Food safety enforcement must protect consumers, without breaking MSMEs
Food safety enforcement is essential to protect consumers, but a one-size-fits-all approach can burden India’s micro and small enterprises. The focus should be on stronger compliance, transparent enforcement and practical support for MSMEs.
- Sep 16, 2026,
- Updated Sep 16, 2026 5:14 PM IST
The recent wave of inspections by the Food Safety and Standards Authority of India (FSSAI) and State Food and Drug Administrations, including action across e-commerce and retail supply chains, has once again brought food safety into sharp public focus.
That scrutiny is necessary. Consumer safety is non-negotiable, and every enterprise engaged in manufacturing, storing, distributing or selling food must be accountable for the products reaching consumers.
But India must also ask an equally important question: What kind of enforcement system will actually produce better food safety across millions of businesses, particularly its micro and small enterprises?
For a large corporation, an inspection, temporary seizure or compliance notice may be an operational setback. For a micro or small enterprise, the same event can threaten working capital, reputation, market access and sometimes the survival of the business itself.
That does not mean MSMEs should receive lower food-safety standards. It means the regulatory system must be designed to produce higher compliance, rather than merely more enforcement.
The Missing Denominator
Consider a simple example. If inspectors examine thousands of products across warehouses, retail outlets or online fulfilment centres and identify a small number of non-compliant items, what should consumers be told? Only that products were seized, or should they also be told how many products were inspected, how many complied, what type of violations were found and what corrective action was required?
The distinction matters because a system in which a handful of products are non-compliant out of thousands inspected is fundamentally different from one in which violations are widespread. Yet public communication that highlights only failures can make both situations appear identical.
For instance, consider a hypothetical inspection in which 50,000 stock-keeping units are examined and 12 are found to have labelling discrepancies or other correctable issues. The significance of those 12 findings cannot be understood without knowing the total number inspected. The point is not to dismiss those 12 violations; each one warrants appropriate corrective action. But reporting the 12 without the 50,000 can create a very different public perception from reporting both.
This is not an argument for hiding non-compliance. Every unsafe product matters. Rather, it is an argument for contextualising enforcement so that consumers receive a complete and accurate picture of both the failures identified and the broader level of compliance observed.
The original purpose of regulation is not to produce alarming headlines. It is to improve outcomes. Consumers deserve to know both what failed and what worked.
For MSMEs, this distinction is particularly important because reputational damage can be disproportionately severe. A small food manufacturer, distributor or retailer may have spent years building customer confidence, yet one technical or isolated compliance failure can sometimes overwhelm the broader picture of its operations.
Transparency must therefore work both ways.
Regulators should disclose the number of establishments inspected, products examined, nature and severity of violations, corrective measures ordered and overall compliance observed. The enforcement effort itself also deserves greater visibility: how many officials were deployed, how many facilities were covered, how many products were examined and the overall scale of the inspection exercise. Such information would demonstrate the rigour of regulatory oversight while giving consumers a more complete picture of what the exercise actually found.
That would strengthen, not weaken, consumer confidence.
Not Every Violation Is the Same
There is also a need to distinguish between different categories of non-compliance.
Food adulteration, deliberate misrepresentation, unsafe ingredients or wilful disregard of hygiene standards require strong action.
But a regulatory framework should be capable of distinguishing these from correctable procedural, documentation, labelling or operational shortcomings.
For a micro enterprise, compliance itself can be complex. The entrepreneur is often simultaneously managing production, procurement, employees, finance, sales, GST, local licences and multiple regulatory requirements.
The solution cannot be to lower standards.
The solution must be to make compliance simpler, clearer and continuous.
Enforcement should therefore combine penalties for serious or deliberate violations with corrective directions, standardised compliance checklists, reasonable rectification opportunities and capacity-building for enterprises where the lapse is procedural and remediable.
The objective should be to move businesses from non-compliance to compliance as rapidly as possible.
From Inspection to Continuous Compliance
Inspections will always remain necessary. But inspections are, by definition, snapshots.
No regulatory agency can physically inspect every manufacturing unit, warehouse, distributor, retailer, restaurant and food business across India continuously.
