A New Trade Era Dawns for India

By Ayyapasore Govindan

Long bound by traditions of self- sufficiency and isolationism, India now has incentive to cast off dated restrictions on imports of food products. The domestic production of consumer food products, while still small, has fueled demands for growth.

As new products and technologies emerge and multinational corporations discover the opportunities for investment in food processing here, market forces are exerting further pressure on government agencies to provide trade access.

New food processing industries need products that are scarce in India, as many raw, intermediate and consumer food products have been denied entry via import licensing and other non-tariff barriers.

An economic reform process, which began in 1991, produced the recently announced five-year trade policy (1997-2002), which fully or partially liberalizes imports of 150 food products. Among these were items of interest to U.S. exporters--raisins, a variety of fruit juices and processed wheat products (including cereals) and corn for feed use. Imports of soy isolates were also liberalized, and duties for wood were reduced.

The Indian government has been bypassing its World Trade Organization (WTO) market access commitments for agricultural products, claiming its balance of payments (BOP) situation exempts it from responsibility. While foreign exchange reserves were inadequate in the past, the recent $22 billion reserve is comfortable. Thus, India's trading partners are urging India to lift non-tariff barriers that have prevented imports of many food products.

Food Industry Laws Complex

U.S. exporters who have been anticipating liberalization will still have to grapple with India's varied and somewhat dated food sector laws.

Rules regarding food additives and colors, labeling requirements, packaging, weights and measures, phytosanitary regulations and other regulatory issues relating to production and distribution must be studied and followed.

The Indian government is updating portions of the food laws, and some significant revisions are expected. Only printed copies of the old regulations are available (for about $25) at most government book stores in India. One that caters to foreign importers:

Jain Book Agency
C-9, Connaught Place
New Delhi - 110 016
Tel.: (011-91-11) 651-0860
Fax: (011-91-11) 651-0860

Major Food Laws in Effect

Though there are other laws that govern food products, the following seven are the most important for importers. A copy of each law can be obtained from the contact listed.

• The Prevention of Food Adulteration Act (PFA), 1954, protects consumers against adulterated food and is comparable to the Federal Food, Drug and Cosmetic Act of the United States. PFA applies to domestic and imported food commodities, encompassing food color and preservatives, pesticide residues, packaging, labeling and regulation of sales.

PFA lacks standards for many imported foods. Companies can request amendments of the law, but the approval process is complex and lengthy. Contact:

Mrs. Debi Mukherjee
Assistant Director General
Directorate General of Health Services
Nirman Bhavan
Maulana Azad Road
New Delhi - 110 001
Phone: (011-91-11) 301-2290
Fax: (011-91-11) 301-7924

• The Standards of Weights and Measures Act, 1976, and The Standards of Weights and Measures (Packaged Commodities) Rules, 1977, regulate goods sold or distributed by weight, measure or number and their labeling. Contact:

Mr. P.A. Krishnamoorthy, Director
Directorate of Weights & Measures
Ministry of Food and Consumer Affairs
12-A, Jamnagar House
New Delhi - 110 011
Tel.: (011-91-11) 338-9489
Fax: (011-91-11) 338-5322

• The Essential Commodities Act, 1955, aimed at preventing hoarding, controls production, supply, distribution and trade in certain commodities including cereals, pulses, vegetable oils, cotton, various food items, soaps, oil meals and cotton. For more information, contact:

Mr. N. N. Mukherjee, Secretary
Department of Consumer Affairs
Ministry of Food and Consumer Affairs
Krishi Bhavan
New Delhi - 110 001
Tel.: (011-91-11) 338-4716
Fax: (011-91-11) 338-4716

• The Fruit Products Order, 1955, regulates production and distribution of all fruit and vegetable products, sweetened aerated waters, vinegar and synthetic syrups. Contact:

Mr. P. K. Bansal
Director (F&VP)
Ministry of Food Processing Industry
Panchsheel Bhawan
Khelgaon Marg
New Delhi - 110 049
Tel.: (011-91-11) 649-2087
Fax: (011-91-11) 649-3228

