Stayed FSSAI product approval scheme hits dietary supplement importers

The ambiguous scheme of product approval has been stayed by the Bombay High Court for six months, but it is causing the dietary supplement, health supplement, functional food and nutraceutical industry harm. 

Since it was launched by the Food Safety and Standards Authority of India (FSSAI) in 2012, its guidelines have been revised eight times. The last of these changes were made in May 2013. 

The stay order, meant to provide interim relief while decision on the product approval scheme is pending, has failed to revive the fading businesses of importers and manufacturers alike. 

The stay on product the approval process would continue until August 2014, but port authorities have been demanding product approvals from importers of dietary supplements and nutraceuticals. 

The authorities refused to send the landed products for testing without the product approval. As a result, no clearance would be made for the import of goods in India. 

Jayesh Mehta, proprietor of the import firm Paradise Nutrition Inc, said, “We filed for the product approval application two years back, but there is no revert on it from the authorities. It has neither been processed, nor rejected or accepted. This has affected over 70 per cent of our business.” 

“Since September 2013, our imports have completely stopped, and we are struggling to stay afloat with the sale of old insufficient stock. We have the necessary licence required to import and do business, and as per the stay order, we should have been allowed to run the business during this while,” he added. 

India is a fast-growing nutraceutical and dietary supplement market owing to the increase in life expectancy and subsequent increase in lifestyle diseases. 

The industry is expected to grow rapidly in the next ten years [according to a 2010 report by the Federation of Indian Chambers of Commerce and Industry (FICCI) and Frost and Sullivan]. Yet, Indian players are suffering huge losses with many forced to shut down business. 

A large number of food business operators (FBO) are also exporting nutraceuticals and dietary supplements to developed markets like the United States and Europe, where there is no such product approval system. However, there are adversely affected by the uncertain regulatory regime in India. 

Leading industry associations after making several representations to FSSAI officials, intense discussions with its own members and open conferences with the stakeholders have found no direction or definite solution from the authorities on the issue of product approvals. 

FBO, however, through their associations are determined to find an effective way to resolve the prevailing issues and demand an independent body to help the cause.

Background

The Food Safety and Standards Act (FSSA), 2006 was implemented in August 2010 and the FSSAI has framed regulations covering food products in August, 2011. 

In January 2012, FSSAI introduced a product approval system directing all FBO to obtain product approval before applying for the licenses under the Act, which provided automatic transition of existing licences under the Prevention of Food Adulteration Act, 1954 (which preceded FSSA, 2006), but the regulations issued in 2011 provided for a one-year time limit, which has been extended several times with no conclusion.

It appears from these advisories that the initial thought was only to limit the requirement of product approval for novel foods that contain ingredients which are introduced for the first time in the country or which do not have a history of safe use. 

However, the scope of advisories was extended to cover all categories of products which are not standardised, even if they were old and established in the market.

Most of the FBO, including those who were producing proprietary foods for a long period of time, have applied for product approval by paying Rs 25,000 for each product applied, in order to transfer the licences of existing products under erstwhile licenses and regime to the new ones. 

However, due to the lack of clarity in implementation and the criteria adopted for such approvals, many of the FBO have been facing significant problems. The majority of them have not received product approvals and no-objection certificates (NOC), despite having applied for it over a year ago, thus making them unable to apply for licences. 

Following this, a writ petition was filed in the Bombay High Court against the advisories of product approval issued by FSSAI, for which proceedings are underway. So far, FSSAI has been unable to justify whether this power to release advisories has been passed before both the Houses of Parliament or not. 

Such arbitrary Acts by the food authorities has adversely affected various sectors of food industry, especially in the states like Maharashtra, Gujarat, Karnataka, Madhya Pradesh, Himachal Pradesh and Tamil Nadu. 

The adverse effect has particularly been amplified due to interrupted operations in lieu of ultra vires advisory, leading to poor economics of the industry causing shut-downs and labour lay-offs. 

In the interim, on January 31, 2014, the Bombay High Court stayed the product approval advisory dated May 11, 2013 for a period of four weeks from February 4, 2014.

While the High Court extended the period for conversion of old licences by a period of eight weeks in an advisory issued recently, FSSAI extended the same by six months until August 2014.