On gleaming buffet lines and crowded dining tables, the white cubes of paneer soaking in rich tomato and spinach gravies often hide a secret: Many of them have never seen the inside of a dairy. Now, the apex food regulator has decided to shut down these pretend paneers engineered from vegetable oil and milk solids, protecting the nutritional integrity of a staple that serves as a key protein source for hundreds of millions of Indians.
A top regulatory committee has decided that India, the world's largest dairy producer, does not really need so-called analogue paneers that are high in fat and low in nutrition, according to two officials and a document seen by Mint. The regulator now plans to ban analogue paneers outright, and phase out manufacturing by those who hold licences to manufacture them.
The Central Advisory Committee (CAC) of the Food Safety and Standards Authority of India (FSSAI) finalized the proposal in October 2025, and a decision that was formally adopted and confirmed on 2 March 2026, chaired by FSSAI chief executive officer (CEO) Rajit Punhani. If the proposal reaches the final stage, it could spell the end of a large market for these cheap, high-fat, low-nutritional-value non-standardized dairy analogues.
Awareness issues
“A decision on selecting analogue or paneer cannot be left to the discretion of the consumer, considering the awareness level,” according to the document seen by Mint. “Hence, it is suggested that the restriction may be made regarding the manufacturing and selling of any dairy analogue products, whose standards have not been specified by the food authority.”
Queries emailed to the health and family welfare ministry and FSSAI remained unanswered.
While dairy paneer from Amul or Mother Dairy typically retails for around ₹460 per kg, unbranded, loose paneer—sometimes analogue—is sold for as little as ₹250-300 per kg. While the large branded companies produce paneer from milk, roughly 90% of the paneer sold in India is in the price-sensitive "loose" market. Authorities worry that unscrupulous vendors may purchase analogue paneer in bulk and sell it as genuine paneer in the "loose" market, something ordinary buyers cannot differentiate, as it mimics the look, feel, and taste of the real thing.
Interestingly, India's food safety rules permit dairy analogues, but set no standards for them. Now, the effort is to remove the category itself, instead of setting standards that are hard to enforce.
No more pretend paneer
“No new dairy analogue products which are non-standardized and nutritionally not benefitting, like analogue of paneer, shall be permitted except the standardized products like frozen dessert, processed cheese, mixed fat spread etc. No new standards on analogue to be made by FSSAI especially on analogue of paneer. Similar products shall also not be permitted under 'proprietary food'. Existing FBOs (food business operators) who hold license/registration certificates to be given sufficient time to remove those products,” the committee recommended for the states and Union territories to adopt.
The plan involves a transition period for around 1,000 current licence holders to remove these analogue products from the market.
The proposed action is a "progressive step", said Jayatheertha Chary, managing director of Mother Dairy, India's second-largest dairy producer. "As one of India’s leading dairy brands, we believe this move will set a strong precedent for the industry and further strengthen trust in the country’s dairy ecosystem. In a market where paneer is widely relied upon as a key source of protein, it is essential that it delivers the expected nutritional value and is not substituted with imitations that can mislead consumers,” Chary said.
Others concurred. “The big question is why fake or duplicate products made with palmolein oil are legally allowed to use dairy names like cheese or paneer. It's like allowing gold-polished brass or aluminium jewellery to use the BIS hallmark logo,” said R.S. Sodhi, former managing director of Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF), which markets its products under the Amul brand, and ex-president of the Indian Dairy Association.
“While a definition for analogue paneer exists to facilitate the export market wherein low-income nations often rely on Indian validation, we are moving toward prohibiting these analogues. Analogue paneer, often marketed and presented as 'dairy paneer’, is frequently used in weddings and restaurants to cut costs by replacing milk fat with cheaper vegetable fats like palm oil or any other vegetable oil,” said the first of the two government officials cited earlier, both of whom spoke on the condition of anonymity.
Solution?
The official said FSSAI is leaning on two scientific markers to detect fake paneer: fatty acid profiling and the beta-sitosterol test. Beta-sitosterol is a plant sterol occurring naturally in vegetable oils but is virtually non-existent in pure milk fat, where it rarely exceeds 5 parts per million (ppm). The FSSAI has set a strict threshold of 7 ppm. Anything above that is a red flag, proving that the product has been padded with vegetable oil.
The document went on to add that non-dairy counterparts, including tofu, soybean, coconut milk/cream, among others, are already standardized and available in the market, which can be consumed by the lactose-intolerant population. These legitimate non-dairy products are explicitly distinguished from prohibited analogues. Also, products such as frozen desserts and mixed fat spreads, which allow partial substitution of milk fat with vegetable fat, are standardized and available across the market.
“Such products, which often substitute milk fat with vegetable oils, do not offer the nutritional integrity of genuine dairy products and can mislead consumers. The Indian Dairy Association has consistently advocated for clear standards and proper labelling to protect both consumers and the interests of millions of dairy farmers. This initiative will strengthen trust in authentic dairy products, uphold quality benchmarks, and support the long-term sustainability of India’s dairy ecosystem,” said Sudhir Kumar Singh, president, Indian Dairy Association (IDA).
Clarity
The FSSAI decision brings much-needed clarity and reinforces the idea that food products must be marketed for what they truly are, without ambiguity, said Shashi Kumar, founder and CEO of Akshayakalpa Organic, a Bengaluru-based organic dairy company. "This move is a significant step toward protecting consumers, especially in a category like paneer, which is a staple in Indian households and an important source of nutrition. This decision is also a seminal moment for the food industry at large. It goes beyond one product category and presents an opportunity for the industry to collectively raise benchmarks” he said.
According to Dr Rajeev Jayadevan, a public health expert and former president at Indian Medical Association, (Cochin), paneer is a good source for protein, especially for vegetarians, but unfortunately, customers may not understand the difference with analogue paneer. "Consuming such products do not give the benefits that the customer expects. Long-term consumption is unhealthy not only because of the fats but also the emulsifiers that can disrupt healthy gut bacteria,” he said.
Vijay C Roy contributed to this story.