Why mislabelling persists in India’s packaged food sector

Despite repeated updates from the Food Safety and Standards Authority of India (FSSAI), mislabelling of products continues to plague India’s packaged food and beverages sector.

FSSAI data shows that nearly half of all penalties issued in the food sector are linked to mislabelling.

The issue has once again come to the fore with the recent ban on use of term “ORS” on hydration drinks that do not satisfy the official Oral Rehydration Salts formulation. The issue points to regulatory grey areas, gaps in compliance systems and marketing practices that often lead to misleading labels.

What goes wrong?

FSSAI has a defined standard for ORS, which specifies composition of electrolytes, osmolarity and the ratio of carbohydrates and salts that companies must meet to use the term. Products that do not satisfy these criteria fall under the general hydration or electrolyte drink categories, and can’t be marketed as ORS.

However, companies continue to use the “ORS” labels on the packaging or in advertisements, which according to FSSAI is a misleading claim. But why do brands do it? Could this be a regulatory misunderstanding? Are there any grey areas in regulations that account for such slip-ups?

Where do most companies slip?

According to Dr Rashida Vapiwala, founder of food labelling compliance platform LabelBlind, companies commonly slip in marketing claims.

She says the regulatory system is a mix of FSSAI rules, the Consumer Protection Act and the Advertising Standards Council of India’s guidelines. Together, these outline 16–17 categories of claims, such as nutrient, quantitative, equivalent and “non-addition of”. Each category carries numerical criteria and many brands either overlook these details, or interpret them loosely to strengthen the positioning of their product.

However, she adds that interpretation challenges arise not because the rules are vague, but because of how regulatory or marketing teams read these norms. “Rules are generally clear. But brands often look at regulations through a lens of their specific category or business goals, which creates space for misapplication,” she adds.

Grey areas mostly in exports

Dr Vapiwala says most grey areas emerge in exports. International markets such as the US, UK, European Union (EU) and Gulf countries have older and more-detailed regulatory systems.

She explains that the differences in allergen declarations, naming conventions, colour and additive disclosures, nutrition formats, mandatory nutrients and warning statements create confusion for Indian companies entering these markets. “Many mislabelling cases involve products rejected at ports abroad,” she adds.

In the domestic market, the issues are linked more to marketing claims than the product’s composition.

FSSAI has increased its scrutiny of claims in recent years.

Dr Vapiwala says FSSAI has restricted use of terms such as ORS and “100%”, and has launched consumer reporting channels and discussions on front-of-pack labeling. Changes in the nutraceutical regulations and updates in product standards are also underway.

Frequent revisions make it tough for MSMEs

“These frequent revisions require companies to update packaging, which many start-ups struggle to do at scale,” she says.

“Large companies have formal systems and teams dedicated to compliance, but they handle thousands of labels and frequent product refreshes. Small and medium enterprises face deeper challenges,” she adds.

For Micro, Small and Medium Enterprises (MSMEs), which contribute 30% of India’s GDP and 45% of exports, mislabelling can result in port rejections, recalls and customs interventions in foreign markets. The solution is in digitisation of compliance, Dr Vapiwala suggests. Mislabelling carries risks for both domestic and export-focused businesses.

Recent spice controversy points to wider problems

As evidenced by the recent controversy in the spice sector, the mislabelling problem is not limited to hydration drinks.

In 2024, two renowned spice brands, MDH and Everest, faced global scrutiny after spices exported to some countries were found to contain “unacceptable” levels of Ethylene oxide (ETO), a pesticide considered a carcinogenic when residues persist.

Regulators in Hong Kong and Singapore had suspended or recalled affected spice blends at the time.

Following those alerts, FSSAI ordered nationwide testing of spices and asked states to collect samples from various spice brands. Subsequent tests found that nearly 12% of spice samples failed to meet safety or quality standards.

FSSAI also cancelled manufacturing licences of 111 producers in the sector as their products did not meet the quality criteria.