Food safety compliance is essential for every food processing business. Discover why investing in food safety systems, regulatory compliance, and quality assurance helps prevent costly recalls, legal penalties, brand damage, and consumer trust loss. Saleem A. Taqvi explains why the cost of failure far outweighs the investment in compliance.
Food safety risk and compliance
India’s food processing industry is crucial for generating employment, reducing post-harvest losses, adding value to agricultural products, and contributing to national economic growth. However, the industry also faces ongoing challenges, including food safety concerns and complex supply chains. These issues can significantly impact operational performance, market access, consumer trust, and long-term profitability.
According to the Annual Survey of Industries 2022-23, the food processing sector employs approximately 1.93 lakh people in the organised sector, representing 12.41% of organised manufacturing employment. When the unorganised segment is included, the industry supports nearly 46.8 lakh workers, taking total employment to around 66.1 lakh people.
The sector remains a key contributor to the Indian economy. During 2023-24, food processing accounted for 7.93% of Manufacturing Gross Value Added (GVA), while contributing 1.30% to India’s GDP in 2022-23. Valued at approximately USD 336.4 billion and ranked among the world’s largest food processing industries, the sector contributes significantly to the broader agriculture and food value chain.
Despite significant progress, food safety remains one of the industry’s most critical challenges. Foodborne illnesses continue to affect both developed and developing nations, but the frequency and scale of such incidents in India raise serious public health and economic concerns. Foodborne diseases are the fifth leading contributor to disease burden in India. In October 2020, the Government of India informed Parliament that the country experiences an estimated 100 million foodborne illness cases each year, resulting in economic losses of around USD 15 billion.
While the Food Safety and Standards Authority of India (FSSAI) continues to strengthen regulatory oversight and enforcement, ensuring food safety cannot be the regulator’s responsibility alone. Food business operators must actively implement strong quality assurance systems and adhere to regulatory requirements across all stages of their operations, including procurement, processing, storage, distribution, and retail. This challenge is especially significant among small and unlicensed processors, many of whom operate outside the formal regulatory framework.
Export Rejections and Their Economic Impact
Food export rejections continue to be a major concern for India, particularly for products such as basmati rice, seafood, spices, fruits, and vegetables. Although some improvement has been observed, rejection levels remain significant.
Between 2024 and 2026, European Union authorities issued 365 border rejection notifications involving Indian food products due to pesticide residues, heavy metals, and other contamination concerns. More than 450 products were affected during this period, including around 50 cases linked to pathogens such as Salmonella, Aflatoxin B1, and Ochratoxin A. In 2025 alone, the Rapid Alert System for Food and Feed (RASFF) recorded 279 notifications involving Indian spices and herbs.
Similarly, the United States Food and Drug Administration (US FDA) reported approximately 2,687 line-item refusals of Indian-origin food products between January 2024 and April 2025, primarily due to pesticide residues, hygiene deficiencies, and certification gaps. During Oct 2024–Sept. 2025, the US FDA refused 4,089 India-origin shipments, exceeding the 3,648 refusals recorded during the entire FY24 period.
These figures show a significant rise in rejection rates compared to previous years. These incidents not only lead to direct financial losses but also harm the reputation of Indian products in global markets.
The True Cost of Quality Failure in Food Industry
A common assumption is that large, organised food processors consistently maintain the highest quality standards. While many do, instances involving multinational companies demonstrate that quality failures can occur at any scale. The consequences are often severe and extend far beyond the immediate cost of product recalls or corrective actions.
The cost of quality failure includes rework, reprocessing, rejected consignments, product recalls, loss of business opportunities, reputational damage, and reduced consumer confidence. Additional consequences may include regulatory penalties, suspension or cancellation of licenses, legal proceedings, and, in extreme cases, imprisonment.
However, the broader societal costs are even more significant. Food safety failures can result in illness, hospitalisation, loss of productivity, and, tragically, loss of life. No financial calculation can adequately measure the human impact of contaminated or unsafe food products. Internationally, such failures can also damage a country’s reputation, affect trade relationships, and weaken confidence in its food safety systems.
Regulatory Response and Growing Consumer Vigilance
India’s food regulator has intensified its monitoring of consumer complaints circulating on social media, issuing notices to several major food brands and food business operators over allegations ranging from contamination to hygiene lapses.
The Food Safety and Standards Authority of India (FSSAI) has issued notices to Nestlé India, KFC, Flipkart, and food brand Open Secret in connection with three separate complaints that gained traction online.
One notice relates to allegations that insects or larvae were found in a packet of Maggi noodles. FSSAI has sought a detailed Action Taken Report (ATR) from Nestlé, including batch-level quality records, vendor details, corrective actions taken to remove affected products from the supply chain, and measures to prevent recurrence.
However, Nestlé rejected the allegations, stating that the claims are based on an unverified account and that comprehensive quality records, test reports, and supporting documentation have already been submitted to the authorities.
In a separate case, FSSAI issued a notice to a KFC outlet at MVR Mall in Eluru, Andhra Pradesh, following allegations of unhygienic operating conditions.
The regulator has requested details on hygiene, sanitation, food handling, storage, waste management, pest control, and employee hygiene, along with evidence of corrective and preventive measures. KFC operator Devyani International said it will investigate the allegations and submit its response to the regulator. Sapphire Foods clarified that the outlet is operated by Devyani.
The third notice concerns allegations that Open Secret’s “Un-junked Dates” product, delivered through Flipkart Minutes, contained insects. FSSAI has requested internal quality-control records, details of product withdrawal actions, and measures to prevent similar incidents.
Importantly, these notices do not establish wrongdoing.
Rather, they form part of a fact-finding process intended to verify claims and assess compliance. Nevertheless, they demonstrate the increasing influence of consumer feedback and the regulator’s willingness to respond rapidly to potential food safety concerns.
Food Safety Challenges Across the Value Chain
Although food safety standards have improved considerably over the years, incidents involving contamination, food poisoning, and quality failures continue to occur. These issues originate from primary raw materials, ingredients, water quality, storage conditions, transportation practices, and inadequate handling procedures.
Many foodborne illnesses reported in India are linked to pathogenic microorganisms such as Staphylococcus aureus, Bacillus cereus, Escherichia coli, Salmonella, and Vibrio parahaemolyticus. Effective control of these hazards requires a comprehensive farm-to-fork approach supported by Good Manufacturing Practices (GMP), Hazard Analysis and Critical Control Point (HACCP) systems, sanitation controls, traceability mechanisms, and continuous employee training.
Conclusion: Value of Food Safety Compliance
The overall cost of non-compliance and poor-quality practices far exceeds the investment required to establish and maintain effective food safety systems. Beyond financial losses, food safety failure incidents affect public health, undermine consumer trust, disrupt trade, and tarnish the reputation of both individual companies and the industry as a whole.
As India’s food processing sector continues to grow, food safety should not be seen just as a regulatory obligation but as a strategic business strategy. Sustainable growth, market access, consumer confidence, and international competitiveness all depend on the industry’s ability to deliver safe, high-quality products consistently. In an increasingly competitive marketplace, food safety is no longer just a regulatory expectation – it is a business differentiator.
The aurther serves as the editor of ‘Processed Food Industry’ monthly B2B Magazine, New Delhi.
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