India Moves to Tighten Food Labeling Laws

The growing market for packaged food provides both opportunities and challenges to food processors, importers, food packagers, and labelers to respond to consumers’ requirements. Innovations in food product development, packaging, and labeling are becoming key factors for survival across the world. Therefore, product packaging and labeling have numerous important roles to play in the emerging market environment.

Some consider food labeling a tool to promote and protect public health by providing accurate nutritional information so that consumers can make informed dietary choices, while others see it as an instrument of marketing and product promotion. Several studies indicate that the label can reduce the information problem between producers and consumers, while also reducing search costs for consumers.

It is argued that a food product constitutes a bundle of attributes (i.e., search, experience, and credence) that serve as critical indicators for analyzing food quality and safety:

• Search attributes are those for which consumer can obtain full information about the product prior to purchase (color, size, shape);

• Experience attributes are those product characteristics that can only be determined after consumption (taste, flavor); and

• Credence attributes are product characteristics that can be known only after a long lag; some credence attributes are hazards that cannot be determined with certainty (nutrition, pesticide residues, calorie).

It is quite evident that most of the quality properties of food products are credence characteristics, with effects that cannot be inferred before, or sometimes even after, consumption; these necessitate mandatory food safety regulations to alleviate risks and hazards. Available literature suggests that one of the most practical methods for addressing credence problems is proper food labeling coupled with an effective institutional arrangement for implementation and certification of food safety processes.

Regulation

The disclosure of information on food labels in India is primarily governed by the Prevention of Food Adulteration Act of 1954, which focuses mainly on basic product information with less emphasis on health and nutritional information. However, recent amendments regarding packaging and labeling of food under part VII of the Prevention of Food Adulteration Rules of 1955 mandate the disclosure of health and nutritional claims on food labels along with basic information. The recently integrated Food Safety and Standards Act (FSSA) of 2006 also aims at establishing a single reference point for all matters relating to food safety across the country, by moving from multilevel, multidepartmental control to a single line of command.

Chapter IV, paragraph 23 of the FSSA clearly states that no person shall manufacture, distribute, sell, or expose for sale, nor dispatch or deliver to any agent or broker for the purpose of sale, any packaged food product that is not marked and labeled in the manner specified by regulation. The Food Safety and Standards Authority of India was established to speed up the implementation of various rules and regulations in the act.

Standards for Imported Products

Despite being a leading producer of many agricultural products, including milk, India accounts for only about 1.5% of the global processed food trade. And, although India is a net exporter of agricultural products, the demand for imported food products in the country has been increasing much faster than the growth in exports. With increasing income levels and changing consumer lifestyles, the demand for imported processed and packaged food products continues to grow.

According to a recent India Agribusiness Report by Business Monitor International, India is among the world’s largest and fastest-growing markets for milk and milk products, growing at nearly 7.5% annually. The demand for value-added dairy products is increasing at a double-digit rate. It is important to note that demand is growing slightly faster than supply; serious issues with respect to self-sufficiency in the near future could further spur the import of milk products.