India is one of the fastest growing markets in the world. One of the sectors where demand is increasing rapidly is food, and especially “exotic” foodstuffs. Consumer preferences have undeniably changed and the taste for different cuisines is growing. This in turn translates into more imported food products.

The Indian authority in charge of laying down science-based standards for food products and for regulating their manufacture, storage, distribution, sale and import is the Food Safety and Standards Authority of India (FSSAI). To identify easily which standards apply to which products, food products are categorized within a four-level hierarchy and assigned category within that hierarchy, known as the Food Category System (FCS).

When applying for import clearance, an importer has to provide Customs with the Indian Customs Nomenclature of Goods Code (ITC HS Code) for tariff calculation purposes on the one hand, and provide the FSSAI with the relevant FCS on the other. However, many importers and brokers are not well versed in the latter and are consequently prone to making mistakes.

As part of India’s efforts to facilitate cross-border trade, the FSSAI has mapped ITC HS Codes relating to food products with the corresponding FCS and related Food Safety and Standards Regulations. Although a single ITC HS Code may cover more than one kind of food product, it is now easier for overseas exporters and for importers to find the regulatory requirements applicable to the food products listed in the 1,515 ITC HS.

Moreover, the FSSAI online portal – the Food Import Clearance System (FICS) – has been integrated into the Department of Customs portal (ICE-GATE) to enable effective risk analysis for food products and seamless message exchange between the two entities. Coupled with the integration of the two IT systems, it is expected that mapping the FCS and ITC HS Codes will contribute to reducing consignment clearance times and to simultaneously strengthening compliance and import controls at points of entry.

Let us look at the way risk managed has been devised. The Food Safety and Standards (Import) Regulations, 2017 provide for selective sampling and testing of food products on the basis of risk profiles and parameters which are determined by the FSSAI and updated from time to time. In consultation with the FSSAI, Customs has developed algorithms based on these risk profiles and indicators and has integrated them into the ICE-GATE risk engine so as to screen import applications submitted through the Single Window Interface for Facilitating Trade (SWIFT). Risk indicators developed for each of the 1,515 ITCHS Codes for food products relate to the nature of the product, the compliance history of the importer or manufacturer, and the country of origin of the shipment.

If a consignment is flagged, the information is automatically transmitted for further examination to the FSSAI via the FICS. Documents relating to the shipment are then examined and the products may undergo visual inspection, sampling and testing in order to determine whether or not they are in conformity with the safety and quality standards established and laid down under various Food Safety and Standards Regulations. If a sample is found to be conforming then a No Objection Certificate (NOC) is generated. If it is found to be non-conforming, then Non-Conforming Report (NCR) is generated. The information is then sent to Customs for further action, as deemed fit.

When implemented, testing of samples will be carried out by one of the laboratories forming the Indian Food Laboratory Network (InFoLNet), whose IT system will be integrated into the FICS to allow for easy monitoring of the sample’s journey, from the location where the sample was taken to the laboratory which tested the sample and entered the test result.

The mapping of the Customs Nomenclature codes relating to food products with their corresponding Indian Food Safety and Standards Regulation and the introduction of dedicated risk criteria for those codes marks a milestone in establishing a robust food import control system in India.

Some of the advantages of this endeavour have already been mentioned: effective integration of various online platforms for import clearance, enhanced monitoring of the control procedure, improved ease of doing business for the private sector, and implementation of a robust risk management system.

However, the initiative also supports:

• increased transparency: the clearance process can be monitored, audit trails can be created with the click of a mouse and exception reporting can be produced with ease. Since the physical interface has been reduced and the parameters under which a product within a specific HS Code has to be tested are set automatically, the chances of error will be reduced;
• implementation of a jointly defined, clear and digestible data-driven strategy which will undoubtedly support efforts to enhance ease of doing business;
• data collection to improve processes and build capacity: useful reference data can be generated for each item submitted for control to improve risk analysis and other processes. Such data include sample sizes, sampling method, required laboratory testing, time taken for testing, and photographic images for evidence purposes. Captured data, communication templates, alerts, approvals and rejections along with necessary updates to the risk profile of the product, importer, etc. are also captured;
• better all-round communication: mapping of ITC HS Codes for imported food products with the FSSR has been carried out, with a view to highlighting all import requirements in a single and accessible reference data store. This will enable users and multiple government agencies to use this data effectively in a number of ways, thus ensuring consistency in policies to be implemented across the country regarding clearance of imported food products.

More information
https://www.cbic.gov.in