India’s legal metrology regime needs a reset

The Legal Metrology Act, 2009 (LM act), and the Legal Metrology (Packaged Commodities) Rules, 2011 (LMPC rules), were introduced to ensure that there will be standardization, fair trade practices and consumer protection. However, over time, this regulatory regime has become complex imposing significant compliance costs on enterprises, particularly small and medium businesses and startups.

Ameet Datta

In particular, the LMPC rules, when combined with various parallel sectoral labelling regulations, create a complex and often confusing web of requirements that are difficult to follow and comply. This provides opportunities to legal metrology inspectors to issue show cause notices, particularly for minor and technical infringements. This situation is further exacerbated by the multiplicity of notices issued by various state legal metrology departments. Often, these notices are issued because inspectors are not aware of the amendments that are made to the LMPC rules from time to time. The frequency with which amendments are introduced also forces manufacturers to change entire labels, disrupting the whole supply chain.

To comply with the LM act and the LMPC rules, manufacturers, importers and packers are often left with little choice but to respond to show cause notices issued by state legal metrology departments. They then try to justify the manner in which they have made mandatory declarations. In many instances, such explanations are deemed unsatisfactory. This leaves businesses with no practical option but to compound the alleged violations.

Jasman Dhanoa

Pursuing the alternative, which is to challenge such notices in court, not only disrupts operations and delays product launches, but also places an unnecessary burden on the judicial system. This process undermines the ease of doing business, and imposes additional financial strains on manufacturers, importers and packers. They are faced with the choice of paying compounding fees, which is often taken as an admission of guilt, or of incurring disproportionate litigation costs. This necessitates adopting a standardized approach to labelling and also training of inspectors regarding the legal requirements. Further exacerbating the problems caused by the current legal metrology regime is the criminalization of offences such as selling non-standard packages.

Such transgressions are punishable with a term of imprisonment of up to one year and/or a fine. This is so, even when the nature of these offences is minor, has no significant negative consequences and involves no malicious intent. This was also recognized by the government when it initiated its decriminalization exercise in 2020. Criminalizing minor offences negatively affects the ease of doing business in India and is a deterrent to attracting investment. The LM act should be amended to decriminalize such offences that are minor or technical in nature and do not negatively affect general public safety, health and interest.

Rishikaa

As an alternative, the LM act could also be amended to introduce the solution of improvement notices as is already the case under the Food Safety and Standards Act, 2006, was drafted. Under this mechanism, the concerned officer issues a notice to the non-compliant entity. This document highlights the transgression, the necessary corrective measures and the time allowed for compliance. Implementing such a mechanism will allow entities to take corrective measures without having to face the threat of criminal action being taken against them.

At this stage, India’s legal metrology regime is becoming a source of regulatory overreach and inefficiency. A reset of this system is not only warranted but is long overdue. An overhaul will boost the ease of doing business, aligning it with the government’s active desire to simplify such systems to attract investment. It is crucial to strengthen India’s position as a leading global manufacturing and trading hub. Such a transformation of the legal metrology regime should decriminalize minor breaches and introduce the procedures of improvement notices. Any regulatory changes should only be implemented after an extensive prior consultation process.

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