That is especially important in an economy with an enormous number of micro and small enterprises operating across formal and informal supply chains.
India therefore needs to gradually move from an inspection-centric system to a compliance-assurance system.
Periodic self-declaration and compliance audits can become an important part of this architecture.
Businesses across the food supply chain could periodically report against clearly defined parameters including hygiene, storage conditions, temperature control where applicable, expiry management, labelling, supplier verification and traceability. Such periodic audits would bring the entire industry into a continuous compliance framework rather than limiting regulatory visibility to businesses that happen to be inspected.
The data generated could also help regulators identify recurring risks, high-risk categories and repeat non-compliance, allowing inspection resources to be directed where they are most needed.
Random inspections and independent verification must remain an integral part of such a system. Self-declaration cannot become a compliance formality. False declarations, concealment of violations or repeated negligent reporting should attract serious consequences, including enhanced scrutiny and appropriate penalties.
This would allow self-audits to function not as an alternative to enforcement, but as an additional layer of accountability between regulatory inspections.
But compliant businesses should not have to operate permanently under the fear that regulation arrives only in the form of a raid.
Technology can make this possible.
Digital checklists, electronic records, traceability systems and risk-based analytics can allow regulators to identify patterns and direct scarce inspection resources towards areas where risks are genuinely higher.
For MSMEs, however, technology-based compliance must remain affordable and simple. We should avoid creating another sophisticated compliance architecture that only large companies have the resources to navigate.
Responsibility Must Flow Down the Supply Chain
Perhaps the most important reform is to reconsider where responsibility for product-level compliance begins. It should begin at the top.
Brands and manufacturers are best placed to ensure that products entering the market satisfy required standards, including testing, labelling and traceability.
Accountability should then be proportionate to what each participant controls:
Distributors and warehouses: Storage conditions E-commerce and quick-commerce platforms: Seller verification and accurate listing data Small retailers: On-shelf hygiene, proper storage and expiry management
This top-down approach would reduce the need to repeatedly discover upstream problems at the retail end of the supply chain.
Help MSMEs Comply Before They Fail
For India's MSME sector, regulatory policy must increasingly adopt the principle of prevent, enable, detect and enforce.
This means:
Prevent violations through clear and practical rules Enable compliance through simple guidance, digital tools and handholding Detect risks through audits, data and targeted inspections Enforce strongly where businesses deliberately compromise consumer safety
This approach is particularly important for first-generation entrepreneurs and micro businesses entering the formal economy.
Regulation should make formalisation valuable, not frightening, by ensuring that an entrepreneur who registers, obtains licences and enters the organised marketplace also gains better access to information, standard operating procedures and compliance assistance.
If the only visible consequence of formalisation is greater exposure to punitive action, we risk creating precisely the wrong incentive.
Consumer Protection and MSME Growth Are Not Opposing Goals
The debate should therefore not be framed as regulators versus businesses.
Consumers need safe food, responsible businesses need consumer trust, regulators need credible compliance, and MSMEs need a system in which following the rules is practical, predictable and economically viable.
These interests are not competing objectives; they reinforce one another and are essential to building a food-safety ecosystem that works for both consumers and businesses.
India should therefore measure the success of its food-safety regime not simply by the number of inspections conducted, notices issued or products seized.
The more meaningful measure is whether compliance across the entire food ecosystem is improving.
That requires a shift:
From episodic enforcement towards continuous assurance through industry-wide audits From isolated headlines towards transparent reporting From equal treatment of unequal violations towards risk-based regulation From policing MSMEs after mistakes occur towards helping them build compliance into everyday operations
Robust enforcement must remain the backbone of consumer protection. But enforcement is at its most effective when businesses understand the standards, have the capacity to meet them and know that serious violations will be dealt with firmly while genuine compliance will also be recognised.
Food safety is too important to be reduced to a narrative of raids and seizures.
For a country of India’s scale and an economy powered by millions of micro and small businesses, the better ambition is compliance by design: an ecosystem in which regulators, manufacturers, platforms, distributors, retailers and MSMEs share responsibility for keeping consumers safe.
The goal should not be fewer inspections.
The goal should be fewer reasons to inspect in the first place.
