Laws and Legal Compliances applicable upon Foreign Companies for Selling their Food Products and Beverages in India: Lawyers Advice

One of the fastest growing industries in India is food and beverage. A large part of the industry consists of import and export of food products along with the local produce and its multi-tier wholesale and retail.
Laws Governing Food and Beverages: –
While Section 3 of the Food and Safety Standards Act, 2006 covers the definition of food business, Section 31 of the Act lays down rules for the

Licensing and Registration of Food Businesses in India.
A food license from Food Safety and Standards Authority of India needs to be obtained by every food business owner including a petty vendor/ hawker.
There are 3 types of licenses given by FSSAI: –
• FSSAI Registration
• FSSAI Central License
• FSSAI State License

The FSSAI Registration/License application can be submitted either through offline methods or online. The food business owner has to send an application to the Licensing Authority along with the necessary fees in order to attain the license offline. The portal introduced by FSSAI, the Food Licensing and Registration System (FLRS), can be utilised for online license/ registration.

An FSSAI license number is given to the food business operator, on completion of the registration process. A central license will be required for the head office/registered office, if the food business is operating in more than one state. The license that is issued can be of varying validity ranging from 1 year to 5 years. A heavy penalty is levied on food businesses running without an FSSAI Registration/License.

The labeling standards for packaged food products in India are governed by the Food Safety and Standards Act, 2006 as well as the Food Safety and Standards (Packaging and Labeling) Regulations, 2011.
Furthermore, the labeling standards in India can vary from state to state, for example, some states require the statutory warning to be in the local language, etc. Additionally, retail packages and the wholesale packages carry different labelling requirements.

Entities Requiring Licensing/Registration: –
• Any individual who is into the business of manufacture, sale, packing, transport of food, storage is called a Food Business Operator (FBO).
• All FBOs need either a License or Registration under the Act to sustain a business of manufacture, sale, packing, transport of food, storage.
• It is also compulsory for all Petty Food Manufacturers to register themselves with the Registration Authority by giving in a registration application in Form – A under Schedule – 2 with fees laid down in Schedule – 3.

In the case of Vital Nutraceuticals Private vs. Union of India (W. P. No. 2746 of 2013), it was held that Food Safety and Standards Authority of India has the power as well as the authority to issue Advisories by utilising the power given to it under sections 16(1) and 16(5) as well as under sections 18 and 22 of the Act and no company can carry on business in contravention to these Advisories.

Entities that can be granted license: – License is granted by the Central Licensing Authority to following food businesses: –
• All Importers and 100% Export oriented Units.
• All FBOs as well as re-packers and re-labellers falling under the requisite criteria.
• All FBOs manufacturing any item of food.
• All FBOs operating in two or more than two States.

Trading or Eating House Licenses
The Municipal Corporation Laws of States in India usually grant food businesses a Trade License as an ‘Eating House’. Any food business, by making an application to the concerned municipality operator, can obtain a trade license. Trade licenses issued in most States are usually valid for a time-period of 1 year and can be renewed on payment of yearly fees.
Every outlet must have a valid trade license from the concerned municipality, if there is a plan to open more than one outlet.

Licenses Pertaining to Pollution
Given the smoke emissions from the process of cooking and food waste washing, food business is considered a polluting industry. Thus, a food business will require a pollution certificate or license from the State Pollution Control Board to start business and to operate. The type and scale of operations of your business will decide the category under which you will need a license.

The following is the category wise separation as decided by the Central Pollution Control Board for hotels/restaurants: –
• Small Bakery or Confectionery – Green Category
• Small Hotels – Green Category
• Medium-Scale Hotels – Orange Category
• Non-Alcoholic Beverages – Orange Category
• Hotels (Big) – Red Category

Licenses Relating to Infrastructure
Food Businesses which require to store Liquid Petroleum Gas (LPG), Boilers, Kerosene, Diesel etc may need a license from Petroleum and Explosives Safety Organisation, if the amount of such flammable materials exceeds the set limit.
Owning a diesel generator having a capacity above 500 KVA, needs a Genset registration from the Electrical Inspector.

In conclusion, given how food joints and online food businesses that deliver food have gained massive popularity among the youth, the legal formalities necessary to start a food business in India are highly complicated and can confuse food business aspirants but are all the more necessary to ensure quality and safety is ensured so that eating from outside does not become a health hazard for consumers.
Authored By: Adv. Anant Sharma & Parinay Gupta