The regulatory burden on the food processing sector has increased significantly over the last decade due to stronger food safety oversight, tighter packaging and labelling requirements, higher traceability expectations, environmental regulations, and greater consumer protection standards, according to Rishi Agrawal, CEO and Co-founder of Teamlease Regtech.
He told businessline that while the Government has attempted to simplify execution through digitisation initiatives such as FoSCoS (Food Safety Compliance System) and through labour law consolidation under the new labour codes, the overall compliance intensity and regulatory depth have continued to rise.
A report titled ‘Decoding compliance management for the food processing industry’ by Teamlease Regtech, said the sector is governed by a regulatory ecosystem that is both extensive and deeply layered. Food processing businesses operate within a multi-jurisdictional framework spanning central, state and local authorities, covering domains such as food safety, labour, environment, taxation, and corporate governance.
Compounding effect
It said that a typical mid-sized multi-state food processing enterprise is subject to more than 3,285 unique compliance obligations, which translates into a much larger number when multiple filing frequencies are considered.
In addition, businesses are required to secure more than 30 regulatory approvals across different stages of operations, each involving separate processes, documentation and regulatory interfaces.
The breadth of compliance extends across every layer of operation from sourcing and manufacturing to distribution and market facing activities, while its depth is reflected in the frequency of filings, inspections, record-keeping and reporting obligations. This creates a compounding effect as businesses scale across geographies, product lines and supply chains, significantly increasing regulatory exposure.
Compliance challenges
The report highlighted issues such as overlapping regulatory jurisdictions; inconsistent state-level enforcements; regulatory uncertainty and frequent amendments; infrastructure gaps; environment, health and safety compliance; and the gap between domestic and foreign standards as some of the compliance challenges for the food processing sector.
A major challenge for food businesses is that the rules change depending on the context. Food compliance is a moving target based on several variables, it said.
Recommendations
The report said that simplification, harmonisation, and digitisation of compliance frameworks will be critical to unlocking the sector’s full potential.
Agrawal said though India’s digital compliance infrastructure has improved over the last decade, much of it remains portal-driven and fragmented, creating isolated digital silos that do not communicate with each other.
Most regulatory portals continue to be designed for human interaction rather than system-to-system communication, with limited API-based information exchange between regulators, departments and enterprises. As a result, businesses are repeatedly required to submit the same information, documents and certificates across multiple portals and authorities despite the information already existing within government systems.
He said the next phase of reform should, therefore, focus on simplification through integration. India needs a unified and interoperable compliance architecture where businesses can submit information once and securely share authenticated data across regulators through consent-based digital frameworks.
Regulatory systems should increasingly move towards API-led governance, machine-readable filings, reusable digital identities, and integrated enterprise compliance records rather than repetitive document uploads.
Greater use of Digital Public Infrastructure principles, seamless data exchange, EntityLocker for enterprises, trusted registries, and eventually a unified enterprise identifier that can work across regulators can significantly reduce duplication, paperwork, and compliance friction, he said.
There is also a need for greater harmonisation across states, standardisation of forms and data requirements, wider adoption of risk-based and technology-enabled inspections, and stronger interoperability between government systems.
He said that compliance timelines, approval workflows, and regulatory interpretations should become more predictable and transparent. Procedural and technical violations should increasingly move towards financial penalties instead of criminal consequences.
The broader objective should be to build a compliance ecosystem that is predictable, machine-readable, technology-driven, and easier to operationalise at scale without diluting regulatory standards or public interest safeguards.
Global food processing leaders focus heavily on integrated digital regulation, risk-based supervision, and traceability-led governance. Mature regulatory ecosystems typically follow a ‘file once, use many times’ approach where information submitted by businesses is securely shared across regulators, instead of being repeatedly requested through separate filings, inspections, and documentation requirements, Agrawal said.