The author is President of the India SME Forum and Managing Partner—India & Middle East at SDRC India Advisors, working with MSMEs on investment readiness, growth strategy and venture financing. Views expressed by the expert are his/her own.
The recent wave of inspections by the Food Safety and Standards Authority of India (FSSAI) and State Food and Drug Administrations, including action across e-commerce and retail supply chains, has once again brought food safety into sharp public focus.
That scrutiny is necessary. Consumer safety is non-negotiable, and every enterprise engaged in manufacturing, storing, distributing or selling food must be accountable for the products reaching consumers.
But India must also ask an equally important question: What kind of enforcement system will actually produce better food safety across millions of businesses, particularly its micro and small enterprises?
For a large corporation, an inspection, temporary seizure or compliance notice may be an operational setback. For a micro or small enterprise, the same event can threaten working capital, reputation, market access and sometimes the survival of the business itself.
That does not mean MSMEs should receive lower food-safety standards. It means the regulatory system must be designed to produce higher compliance, rather than merely more enforcement.
The Missing Denominator
Consider a simple example. If inspectors examine thousands of products across warehouses, retail outlets or online fulfilment centres and identify a small number of non-compliant items, what should consumers be told? Only that products were seized, or should they also be told how many products were inspected, how many complied, what type of violations were found and what corrective action was required?
The distinction matters because a system in which a handful of products are non-compliant out of thousands inspected is fundamentally different from one in which violations are widespread. Yet public communication that highlights only failures can make both situations appear identical.
For instance, consider a hypothetical inspection in which 50,000 stock-keeping units are examined and 12 are found to have labelling discrepancies or other correctable issues. The significance of those 12 findings cannot be understood without knowing the total number inspected. The point is not to dismiss those 12 violations; each one warrants appropriate corrective action. But reporting the 12 without the 50,000 can create a very different public perception from reporting both.
This is not an argument for hiding non-compliance. Every unsafe product matters. Rather, it is an argument for contextualising enforcement so that consumers receive a complete and accurate picture of both the failures identified and the broader level of compliance observed.
The original purpose of regulation is not to produce alarming headlines. It is to improve outcomes. Consumers deserve to know both what failed and what worked.
For MSMEs, this distinction is particularly important because reputational damage can be disproportionately severe. A small food manufacturer, distributor or retailer may have spent years building customer confidence, yet one technical or isolated compliance failure can sometimes overwhelm the broader picture of its operations.
Transparency must therefore work both ways.
Regulators should disclose the number of establishments inspected, products examined, nature and severity of violations, corrective measures ordered and overall compliance observed. The enforcement effort itself also deserves greater visibility: how many officials were deployed, how many facilities were covered, how many products were examined and the overall scale of the inspection exercise. Such information would demonstrate the rigour of regulatory oversight while giving consumers a more complete picture of what the exercise actually found.
That would strengthen, not weaken, consumer confidence.
Not Every Violation Is the Same
There is also a need to distinguish between different categories of non-compliance.
Food adulteration, deliberate misrepresentation, unsafe ingredients or wilful disregard of hygiene standards require strong action.
But a regulatory framework should be capable of distinguishing these from correctable procedural, documentation, labelling or operational shortcomings.
For a micro enterprise, compliance itself can be complex. The entrepreneur is often simultaneously managing production, procurement, employees, finance, sales, GST, local licences and multiple regulatory requirements.
The solution cannot be to lower standards.
The solution must be to make compliance simpler, clearer and continuous.
Enforcement should therefore combine penalties for serious or deliberate violations with corrective directions, standardised compliance checklists, reasonable rectification opportunities and capacity-building for enterprises where the lapse is procedural and remediable.
The objective should be to move businesses from non-compliance to compliance as rapidly as possible.
From Inspection to Continuous Compliance
Inspections will always remain necessary. But inspections are, by definition, snapshots.
No regulatory agency can physically inspect every manufacturing unit, warehouse, distributor, retailer, restaurant and food business across India continuously.
That is especially important in an economy with an enormous number of micro and small enterprises operating across formal and informal supply chains.
India therefore needs to gradually move from an inspection-centric system to a compliance-assurance system.
