of India (“RBI”) Master Directions on Priority Sector Lending subject to a maximum amount of INR 75,00,000 (Indian Rupees seventy-five lakh);
2. loans extended by ELI to eligible borrowers against e-NWRs to micro, small and medium enterprises as per RBI Master Directions on Priority Sector Lending and to farmers including small and marginal farmer, FPOs and other farmer cooperatives, subject to a maximum amount of INR 2,00,00,000 (Indian Rupees two crore);
3. the interest rate charged by the ELIs for loans against e-NWRs covered under CGS-NPF scheme should be maximum up to 3% per annum over and above the Marginal Cost Lending Rate (“MCLR”) where it is applicable. For cooperative banks where MCLR is not applicable, the rate of interest may be capped at 1% below the average lending rate to the targeted segment. However, the management committee may revise such ceiling from time to time keeping in view the prevailing interest rate scenario, reference rates of lending institutions and RBI’s credit policies; and
4. ELI must not take any collateral other than the goods mentioned in the e-NWR.

 

Introduction to Administrator Warehouse Service provider

To offer the administrative overview and facilitate the managerial function in certain circumstances, the MoCA, vide notification dated February 17, 2025, has issued the Warehousing (Development and Regulation) Registration of Warehouses (Amendment) Rules, 2025, amending the Warehousing (Development and Regulation) Registration of Warehouses Rules, 2017. In line with the amendment the concept of ‘Administrator Warehouse Service Provider’ (“AWSP”) is introduced to mean, an entity or person or warehouseman appointed by the authority under Rule 35 (power of authority in the event of potential loss to negotiable warehouse receipt holders) to take control, manage or liquidate goods in specific cases. The AWSPs appointed under Rule 35 are exempted from certain registration requirements under Rule 16 (fit and proper person).

 

Mandatory update of Form IX nominee details by FBOs

FSSAI, vide circular dated February 18, 2025, has issued a directive to all FBOs regarding the mandatory update of Form IX nominee details, along with the introduction of an auto-approval provision for certain modifications in the FoSCoS. For context, the nominee in this case is the person in charge of an establishment/branch/unit, having responsibility and liability for food safety and contraventions at such establishment/branch/unit. All FBOs must ensure that the authorities always have accurate and current information regarding their food business, including any changes in the details provided in Form IX. It is reiterated that failure to provide updated information to the authority attracts penalties as per Section 58 of the Food Safety and Standards Act, 2006. This penalty can extend up to INR 2,00,000 (Indian Rupees Two Lacs only). Further, effective from Feb 12, 2025, provision is available in the food safety compliance system for modifying the details of Non-Form C, including modifying Form IX details without requiring the approval/scrutiny of the concerned authority. The Non-Form C modification can be carried out without fee.

 

Operational guidelines for the scheme for creation/expansion of food processing and preservation capacities under Pradhan Mantri Kisan Sampada Yojana

The MFPI has updated the operational guidelines, for creation/expansion of food processing and preservation capacities and expansion of existing food processing units (“Scheme“), which were last issued in 2022. The objective of these guidelines is to facilitate the implementation of Pradhan Mantri Kisan Sampada Yojana, in the field of food processing and preservation by setting up new units and enhancing the capacities of the existing units.

The Scheme is applicable to fruits and vegetables processing, milk processing, meat/ poultry/ fish processing, ready to eat/ ready to cook food products/ breakfast cereals/ snacks/ bakery and other food products including nutritional health foods, food grains/ pulses, oil seed milling and processing based on modern technology, other agri-horti products including spices and condiments, mushroom processing and honey processing. Activities related to manufacturing of packaged drinking water and farming activities such as dairy farming, poultry farming, mushroom farming, hatcheries etc., will not be considered for financial assistance under the Scheme.

Under the Scheme, the entities applying for financial assistance are required to submit a non-refundable fee of INR 20,000 (Indian Rupees twenty thousand) and INR 15,000 (Indian Rupees fifteen thousand) for applications from Scheduled Caste/Scheduled Tribe.

 

Clarification regarding production of ethanol from sugarcane juice/syrup by standalone distilleries

MoCA, vide circular dated February 25, 2025, has clarified that distilleries including standalone distilleries are allowed to produce ethanol from sugarcane juice/syrup purchased from sugar mills only (i.e. which are producing sugar from vacuum pan process) for supplying to Oil Marketing Companies (“OMCs”) under ethanol blended with petrol programme. Distilleries/standalone distilleries are not allowed to procure sugarcane juice/syrup from any jaggery unit to produce ethanol for supplying to OMCs under ethanol blended with petrol programme as jaggery units are not covered under the Sugarcane (Control) Order, 1966.

 

Applications for approval of rapid analytical food testing kit by FSSAI

To further outline a streamlined process for manufacturers and method developers to apply for the approval of Rapid Analytical Food Testing (“RAFT”) kits, equipment, and methods, the FSSAI has issued new guidelines dated February 28, 2025, superseding its previous guidelines (dated October 31, 2023). Some of the key aspects are as follows:

1. applications can only be submitted through online RAFT portal;
2. In case of incomplete or insufficient data, the applicant will be granted 2 (two) chances for submission or correction of the required data or any rectifications/clarifications in the application. The applicant must submit the information sought for within a period of 30 (thirty) days for technical queries e.g., validation data and 7 (seven) days for non-technical/administrative queries, subject to certain conditions;
3. international manufacturers are encouraged to apply directly. Applications from Indian importers/distributors must include an authorization letter;
4. in case an overseas manufacturer has an Indian subsidiary, the application will be accepted from the Indian subsidiary only. (Since applications submitted otherwise would get rejected, there is an implication that the Indian entity would have to be ready for the responsibilities associated with this initiative as well;
5. applicants should submit separate application for each kit/equipment/method and each application should be accompanied by separate application processing fee (at INR 2000 (Indian Rupees two thousand) plus goods and service tax at 18% for single rapid food testing kit/equipment/method in a single application form). The fee will be accepted through online RAFT portal only;
6. in case of renewal of RAFT certificate, the applicants must apply for renewal on the online RAFT Portal not less than 60 (sixty) days prior to the expiration date on the certificate (as per the guidelines of renewal procedure); and
7. under the RAFT scheme, application only from commercial manufacturers of the rapid kit/equipment/method will be accepted. In certain circumstances, if the technology is transferred and the kit is manufactured commercially, the manufacturer will have to validate the kit again as per the guidelines and apply to FSSAI.

 

This Newsletter has been prepared by:

Vivek K Chandy Joint Managing Partner

Saurya Bhattacharya Partner

Rishi Sandill Associate

 

For more details, please contact [email protected].