FSSAI Tightens Rules on Digital Dairy E-Commerce

The recent notification issued by the Food Safety and Standards Authority of India on compliance obligations for e-commerce food business operators under the Open Network for Digital Commerce (ONDC) model is a timely and much-needed intervention for the dairy sector. Effective from 1st April 2026, this order goes beyond a routine clarification—it attempts to correct structural gaps that have already started surfacing in India’s fast-evolving digital food commerce ecosystem.

Under the ONDC framework, a single consumer transaction may involve multiple entities—buyer apps, seller apps, and logistics partners—unlike the earlier marketplace model where accountability largely rested with one platform. This fragmentation had created a regulatory grey area, especially in high-risk categories like dairy. With this notification, FSSAI has clearly demarcated responsibilities: the seller app is responsible for accuracy of product information, claims, licensing and compliance; the buyer app is responsible for displaying that information transparently to consumers; and the delivery entity is accountable for maintaining food safety during last-mile handling. This clarity is a significant step forward, as it removes the long-standing ambiguity where platforms often distanced themselves as mere intermediaries.

The importance of this move becomes evident when seen against recent enforcement trends. Over the past few years, multiple instances of spurious and misleading dairy products—particularly in the ghee category—have been flagged across e-commerce platforms. Products marketed as “desi ghee”, “bilona”, “A2” or “Gir cow ghee” were found in several cases to be either non-compliant, falsely labelled, or suspected to be blended with vegetable fats. Many such brands operated without proper FSSAI licensing or displayed incomplete and misleading information. These products were often sold at prices that were commercially unviable for genuine ghee, raising serious concerns about authenticity. The absence of clearly defined platform-level accountability allowed such listings to proliferate.

Similarly, inspections carried out by state food authorities in cities like Delhi, Mumbai and Bengaluru have revealed the presence of unlicensed dairy vendors on quick commerce and e-commerce platforms. Products such as paneer, khoa and curd were found being sold without proper FSSAI registration, without traceability of the manufacturer, and in some cases without even basic compliance such as license numbers on invoices. These are not isolated incidents but indicative of systemic gaps in how digital food supply chains have been governed so far.

Another critical issue has been the sale of near-expiry dairy products through discount-driven channels. There have been multiple instances where milk, curd and paneer with very low residual shelf life were pushed aggressively through online platforms to liquidate inventory. The new requirement mandating that products must have at least 30% shelf life remaining or 45 days before expiry at the time of delivery directly addresses this concern. For a category like dairy, where freshness is intrinsically linked to safety and consumer trust, this provision is particularly significant.

The notification also mandates that a clear and legible image of the principal display panel of pre-packaged food must be made available to consumers before purchase. This is a critical step in tackling misleading claims and fake branding. In the dairy context, where terms like “pure”, “farm fresh”, “no preservative” and “traditional bilona” are frequently misused, the requirement of transparent label visibility empowers consumers to make informed decisions and allows regulators to enforce accountability.

Further, the requirement of end-to-end traceability through mandatory display of FSSAI license or registration numbers—by the seller app, reflected on the buyer app, and captured in the invoice—brings a much-needed compliance backbone to digital transactions. This is especially important in dairy, where source credibility is directly linked to product integrity. The provision for immediate delisting of non-compliant products, along with explicit liability on the seller app for misleading claims and images, indicates a clear shift from reactive enforcement to proactive compliance design.

However, while the intent is strong, implementation will pose challenges. The decentralized nature of ONDC means compliance responsibilities are distributed across multiple entities, increasing the risk of gaps in coordination. Small and regional dairy players, especially those operating in categories like ghee and paneer, may struggle with digital compliance requirements such as proper documentation, label standardization and system integration. Ensuring real-time delisting of non-compliant products across a dynamic and high-SKU environment will also be operationally demanding. Additionally, holding last-mile delivery partners accountable for maintaining cold chain integrity introduces a new layer of legal and operational responsibility that many platforms are not yet fully prepared for.

From an industry perspective, this notification marks a clear transition. FSSAI is moving away from a platform-neutral stance to one of defined accountability, and from post-violation action to preventive compliance architecture. For organized and compliant dairy players, this presents an opportunity to build stronger consumer trust in digital channels through transparency and adherence to standards. For non-compliant operators, particularly those relying on misleading claims or weak regulatory oversight, the space is likely to shrink rapidly.

In essence, this is not just a regulatory update—it is the beginning of a much-needed clean-up of the digital dairy marketplace, where trust, traceability and compliance will increasingly define competitiveness.

Source : Review note written by Kuldeep Sharma Chief editor Dairynews7x7

Download the notification here :  Notification on role of FBO on E commerce and related platforms like ONDC

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