Indian Industry With Positive Outlook, Thanks To Regulatory Developments

25 April, 2018


India’s mandatory food fortification scheme has been overwhelmingly backed by the industrialists, with seven out of 10 stating it will benefit their business, according to the results of annual industry survey.

The Food Safety and Standards Authority of India  (FSSAI) introduced the scheme to “close the gap” in micronutrient malnutrition. Milk, oil, rice, and wheat are some products that require fortification.

For instance, edible oil brands are required to add 800 IU of vitamin A and 550 IU of vitamin D in per  litre of product, while iron,  folic acid and vitamin B12 should be added into  rice and wheat.

However, as of December last year, many Indian companies still did not  abide by the regulatory requirements. For instance, only 12 per cent of the milk products had fulfilled  the requirements, which  were supposed to contain 770IU of vitamin A and 550IU of vitamin D per  litre of milk.

Pawan Agarwal,  CEO of  FSSAI, explained that many state officials  were still unclear on the importance and process of fortification, and therefore, state governments often needed “hand-holding” to warm to the idea of fortification.

Other than that, he said  that fortification would incur “only a minor  escalation in production cost, about 10 paisa per litre” and  “shouldn’t be a problem for big companies”.

Permitted ingredients

Meanwhile, survey results show that the respondents were divided in their views on the new  list of permitted ingredients in India.

The list was  published as part of FSSAI’s new  regulations for functional food, health supplements, nutraceuticals, food for special dietary use, food for special medical purposes and novel food.

45 per cent agreed that the new  regulations contain an adequate number of permitted ingredients, while 37.5 per cent disagreed.

Some respondents commented that they would need to be more cautious as a result of the new  regulations. Others said  the list of permitted ingredients should be reviewed from time to time.



A total of 195 ingredients were added to the initial list published by FSSAI last  year,  including resveratrol, lutein and beta-glucan.

However, 34 submitted ingredients are still pending approval from the scientific panel due to “inadequate”

data. They include common ingredients such as raspberry ketone, artichoke, cashew, and tea tree oil.

In response to concerns raised, Agarwal  said  earlier at the Associated  Chambers of Commerce and Industry (ASSOCHAM) of India’s National Symposium on Nutraceuticals that they are “open to changing those  standards, making provisions to address the concerns”.

Higher GST not harming sales

Another hot  topic  in the country was  the new  GST regulations, which  were implemented in July last  year, leading to an increase in tax rate from 12per cent to 18per cent on nutraceutical products.

This invited criticism amid fears that it would affect existing businesses and discourage start-ups from entering the market.

However, more than half of our  respondents (65 per cent) disagreed that GST has harmed their businesses’ sales. Antony  Kunjachan, Executive Director of curcumin supplier Arjuna  Natural Extracts is of the view  that outward tax liability can  be partially offset against the GST businesses pay when buying goods and services.

This will be reflected in production costs and lead to an increase in total business volume in India.

As such, he said  that the new  GST framework would be “beneficial to the economy  as a whole, and  in turn  will also benefit  the company”.


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