Nowadays, a very common word is uttered by the educated youngsters “Start-Up “. What’s the actual meaning of a Start-up? It is actually a young developing company, less than seven years old, usually small and initially financed and operated by an individual or a handful of founders. It’s a newly emerged, fast-growing entrepreneurial venture involving innovative products and services. Its annual turnover should be less than INR 25 crores. Startup companies shall be working towards innovation, improvement or development of the existing products or processes or services. It will create wealth and has a high potential for employment generation. So startup is different from traditional small businesses. Startup in the Agribusiness Sector Agribusiness sector in India appears to be a prospective sector for the Startup companies as India has a major agribusiness sector which is highly untapped. Segments like processed fruits and vegetables, cereal-based products, meat, poultry and fishery products, dairy products, beverages and confectionery, snack foods offer a huge potential. At present, Indian food processing industry is growing at 14percent per annum. Ministry of Food Processing Industries, Government of India has formulated a vision 2015 to triple the size of the food processing industry from the current size of 70 billion USD to around 210 billion USD.
The government of India has taken up various measures to doubling the farmers’ income for their survivability. There is an urgent need to set up more and more agro-based industries so that farmers can get remunerative price for their produce. In the last ten years, a number of innovative food products have been introduced in the Indian market. Fruits and vegetables, milk and milk products, meat, poultry and fisheries products, packaged or convenience foods, alcoholic beverages and soft drinks, cereal grains are important sub-sectors. Health or Food Supplements, snack foods, organic foods are other rapidly growing segments. Hence, the entrepreneurs who are willing to startup in the field of food processing have ample opportunities, both for domestic and overseas markets.
Regulatory Compliance
As per section 31 of the Food Safety and Standards Act, 2006, no person shall commence or carry on any food business except under a license. As per section 63 of the FSS Act, 2006, if any food business operator himself or by any person on his behalf, manufactures, sells, stores or distributes or imports any item of food without license, shall be punishable with imprisonment for a term which may extend to six months and also with a fine which may extend to five lakh rupees. Hence, the entrepreneurs will have to obtain the license before starting a food business. Since the Startup company is typically a newly emerged business and deals with innovative food products or processes, these products are considered either as proprietary food or novel food. As per section 2.12.1 of the Food Safety and Standards Regulations (Food Products Standards and Food Additives), 2011, proprietary food means a food that has not been standardized under these regulations. Hence, all non-standardized food products come under the category of propriety food.
Regulations for Proprietary Food
Operationalisation of standards for proprietary food has been notified by the FSSAI on 13.01.2016. As per the notification, Proprietary food means an article of food that has not been standardized under these regulations but does not include any novel food, food for Special Dietary Use, Functional food, Nutraceutical, Health Supplements and such other articles of food which the Central Government may notify in this behalf. Proprietary food shall contain only those ingredients other than additives which are either standardized in these regulations or permitted for use in the preparation of other standardized food under these regulations. Proprietary food shall use only such additives as specified for the category to which the food belongs. Such category shall be clearly mentioned on the label along with its name, nature and composition.
Proprietary food product shall comply with the food additives provisions as prescribed in Appendix A and the microbiological specifications as prescribed in Appendix B of these regulations and all other regulations made under this act.
The Food Business Operator shall be fully responsible for the safety of proprietary food.
Regulations for Novel Food
If any of the ingredients or additives is not approved in any of these regulations, then the ingredient or the product will be considered as Novel food or Novel ingredient. A novel food is a food that may not have a history of human consumption or may have any ingredient used in it which or the source of which from which it is derived, may not have a history of human consumption or food or ingredient obtained by new technology with the innovative engineering process.
No Novel food shall be manufactured or imported for commercial purpose without the prior approval of the FSSAI by filing an application along with all relevant documents and detail as specified by the FSSAI.
Hence, the Startup entrepreneurs willing to manufacture or import Proprietary food will have to comply with the regulations of the proprietary food and obtain a license from the FSSAI before starting a business. For manufacturing or import of Novel food or Novel ingredient, they have to submit an application to the FSSAI in the prescribed format along with requisite fees. Once the Novel food or Novel ingredient is approved by the FSSAI, entrepreneurs will have to obtain the license from the FSSAI and then only they can start the business
One Nation One Food Law
Regulatory issues are a key area of concern for both investors and traders in a food business. To ensure transparency, consistency, and predictability of the business environment, the food regulatory ecosystem has to be based on the principle of one nation, one food law. Though the Food Safety and Standards Act, 2006 is applicable throughout the country, including Jammu and Kashmir, implementation across States and Union Territories remains fragmented.
The reason behind the fragmented implementation is largely due to legacy issues. Before 5th August 2011, we had eight different acts spread over various ministries and departments. Each state has its own individual structure was cobbled together under the new system, resulting in several legacy issues. There is a paradigm shift in policy in the FSS Act, moving from the prevention of adulteration to ensuring safe and wholesome food. The result has been a fragmented and weak system and structure in many states and UTs.
The objective of the FSSAI has been on ensuring consistency in enforcement of the act across the States and UTs. For this purpose, a single nationwide manual for food safety officers has been created. A nationwide systematic training program for regulatory staff has also been initiated.
For transparency, a digital inspection platform has been created for use by all states and UTs. This system is called the Food Safety Compliance through Regular Inspections and Sampling (FoSCoRIS). It can be used on handheld devices like mobile phones and tablets by food safety regulatory staff. Standard inspection checklist has been prepared. Food Safety Commissioner of the state can monitor inspection live.
Other major steps taken towards bringing One Nation One Food Law includes a nationwide integrated network, connecting all food testing labs notified by the FSSAI on a single technology platform through InFoLNet. This would ensure standardization and transparency in Food Testing.
FSSAI notified standards for a number of food products. There is a need that a user can access all information relating to product standards at a glance. For this purpose, the Indian Food Standards Quick Access (IFSQA) system has been created which collates and catalogues vertical and horizontal standards of food products.
While FSSAI is the principal regulatory authority for food, other organizations like Legal Metrology, Customs, Plant and Animal Quarantine, Bureau of Indian Standards and AGMARK are also involved for specific purposes. Food Regulatory Portal hosts important information and links to all the agencies.
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