How to Setup an Online Food Delivery Marketplace

Narendra Kumar

15 Jan, 2021

E-commerce food platforms are booming in the country today. All of a sudden, consumers have started relying on online food delivery marketplace to order food. The FSSAI has made it mandatory for the e-commerce food platforms to obtain food license for the entire supply chain to ensure that safe food reaches the customers.

Alongside, the delivery of the food also needs to be done by trained staff so that food safety is ensured.

For an online food delivery marketplace in India, the following registrations are compulsory to get the business going:-

1. Register the business as a Sole Proprietor Firm, Partnership Firm, Limited Liability Partnership, One Person Company or Private Limited Company.
2. GST registration is mandatory for all e-commerce platforms.
3. Signing of Memorandum of Understanding or an agreement with each seller/manufacturer that ‘the said sellers/brand owners/manufacturers are compliant with the FSSAI Act and its rules and regulations’ with the Food license number clearly mentioned in the MOU.
4. Vendors Agreement with each supplier on the terms of trade and other applicable terms and conditions
5. Draft a Privacy Policy to prevent being penalized under section 43A of the Information Technology Act, 2000.
6. Drafting of Website Terms and Conditions to restrict liability of the e-commerce website
7. Draft User Agreement and Data Security Agreement
8. Lastly, obtain the food license– As per new guidelines issued by FSSAI in 2017 all e-commerce platforms dealing in delivery of food, defined as e-commerce Food Business Operators (FBOs) have been covered under schedule-1 of the Food Safety and Standards Regulations, 2011^[1].
9. It is mandatory for all e-FBOs to get the central license from the Central Licensing Authority for their entire supply chain that includes the head office of the e-FBO, the manufacturers, transporters, storage and distribution units. In case any food business operator does not have the FSSAI license, online delivery platforms need to debar them immediately.

FSSAI License – Non-compliance with FSSAI rules and guidelines can lead to payment of fines, imprisonment and even cancellation of licenses. When the e-commerce platform receives a customer complaint regarding the quality of food, the online food delivery marketplace needs to immediately inform the concerned owner/manufacturer.

The owner/manufacturer needs to take immediate steps to resolve the issue. In the event that there is recall of any food item or a food item has been found to be non-compliant, the e-FBO needs to immediately take out that particular food product from its list on their online platform.

The e-commerce food business operators can apply online to get their license. The online marketplace has to first register on the system and then log in to complete the application process within 30 days of online registration.

The license fee for a new license is about Rs. 7500 per year. The central license can be obtained by the e-commerce FBO for a period ranging from one year to five years. Before the current license expires, however, the e-FBO needs to reapply for renewing the license.

We are here to help you with the legal and mandatory registrations for your business. Whether it is Company Registration or GST or obtaining the food license, our dedicated and prompt services will help you on time.

Read our article:How to Setup Home-Based Bakery Business in India