Eternal, Swiggy shares in focus as FSSAI to tighten grip on $80-bn online market

Shares of Eternal Ltd and Swiggy are in focus as food safety regulator Food Safety and Standards Authority of India (FSSAI) is preparing stricter compliance requirements for quick-commerce and online grocery platforms, including Blinkit, Swiggy Instamart and Amazon Now. This forms part of the nationwide campaign against unsafe food practices.

The regulator is turning its attention to e-commerce platforms as part of a broader effort to improve accountability across the country’s food supply chain, CEO of FSSAI Rajit Punhani told Bloomberg. 

“We are trying to tighten and make them accountable,” Punhani said, indicating that online platforms could face more stringent obligations over the food products sold through their services.

Under the proposed measures, platforms may be required to display manufacturing dates, expiry dates and batch numbers on online product listings. The regulator also intends to hold platforms accountable for misleading claims made by manufacturers about their products.

The proposed framework could extend to dark kitchens and dark stores, which play a crucial role in the quick-commerce business model, said the Bloomberg report. FSSAI is considering requirements for dark kitchens to display photographs and addresses, alongside tighter inspections of dark stores to verify that food products are stored under appropriate conditions, particularly frozen items.

Blinkit, Instamart and Amazon under lens 

Over recent months, FSSAI has intensified inspections, investigations triggered partly by consumer complaints and enforcement action against businesses suspected of violating food safety requirements.

Eternal-owned Blinkit, Swiggy Instamart, Walmart-owned Flipkart and Amazon’s Indian operations have all faced regulatory scrutiny over alleged violations. These have included misbranding, the sale of prohibited products and licensing irregularities.

The proposed rules could have significant implications for India’s online retail industry, estimated at $80 billion. According to Redseer Strategy Consultants, groceries account for as much as 51% of online retail sales, making food safety compliance particularly important for digital commerce platforms.

Following an FSSAI investigation, Swiggy said in July that it was reviewing the product listings flagged by the regulator and engaging with the authorities to resolve the issues.

Amazon, meanwhile, said it operates as an online marketplace where independent third-party sellers list and sell products. A company spokesperson said Amazon removes products that do not comply with its requirements.

“We confirm that the said product is no longer available on our marketplace,” the spokesperson said in response to a query last week.

Dark Stores and Food Storage Practices 

The proposed regulatory changes could place greater responsibility on quick-commerce platforms for monitoring product information and storage conditions across their networks.

Dark stores, which serve as local fulfilment centres for rapid deliveries, have become central to the quick-commerce model. Ensuring that perishable and frozen products are stored at appropriate temperatures is therefore an important area of regulatory oversight.

Mandatory disclosure of manufacturing and expiry dates, along with batch details, could also help consumers make better-informed purchasing decisions and improve traceability when food safety concerns arise.

The potential requirements would add to the compliance responsibilities of platforms that rely on extensive networks of warehouses, fulfilment centres and third-party sellers.

FSSAI Crackdown extends beyond e-commerce

The regulator’s enforcement drive is not limited to online grocery businesses. FSSAI has also stepped up scrutiny of food manufacturers, hotels and restaurants over advertising practices, product claims, infant-product marketing, labelling requirements and food storage standards.

Companies such as Nestlé India, PepsiCo and Dabur India, along with hospitality operators including JW Marriott, have faced regulatory action over alleged violations.

The wider campaign reflects the regulator’s growing focus on compliance across the food industry, from manufacturing and marketing to storage and last-mile delivery.

For quick-commerce platforms, the proposed changes could mean stricter product-listing standards, closer monitoring of sellers and greater accountability for food safety across their delivery networks. The final impact will depend on the specific requirements introduced by FSSAI and how they are implemented.