Strengthening Regulatory Governance In India: The Role Of Risk-Based Inspection Systems

Soham Dutta

Should every business be inspected in the same way?Imagine two food businesses operating under the same regulatory framework. One has maintained a strong compliance record for years. The other has repeatedly failed to meet safety requirements. Should a regulator devote the same amount of time and attention to both?

This simple question lies at the heart of risk-based inspection (RBI). Rather than treating every regulated entity as equally risky, RBI seeks to direct inspection resources towards activities and establishments where the likelihood and consequences of harm are greater. The objective is not simply to reduce the number of inspections. It is to make regulatory attention more proportionate to actual risk.

Looking at this approach in the context of India’s regulatory system reveals a more nuanced picture than a simple shift from ‘traditional’ to ‘risk-based’ inspection. India has already introduced important elements of risk-based and technology-enabled inspection. The more interesting policy question is what is required to make these systems trustworthy, effective and scalable.

India has already begun the shift

India is not starting from zero. The Department for Promotion of Industry and Internal Trade’s Business Reforms Action Plan 2022 included inspection reforms such as computerized risk assessment for selecting establishments, a Central Inspection System, online inspection scheduling and differentiation of inspection requirements according to high-, medium- and low-risk profiles. These measures show that risk-based inspection is already part of India’s broader regulatory reform agenda.

The Food Safety and Standards Authority of India (FSSAI) provides a more concrete example. Its Risk Based Inspection System uses an inspection priority score based on factors such as the theoretical risk associated with an establishment, product risk, production volume and compliance profile. The resulting risk grade is linked to inspection priority and frequency.

FSSAI’s March 2026 reforms show how this approach is evolving. The authority describes a computer-assisted risk-based inspection system that draws on compliance history, enforcement and surveillance information, self-compliance testing and third-party audits. The stated objective is to reduce repeated inspections of compliant food businesses while targeting repeat non-compliant businesses. In other words, the system attempts to make regulatory attention responsive to evidence rather than relying only on routine schedules.

These examples show that the policy challenge is no longer simply whether India should adopt risk-based inspection. It is how India can make risk-based inspection work consistently and fairly across different regulatory settings.

The real challenge is not the algorithm—it is governance

A digital risk score can make inspection planning faster, but it does not automatically make the underlying decision better. A risk assessment is only as reliable as the data, assumptions and criteria behind it.Incomplete information can produce inaccurate classifications. Different regulators may also use different definitions of risk, making coordination difficult.

Risk itself is not static. A business may have an excellent compliance record and still become higher-risk after changing its production process, introducing a new product, expanding operations or facing a new form of hazard. A risk-based system therefore needs regular review rather than treating a risk classification as permanent.

The OECD’s Regulatory Enforcement and Inspections Toolkit offers a useful framework here. It argues that inspection and enforcement should be evidence-based, risk-focused and proportionate. It also emphasises responsive regulation, coordination, transparent governance, information integration and clear and fair processes. Importantly, the OECD notes that risk criteria should be communicated to stakeholders so that regulatory discretion remains legitimate and understandable.

This makes RBI more than an administrative tool. It is a governance mechanism: it shapes how the state decides where to direct its limited enforcement capacity. That makes transparency and accountability just as important as technological capability.

An additional risk is assuming that a low-risk classification means a business can simply be left alone. Risk- based regulation should not become regulation by exception. A lower inspection frequency should reflect a reasoned assessment of risk, not regulatory neglect. There must also be ways to update classifications, review decisions and respond when new evidence or credible complaints emerge.

What should India focus on next?

The next stage of India’s regulatory reform should therefore focus on the institutions around risk-based inspection, not only the technology used to implement it.

First, regulators need reliable and current data. Second, the criteria and methodologies used to assess risk should be documented and periodically evaluated. Third, appropriate information-sharing between regulatory bodies can reduce duplication and give inspectors a fuller picture of risk. Fourth, digital systems should operate alongside human judgement, oversight and avenues for review. A risk score should inform regulatory decisions, not become an unquestionable decision in itself.

These priorities matter because inspection is ultimately about public trust. Businesses need to know that regulatory attention is being allocated fairly, while citizens need confidence that lower inspection frequency does not compromise safety, health or environmental protection.

India’s experience with FSSAI and its wider inspection reforms suggests that the foundations for this transition are already being built. The opportunity now is to strengthen them through better data, clearer risk methodologies, coordination and transparent governance.

From routine inspection to intelligent regulation
The most important lesson from examining risk-based inspection is that regulatory reform should not be judged simply by how many inspections are conducted. The better question is whether regulatory attention reaches the places where failure could cause the greatest harm.
Risk-based inspection can help India move towards that goal. Done well, it can reduce unnecessary burdens on businesses with strong compliance records while giving regulators greater capacity to focus on higher-risk activities. But its success will depend on more than digital tools.

It will depend on whether the systems behind those tools remain evidence-based, proportionate, transparent and accountable. The future of inspection in India should therefore not be about inspecting less. It should be about inspecting smarter—using evidence to decide where regulatory attention is most needed, while ensuring that the decisions guiding that attention remain open to scrutiny and review.

References

Department for Promotion of Industry and Internal Trade. (2022). Business Reforms Action Plan 2022:Implementation Guide for States/UTs. Government of India.

Food Safety and Standards Authority of India. (2021). Manual for Food Safety Officers: Risk Based Inspection System. Government of India.

Food Safety and Standards Authority of India. (2026, March 27). FAQs on Food Safety and Standards(Licensing and Registration of Food Businesses) Amendment Regulations, 2026. Government of India.

Organisation for Economic Co-operation and Development. (2018). OECD Regulatory Enforcement and Inspections Toolkit. OECD Publishing. https://doi.org/10.1787/9789264303959-en

Author –

Soham Dutta, an M.Tech graduate in Advanced Manufacturing & Design from IIT Jodhpur and a former Junior Research Fellow at IIT Roorkee. My experience spans research, project coordination, and industrial operations, with a strong interest in public policy, governance, and sustainable development. I am currently based in Dehradun, Uttarakhand, India. and is associated with IMPRI as a fellow in the Public Policy Youth Fellowship cohort.

Acknowledgement:

I would like to thank Vaibhav G. Sonone, Sulekh Patel, and Irfan Ahmed for sharing their experiences, and valuable feedback during the review of this article. Their insights helped enrich and strengthen the article.