How do regulatory gaps in food labelling affect consumer rights and the dairy sector?

FSSAI, established under Section 4 of the Food Safety and Standards Act, 2006 [5], sets labelling standards. Its September 2026 draft amendment restricting products sold as "paneer" but made of constituents not derived from milk [1] shows how labelling gaps simultaneously erode consumer rights and squeeze genuine dairy producers.

The gaps themselves

• A CAG performance audit (2017) found that even a decade after the Act, FSSAI had not framed regulations on food labelling standards and on accreditation of food testing laboratories; states lacking separate food safety departments saw misleading labelling and adulteration [3].
• Dairy analogues consequently travelled under dairy names, forcing FSSAI to issue a public notice that cheese analogue sold as "paneer" is a grave violation [2], and now a draft clause under Regulation 2.1.1 [1].
• Codex Alimentarius CXS 206-1999 already required substitutes for milk products to be named for their true nature and barred dairy terms [4] — India is acting late on a settled principle.

Effect on consumer rights

• The buyer's right to information and informed choice fails: the stated harm is being misled about nature and composition [1].
• Much analogue paneer is sold loose — at sweet-shop counters or inside restaurant curries — where no packet exists, so a labelling-only rule protects the packet buyer alone.
• Redress is weak because proof needs a laboratory to separate milk fat from vegetable fat, yet lab accreditation regulations were unframed and staffing acutely short [3].

Effect on the dairy sector

• Cheaper look-alikes undercut genuine paneer, hurting dairy farmers and cooperatives.
• Mislabelling spreads distrust across the whole dairy category, damaging honest brands.
• Yet analogues legitimately serve price-sensitive buyers; the mischief is deception, not the product — as Codex recognises by regulating the name, not banning the good [4].

Truthful labelling is therefore both a consumer-protection and a producer-protection instrument. The way forward is Codex-aligned naming reserving "paneer" for milk, accredited state laboratories and a food-business database before enforcement begins, and extending disclosure to menu cards — aligning India's food law with the consumer's right to know under the Consumer Protection Act, 2019.