India's Food Export Rejections in the United States

• 26 Oct 2023

For Prelims: India’s Major Food Exports to US, Salmonella, World Trade Organization, Sanitary and Phytosanitary (SPS) Agreement, Food Safety and Standards Authority of India , Codex Alimentarius

For Mains: Major Provisions of SPS Agreement, Measures to Improve Food Safety and Quality Standards in India, Agricultural Marketing.

Source: IE

Why in News?

The United States Food and Drug Administration (FDA) has recently disclosed data on food imports over the past four years. Among the nations engaged in food exports to the US, India, Mexico, and China have experienced the highest incidence of refusals.

• The data highlights the hurdles faced by Indian food exporters in the American market. High refusal rates continue to be a pressing issue.

What are the Key Aspects Related to India's Food Export Rejections in the United States?

• Refusal Statistics: India, Mexico, and China:
  • Between October 2019 and September 2023, India, Mexico, and China experienced significant refusals of food export shipments to America.
  • India's refusal rate, which measures the percentage of shipments refused out of all food export shipments, was 0.15%.
    • In comparison, China's refusal rate was 0.022%, and Mexico's was 0.025%.
    • India's rate is substantially higher, signaling a higher incidence of refusal relative to the total exports.
• Majors Factors Behind Refusals:
  • The products consisted in whole or in part of a filthy, putrid, or decomposed substance or be otherwise unfit for food.
  • The products contained Salmonella, a bacteria that causes severe stomach infections.
  • The products used an unapproved new drug, an unsafe food additive, or a prohibited substance.
  • The products were misbranded in terms of nutritional labels, ingredients information, or health claims.
• Long-Term Trends in India's Refusals:
  • In the last decade, India's food export refusals have seen a downward trend in absolute terms. From a peak of 1,591 refusals in 2015, it decreased to 1,033 refusals in 2023.
    • Despite these refusals, India's food exports to the US stood at USD 1.45 billion in FY23, representing a 16% increase from the previous fiscal year. Key exports included basmati rice, natural honey, guar gum, and cereal preparations etc.

What is the International Measure Backing the Food Import Refusal By the United States?

• About:
  • The World Trade Organization (WTO)'s Sanitary and Phytosanitary (SPS) Agreement ensures that traded products between WTO members do not spread pests and diseases, and that food products do not contain harmful substances or pathogens.
  • The "SPS Agreement" entered into force with the establishment of the WTO on 1 January 1995.
    • WTO has 164 member nations (including India and the United States).
• Major Provisions:
  • Members have the right to implement sanitary and phytosanitary measures for the protection of human, animal, or plant life and health, provided such measures align with this Agreement.
  • Measures should be based on scientific principles and supported by scientific evidence, except as provided in Article 5(7) of the Agreement.
  • Measures should also not discriminate unfairly between Members and should not serve as a disguised restriction on international trade.
  • Members must accept equivalent sanitary and phytosanitary measures from other Members, even if they differ.
    • The exporting Member must prove that its measures meet the importing Member's required level of protection.
    • Access for inspection and testing should be provided upon request.

What are the Impacts of Frequent Food Export Rejections on India?

• Increased Regulatory Compliance Costs: Continuous refusals result in escalated compliance costs for Indian exporters. To meet the stringent standards of the US market, investments to fit with compliance measures become essential, adding financial strain.
• Trade Loss and Market Reputation: Rejected shipments impact revenue and diminish trust among foreign buyers, potentially reducing future trade opportunities.
  • Sectors contributing to major exports could be disproportionately affected, impacting the livelihoods of farmers and businesses reliant on these exports.
• Diplomatic and Global Image Consequences: Repeated refusals can strain India-US trade relations. Constant rejection may lead to discussions on trade barriers, potentially creating diplomatic tensions between the two nations.
  • Continuous refusals might negatively impact India's global image as a reliable food exporter, affecting not only the US market but also influencing perceptions in other international markets.

How India can Improve its Food Safety and Quality Standards?

• Strict Inspection and Quality Control: Strengthening the role and capacity of the Food Safety and Standards Authority of India (FSSAI), the apex food regulator in the country, to monitor, inspect, and certify food products for domestic and export markets.
• Enhanced Testing Protocols: Developing and enforcing comprehensive testing protocols for food products to identify contaminants, pathogens, and adulterants.
  • Investing in advanced laboratory equipment for more accurate and rapid testing.
• Supply Chain Transparency: Utilizing blockchain technology to create transparent and traceable supply chains, enabling rapid identification of the source of contamination or quality issues.
• Global Standards Adherence: Adopting international best practices and standards for food safety and quality management, such as Hazard Analysis and Critical Control Points (HACCP), Good Hygienic Practices (GHP), and Codex Alimentarius.