Importers say they’re hit as food products lie at ports

NEW DELHI, SEPTEMBER 30: 

Non-compliance with labelling norms is holding up an estimated ₹20,000 crore worth of food products at ports and airports. And importers claim to be losing out on revenues this festive season. The Food Safety and Standards Authority of India (FSSAI), however, argues that it is just following norms that have been made more stringent, such as those in the West, demanding better information for the benefit of consumers.

“We aren’t doing anything that’s not done anywhere else. The law isn’t being implemented unilaterally, it has been vetted by the World Trade Organisation. Exporters comply when other countries ask them to conform to labels; when we ask, it’s an issue. When exported Indian goods fall short on the smallest of clauses, they are dismissed from ports or destroyed,” K Chandramouli, Chairperson, FSSAI, toldBusinessLine.

The numbers provided by the standards body indicate that 304 non-conformance certificates (NCCs) were handed out from a total of 28,521 consignments (a 1.06 per cent rejection rate) from the start of this financial year in April and August 22. Last year, 1,105 NCCs were given out for 64,818 consignments — a 2 per cent rejection rate. The value of uncleared consignments was ₹44.04 crore (April-August 22, 2014). An official said that while a large number of the NCC consignments fell short on following labelling norms, others were rejected because of substandard quality.

Ambiguous norms

Officials at the Forum of Food Indian Importers (FFII) have a different take. They say the US and the European Union are also strict about importing food products but this is centred on quality. They allege that the FSSAI is rejecting products only on the basis of incorrect labelling, without even testing the contents.

“There are 17 labelling norms, of which 10-12 are common across the globe. Some norms, such as brown and green dots to distinguish between vegetarian and non-vegetarian products, are India-specific, and products are being rejected based on labelling inaccuracies,” said an FFII member. The ambiguity of some of these regulations, he said, was hurting everyone — “food importers, five-star hotels and food manufacturers.”

Food industry sources said some key international companies that exported products had pulled out of India as they felt it was still a small market that didn’t justify the losses.

Chandramouli refuted industry claims, stating that these grievances stemmed from a small number of players, particularly those importing chocolates, alcohol (whisky) and Canola (edible oil). The meagre number of rejections debunks the basis of such protests, he added.

“India has received 2.25 lakh consignments after the Food Safety & Standards Act (Packaging & Labelling) became operational on August 5, 2011. The rejections are around 2,000; but importers — particularly of chocolates, alcohol and Canola — are making it sound like it is a huge volume,” he said, adding that strict implementation of the Act had disrupted backdoor channels that compromised consumer safety.

He said quality checks are conducted after a product passes the labelling check. On testing samples of imported chocolates, FSSAI found vegetable oil, a banned substance here, to be present, sometimes at amounts of 37 per cent. “For whisky, we have only asked for the contents contained – alcohol, water, caramel and any colouring additives. We have asked Canola manufacturers to just mention that it is rapeseed oil with low erucic acid content on the package. Rapeseed oil is similar to mustard oil,” Chandramouli explained.

Canola sells for ₹400/litre while mustard oil is available at ₹100/litre. With regard to alcohol, no ingredient list is required for single-ingredient products.

Importers’ stand

Food importers say the FSSAI standards are hazy for several product categories that meet international standards but are rejected at Indian ports. Others point out that 20-30 per cent of small importers have shut shop and moved to other businesses after suffering huge losses. The festive season may be particularly impacted by the stalled imports, they say.

“The festive season is when demand for such food products, not available in India, reaches its peak. It’s not just finished products, but key ingredients needed by Indian food manufacturers for which imports are planned nearly six months in advance and foreign exchange already paid. These products are also lying at the ports,” said Firoz H Naqvi, Secretary, Food Ingredients Manufacturers & Suppliers of India Association said.

Committee planned

FSSAI, an autonomous body under the Health Ministry, is now in the process of setting up a committee with representatives from the industry, consumer groups and food scientists, among others, to look into product approval regulations. The panel is likely to hold its first meeting in early October.

“Times are changing and importing just about anything cannot go on. Standards will evolve in response to the rise in product inflows and new technologies. Labelling norms are the first step to achieving better standards,” said Chandramouli.