Periodic self-declaration and compliance audits can become an important part of this architecture.
Businesses across the food supply chain could periodically report against clearly defined parameters including hygiene, storage conditions, temperature control where applicable, expiry management, labelling, supplier verification and traceability. Such periodic audits would bring the entire industry into a continuous compliance framework rather than limiting regulatory visibility to businesses that happen to be inspected.
The data generated could also help regulators identify recurring risks, high-risk categories and repeat non-compliance, allowing inspection resources to be directed where they are most needed.
Random inspections and independent verification must remain an integral part of such a system. Self-declaration cannot become a compliance formality. False declarations, concealment of violations or repeated negligent reporting should attract serious consequences, including enhanced scrutiny and appropriate penalties.
This would allow self-audits to function not as an alternative to enforcement, but as an additional layer of accountability between regulatory inspections.
But compliant businesses should not have to operate permanently under the fear that regulation arrives only in the form of a raid.
Technology can make this possible.
Digital checklists, electronic records, traceability systems and risk-based analytics can allow regulators to identify patterns and direct scarce inspection resources towards areas where risks are genuinely higher.
For MSMEs, however, technology-based compliance must remain affordable and simple. We should avoid creating another sophisticated compliance architecture that only large companies have the resources to navigate.
Responsibility Must Flow Down the Supply Chain
Perhaps the most important reform is to reconsider where responsibility for product-level compliance begins. It should begin at the top.
Brands and manufacturers are best placed to ensure that products entering the market satisfy required standards, including testing, labelling and traceability.
Accountability should then be proportionate to what each participant controls:
Distributors and warehouses: Storage conditions E-commerce and quick-commerce platforms: Seller verification and accurate listing data Small retailers: On-shelf hygiene, proper storage and expiry management
This top-down approach would reduce the need to repeatedly discover upstream problems at the retail end of the supply chain.
Help MSMEs Comply Before They Fail
For India's MSME sector, regulatory policy must increasingly adopt the principle of prevent, enable, detect and enforce.
This means:
Prevent violations through clear and practical rules Enable compliance through simple guidance, digital tools and handholding Detect risks through audits, data and targeted inspections Enforce strongly where businesses deliberately compromise consumer safety
This approach is particularly important for first-generation entrepreneurs and micro businesses entering the formal economy.
Regulation should make formalisation valuable, not frightening, by ensuring that an entrepreneur who registers, obtains licences and enters the organised marketplace also gains better access to information, standard operating procedures and compliance assistance.
If the only visible consequence of formalisation is greater exposure to punitive action, we risk creating precisely the wrong incentive.
Consumer Protection and MSME Growth Are Not Opposing Goals
The debate should therefore not be framed as regulators versus businesses.
Consumers need safe food, responsible businesses need consumer trust, regulators need credible compliance, and MSMEs need a system in which following the rules is practical, predictable and economically viable.
These interests are not competing objectives; they reinforce one another and are essential to building a food-safety ecosystem that works for both consumers and businesses.
India should therefore measure the success of its food-safety regime not simply by the number of inspections conducted, notices issued or products seized.
The more meaningful measure is whether compliance across the entire food ecosystem is improving.
That requires a shift:
From episodic enforcement towards continuous assurance through industry-wide audits From isolated headlines towards transparent reporting From equal treatment of unequal violations towards risk-based regulation From policing MSMEs after mistakes occur towards helping them build compliance into everyday operations
Robust enforcement must remain the backbone of consumer protection. But enforcement is at its most effective when businesses understand the standards, have the capacity to meet them and know that serious violations will be dealt with firmly while genuine compliance will also be recognised.
Food safety is too important to be reduced to a narrative of raids and seizures.
For a country of India’s scale and an economy powered by millions of micro and small businesses, the better ambition is compliance by design: an ecosystem in which regulators, manufacturers, platforms, distributors, retailers and MSMEs share responsibility for keeping consumers safe.
The goal should not be fewer inspections.
The goal should be fewer reasons to inspect in the first place.
The author is President of the India SME Forum and Managing Partner—India & Middle East at SDRC India Advisors, working with MSMEs on investment readiness, growth strategy and venture financing. Views expressed by the expert are his/her own.