Where is India’s crackdown on food safety headed?

Akshara (0:04)

In today's episode, we'll do one deep dive and cover another story for the day. First, we'll talk about where India's crackdown on food safety is headed. And then we'll talk about Yes Bank's 2020 problem being back.

Welcome back to The Daily Brief by Zeerudha, where we cut through the noise to help you understand what's actually happening in the most important stories from business and markets. I'm your host Akshara. Today is Monday, 19th August. Before we begin, our latest subtext episode is with Kunal Mangal, a former development economist and now AI engineer who deeply researched the true cost of government job exams in India. We go into why so many people sit multiple attempts at the UPSC or other state exams, how you design such an exam, and what all this says about India's unemployment, skill development and state capacity. The link to the episode is in the description. Coming to the first story.

If there's anything moving faster than today's LLM improvements, it's Fssai crackdowns. Almost every few days, there's a restaurant facing action, a product's labeling being questioned, or a license being suspended by India's central food safety regulator.

And this is happening across cities like Mumbai, Bengaluru and Delhi, and that too inside establishments that have somehow run for decades before and have made a name among locals. But why did all this happen all so suddenly? Is the regulator more active? Are states enforcing the rules harder? Or is enforcement simply more visible? This story is us trying to make sense of it all.

Now it was only a few months ago when Fssai made a major overhaul to its rulebook. And in March, we covered how Fssai changed the duration of its licenses to have perpetual validity instead of temporary. And that also meant that inspectors have much less power in demanding bribes to renew said license, and it also relaxes the threshold of basic, state and central registration, making it cheaper for smaller businesses to meet compliance requirements. But one of the things that we couldn't cover in that story was that nine days before the amendment, there was a meeting between the Fssai and the state level commissioners of food safety. And there, Rajat Poonhani, the CEO of Fssai, called for more stringent enforcement, and in it, he emphasized on the need for risk-based inspections.

So in the same rule change, risk-based inspections were formalized into the Fssai rules. And they're supposed to be different from routine inspections, which didn't really have any criteria behind them. But in the new framework, investigation would depend on the type of food business, past compliance history, third-party audit results, and the risk category of food products involved. And the stated objective is to reduce repeated inspections of compliant businesses while targeting repeat non-compliant ones.

And this was only made easier by the fact that license renewal was no longer a lever of power anyone could pull. These were generally the mandate of state inspectors, not central ones. And 98% of food business operators fall under state licenses, which meant that states spent a disproportionate amount of time on paperwork around renewals instead of enforcement. And that made it all the more prone to bribes to fast-track things. Additionally, the raising of the revenue threshold for licenses is expected to do the same thing. So now, lakhs of small businesses no longer need free inspection from state officers. Now, as we have talked about before, states have always been hemmed in terms of their capacity to conduct such enforcements, be it inspectors or labs to check quality. But these moves would vastly free up space for them. And that, it seems, may have made a lot of difference in some states. For instance, Telangana went through a whole restructuring of its entire enforcement apparatus, and then in September, the new body inspected 16 quick commerce dark stores across Hyderabad and suspended licenses for four dark stores which belonged to Swiggy, Instamart, Flipkart and Zepto. 12 of 16 stores drew some form of action. In August, the Food and Drug Administration or FDA Commissioner of Karnataka issued two formal advisories tightening food safety requirements for hotels, dhabas and food service establishments, giving them 15 days to rectify deficiencies before re-inspection. And the state formed 30 special teams for surprise inspections at star hotels, roadside eateries and e-commerce warehouses. And nowhere has the system been pushed harder than in Maharashtra. In May 2026, IAS officer Dukkha Ram Munde took charge as Commissioner of the state's FDA. And within days, the enforcement intensity changed. Between May 25th and July 31st, the Maharashtra FDA inspected 3,137 food establishments, seized food products worth Rs. 55.72 crore, and suspended 116 licenses. By August, the count had crossed 3,000 rates. Domino's, Pizza Hut, the Cricket Club of India, Parsi Dairy Farm, JW Marriott, no name was too big. And as per Fssai, regulators carried out about 7 lakh inspections between April and September 2026, which was nearly twice as many in the same period in 2025