‘Red alerts’ likely on unhealthy food on ecommerce sites; Indian govt, RBI to discuss lending app ban

By Kevin Colleran On Feb 8, 2023

Last week, we reported that to help consumers make informed choices, India’s food safety regulator, FSSAI, is in talks with companies to include a “cautionary warning” on the amount of added salt, sugar and fat in the front labelling of packaged foods, alongside the proposed star rating system. Now, the FSSAI may also ask ecommerce and quick service platforms to put a label or a health rating on the food packet sold on their platforms.

Also in this letter:
■ Govt, RBI to hold talks over ban on loan apps
■ MCA may start accepting physical company filings
■ Indian startup fired 6,000 employees in Oct-Dec 2022: report

Exclusive: Ecommerce firms may soon start displaying ‘red alerts’ on unhealthy food

FSSAI TO ENFORCE HEALTH RATING ECOMMERCE

India’s food safety regulator FSSAI (Food Safety and Standards Authority of India) is mulling making it mandatory for ecommerce and quick service platforms to put a label or a health rating on the food packet sold on their platforms.

How will it work? Health groups and NGOs had appealed to the food regulator to have ecommerce platforms display these proposed labels prominently. Now, ET has learnt that the regulator is looking to enforce them. One of the sources said that this label, which could be either rating or coloured labels (red being super unhealthy), could be placed next to the MRP.

Packaged food players not happy:

The packaged food industry has not been very keen on bringing about these changes. The matter has been stuck in consultation for over seven years now. Global food industry executives have pointed out that online grocery portals, especially quick commerce ones, are fast-growing sales channels for them. “Any additional declarations on e-commerce platforms, over and above what is already mentioned on the packs, will be a deterrent to consumption,” a senior executive from a packaged food company said on the condition of anonymity.

Ban on quick-loan apps: IT, Home ministries and RBI to decide on steps

Several Indian fintech and lending apps associations are expected to meet Meity officials over a ban on fintech apps

The ministries of Home Affairs and Information Technology, along with the Reserve Bank of India, are expected to conduct talks over the coming few days to decide next steps over banning of online loan apps and portals.

ET was the first to report on Monday that the government order banning 94 lending apps on Sunday also included apps of Indian firms.

A busy day: Panic-stricken founders of digital lending platforms met officials of the Ministry of Electronics & Information Technology (MeitY) in New Delhi on Tuesday – a day after internet service providers started taking down websites of online lending companies.

In one-on-one meetings between the impacted fintech apps and the ministries concerned, representatives from lending firms sought clarifications on why the blocking order was issued.

Why the ban? A source in the government said that the ban was on account of three broad categorisations – first, the list of apps include those that may have ultimate or partial ownership with Chinese entities; second, apps providing loans which are not regulated by the RBI and which may be storing data in Chinese servers, and lastly, apps being run by companies against which customer complaints of recovery harassment have been made.

What next? Over the next few days, the RBI is expected to share additional views with the ministries on the lending apps, which are regulated by the banking regulator. The authorities could seek additional documentation from companies with regard to this.

Tech glitches with MCA portal: Govt may start accepting physical filings

After more than two weeks of technical glitches faced with the Ministry of Corporate Affairs’ MCA21 portal, the government is likely to begin accepting certain filings in a physical manner.

The action: As part of its plan to revamp the MCA21 portal, the corporate affairs ministry transitioned 56 regulatory forms to the third version (V3) of the portal. Of these, 10 forms were launched on the new portal on January 9, while the remaining 46 were transitioned on January 23.

The reaction: After the launch of 46 forms on January 23, users and companies trying to make regulatory filings to reflect developments in their entities could not do so because of technical errors with the portal.

Sticky point: One of the forms that companies were unable to submit was the PAS-3, which is to be filed at the time of allotment of shares to any investor. If this particular form is not filed with the MCA, companies – both listed and unlisted – are unable to access the funds raised. The PAS-3 form was transitioned to V3 on January 23. Companies reported not being able to finance their daily expenses on account of failure to file this submission.

What changed? Kochi-based Muthoot Finance, on its inability to file the form, submitted a writ petition in the Kerala High Court seeking interim relief by the way of the court directing MCA to allow submission of physical forms. In an interim order dated February 3, the High Court directed the ministry to accept forms in both physical and electronic modes.

Tweet of the day

About 6,000 Indian startup employees laid off in Oct-Dec 2022: report

Startups in India fired about 6,000 employees in October-December 2022 and another 4,000 or so in January 2023 alone as investors tightened their purse strings amid volatility in the global economy, according to a CIEL HR Services study.

Quote, unquote: “With 2 lakh people employed in the startups in India, layoffs in December to January have been about 2%,” Aditya Mishra, CEO, CIEL HR Services, told ET.

Also read | Layoffs in 2023: Zoom, Dell among latest firms to cut jobs amid economic turmoil

Startups ‘didn’t apply brakes’: Anshuman Das, cofounder, Careernet, said startups and ecommerce firms that were on a hiring binge in the second half of 2022 and didn’t apply the necessary brakes are mostly firing people.

Layoffs in recent months range from 3-18%, he said, adding, “Under 5% layoffs is a much-needed clean-up activity with mostly bad hires or wrong hiring decisions.”

ET Ecommerce Index

We’ve launched three indices – ET Ecommerce, ET Ecommerce Profitable, and ET Ecommerce Non-Profitable – to track the performance of recently listed tech firms. Here’s how they’ve fared so far.

Vedanta will play lead in Foxconn JV with 63% stake

There is no change in the shareholding structure of the joint venture between Vedanta Group and Foxconn Technologies for the manufacture of semiconductors and display units in India, a senior Vedanta group executive told us.

Number game: The oil-to-metals group will continue to hold 63%, while Foxconn will own 37%, Akarsh Hebbar, global managing director of display and semiconductor business, said in an exclusive interview.

Hebbar’s statement comes amid indications that the government is in favour of the Vedanta Group taking on the role of a ‘junior partner’ in the JV with Foxconn.

Background: We reported on February 4 that though Vedanta will continue to remain a partner in the JV, “it will not be the lead partner,” as it has no prior experience in semiconductor chip manufacturing.

“The government is okay with Vedanta being a junior partner, but not an operating partner, in the venture,” a senior government official had told ET.

We has also reported previously that the Vedanta-Foxconn JV had tied up with European chipmaker STMicroelectronics as the technology partner for the proposed semiconductor chip manufacturing unit in India. While refusing to confirm or deny the tie-up with STM, Hebbar said that the JV was in talks with various technology partners who can provide the “feasibility for the nodes”.