The Maharashtra Food and Drugs Administration has filed a petition in the Bombay High Court challenging a 2023 FSSAI directive that prevents state inspectors from auditing centrally licensed food businesses. Scheduled for a hearing on November 26, the case could impact the operational compliance framework for major FMCG and food chains that currently operate under central licenses.
The Maharashtra Food and Drugs Administration has initiated a legal challenge against the Food Safety and Standards Authority of India (FSSAI) in the Bombay High Court. The state regulator is contesting a 2023 circular that restricts state-level inspectors from performing enforcement activities on establishments that hold a central food safety license. This legal battle targets the current administrative division of labor between state and central authorities, which has been in place under the Food Safety and Standards Act of 2006.
At the heart of the dispute is the FSSAI's digital platform, the Food Safety Compliance System (FoSCoS). The state regulator alleges that this platform encourages companies to opt for central licensing, which effectively places them outside the reach of state inspection teams. Maharashtra’s FDA argues that the central regulator has created a parallel hierarchy that undermines the role of local authorities, who are traditionally responsible for routine inspections, licensing of manufacturing sites, and local enforcement of safety standards.
For investors, the outcome of this case carries significant implications for the broader food and beverage sector. Most large-scale food companies, restaurant chains, and FMCG manufacturers operate across multiple states and typically maintain a central license for their operations. If the court rules in favor of the state, these businesses could face a return to dual oversight, where they might have to answer to both central and state regulators. This could lead to increased compliance complexity, a higher frequency of audits, and potential differences in regulatory interpretation between state and central bodies.
Currently, companies with central licenses generally deal with a more streamlined regulatory process overseen by the FSSAI. A shift toward state-led enforcement could introduce operational friction if state inspectors differ from central guidelines or requirements. The legal uncertainty also raises questions about whether existing processes under the FoSCoS system will need to be restructured to accommodate state-level intervention.
The Bombay High Court is scheduled to hear the matter on November 26. Investors and industry participants will likely track the proceedings for any interim directions from the court that could impact how food businesses manage their regulatory compliance in Maharashtra and potentially other states if this case sets a wider legal precedent. The primary monitorable will be whether the judiciary decides to maintain the existing central control or restores a more decentralized enforcement model that empowers state authorities to conduct independent checks.