Food, the most basic need of living, has also become a profitable business. Because people no longer have time to cook as a result of their busy schedules, packaged food is becoming increasingly popular. One may decide to start a packaged food business in India by focusing on the target market and expertise. In today’s market, there are numerous food options. It’s up to you to decide which one to package and sell. To make a sensible choice, one must carefully check the food packaging business concept.
Here are some steps below that are important to start food business packaging in India:
- Select business structure: The type of business structure chosen will be decided by the nature of the company. It is essential to manage and conduct a firm as a sole proprietorship or one-person business. Other options include limited liability partnerships, which allow multiple people to share their funds. When the size of the operation is large, the company form of business is the best option. The registration process will differ depending on the type of business structure. Each structure has its registration process. For Company incorporation number of documents are needed. After incorporation, other permits and registrations must be obtained to begin activities.
- Location of packaging unit: Because many of the inputs required in the packing units are easily spoilt, the location is important. The packing unit should be situated such that inputs may be received without compromising the quality of the product. The sale of packaged products on the market is also important. The packaging unit should be located in a way that is compatible with both the procurement of raw materials and the selling of packaged items.
- Create a business plan: The management and operational plans for the business should be included in the business plan. This will benefit in the planning of future development ideas and the efficient use of funds. This should include a company cost-benefit analysis, market trends, and a business summary.
- Bank Current Account: A current bank account is required to conduct business at the moment of incorporation. All tax returns are filed using a current bank account linked to the business.
- FSSAI registration: The Food Safety and Standards Act of 2006 requires a food license to conduct business in the areas of food production, manufacturing, processing, distribution, sale, import, export, and stocking. Dairy farms, meat processing plants, and hotels all have their own set of laws and restrictions. At the time of applying for registration, multiple declarations and resolutions should be filed. Major registrations under FSSAI include:
- Basic Registration: This registration is required for all small businesses and startups with an annual turnover of INR 12 lakh or more. The basic registration can be upgraded to a state license if sales improve.
- State FSSAI license: The state license is open to mid-sized businesses with yearly revenues of INR 12 to 20 crores.
- Central FSSAI license: Central licenses are normally available to large firms with annual turnover over INR 20 crores. This is also required for the import and export of food products, as well as the delivery of goods and services to government agencies.
- Other approvals:
- NOC from the municipal body: Repackers and re-labelers must have a No Objection Certificate and a copy of their license.
- GST registration: To operate legally, any business must do GST registration. Depending on the registration requirements, returns must be filed monthly, quarterly, or annually.
- Small-scale Industry registration: The Ministry of Micro, Small and Medium Enterprises (MSME) is in charge of registration. The registration of Micro, Small, and Medium Enterprises (MSME) gives these businesses validity. All minor and ancillary units having plant and machinery valued at less than INR 10 million should apply for registration with the respective State Government’s Director of Industries. The major goal of this registration is to keep track of such units’ statistics and to offer various benefits and assistance programs to them. As a result, state governments will be responsible for promoting and developing these businesses.
- Trademark registration: This is necessary to preserve brands and slogans that are specific to a company or individual. It can be gained regardless of the company’s structure. A registered owner of the Trademark can only create, establish, and protect the goodwill of goods and services. It’s essential in preventing violations.
- Hiring and training employee: FSSAI also conducts a food-handling training program for its employees. All individuals working in the food industry, as well as those who want to be, must learn about food handling through the supply chain, retail, and food preparation. After satisfactory completion of the training program, FSSAI issues certificates.
- Equipment: The sort of food packaging machinery and kitchen equipment required will differ depending on the specific of food being packaged. The expense of obtaining these machines and equipment might be quite high at times. The government offers several programs to assist with the acquisition of these items. MUDRA loans, for example, may assist small enterprises in obtaining financing for the purchase of machinery and equipment.
- Public Health Department inspection: The Ministry of Health and Family Welfare, Government of India, is in charge of the FSSAI. It has developed science-based standards for food items. The packaging of the items has been given top priority, ensuring that they are safe for human consumption. Regular inspections are carried out to ensure that the food business operator follows the FSSAI’s rules and regulations. Licenses may be revoked if an examination reveals a failure to comply. In addition, there are penalties and prison sentences that are imposed based on the ignorance of the business operator.
- Small business association: Such organizations assist entrepreneurs by providing financial and technical support. Associations ensure that the company’s operations are not harmed by intensely competitive market.
Do you have the confidence and motivation to start a food business in India?
MeraLegal will assist you in obtaining all appropriate food licenses and registrations to begin your business; please click on the following link to contact one of our consultants.