• The Milk and Milk Product Order, 1992, sets up an advisory board to advise the government on the production, sale, purchase and distribution of milk and milk products in the private sector. Contact:

Mr. Kawaljeet Singh
Deputy Secretary (DD)
Ministry of Animal Husbandry
Krishi Bhavan
New Delhi - 110 001
Tel.: (011-91-11) 338-8534
Fax: (011-91-11) 338-6674

• The Pulses, Edible Oilseeds and Edible Oils (Storage Control) Order, 1977, maintains supplies and equitable distribution and availability at fair prices of pulses, edible oilseeds and edible oils. Contact:

Mr. N. N. Mukherjee, Secretary
Department of Consumer Affairs
Ministry of Food and Consumer Affairs
Krishi Bhavan
New Delhi - 110 001
Tel.: (011-91-11) 338-4716
Fax: (011-91-11) 338-4716

• The Destructive Insects and Pests Act, 1914, and Plant Quarantine Rules and Plants, Fruits and Seeds (Regulation of Import into India) Order, 1989, prevent the introduction of exotic pests, diseases and weeds via imported products. Contact:

Dr. R. L. Rajak
Plant Protection Advisor
Ministry of Agriculture
Room No. 409
Shastri Bhavan
New Delhi - 110 001
Tel.: (011-91-11) 338-5026
Fax: (011-91-11) 338-4182

Dr. Radhey Shyam
Joint Director and Head Plant Quarantine Division
Plant Quarantine Station
ITI Airport - Terminal I
New Delhi
Tel.: (011-91-11) 329-5791
Fax: (011-91-11) 329-5445

Other laws that may have an effect on food and food processing:

• The Prevention of Black-Marketing and Maintenance of Supplies of Essential Commodities Act, 1980.
• The Monopolies and Restrictive Trade Practices Act, 1969.
• Consumer Protection Act, 1986.
• The Trade and Merchandise Marks Act, 1958.
• (The Indian) Standard Institution (Certification Marks) Act, 1952.
• The Agricultural Produce (Grading and Marketing) Act, 1937.
• The Environment (Protection) Act, 1986, and The Environment (Protection) Rules, 1986.

Although there are difficulties in understanding some parts of the regulations, several organizations may be able to provide advice:

Food Law Advocacy:

Mr. Vijay Sardana
Confederation of Indian Food Trade & Industry
Federation House
Tansen Marg
New Delhi - 110 001
Tel.: (011-91-11) 373-6305
Fax: (011-91-11) 332-0714

Contacts for Investors:

Sumit Saran
Agribusiness Information Center
Agricultural Commercialization and Enterprise Project
Federation House
Tansen Marg
New Delhi 110 001
Tel.: (011-91-11) 331-2129
Fax: (011-91-11) 311-2170
E-mail: aceindia@giasdlol.vsnl.net.in

Homepage:

http://www.milcom.com/ace/

Food Processing Regulations

Mr. Dalip Shenoy, Director
All India Food Preservers Association
206, Aurobindo Place
Hauz Khas
New Delhi - 110 016
Tel.: (011-91-11) 651-0860
Fax: (011-91-11) 462-6149

Food Industry Advocacy

Mr. Dalip Shenoy
Confederation of Indian Industry (CII)
23, 26 Institutional Area
Lodi Road
New Delhi - 110 003
Tel.: (011-91-11) 462-9994
Fax: (011-91-11) 462-6149
E-mail: indus%cii@sirnetd.ernet.in

Ayyapasore Govindan is an agricultural specialist with the FAS Office of Agricultural Affairs in New Delhi. Tel.: (011-91-11) 688-9033, ext. 2357; Fax: (011-91-11) 688-5608; E-mail: AgNewDelhi_PO@fas.usda.gov.

Last modified: Thursday, October 14, 2004 PM