Tighter FSSAI and FDA Regulations Drive ₹1,200-Crore Market Opportunity for AI-Led FMCG Fraud Detection

Tighter regulatory checks by the Food Safety and Standards Authority of India (FSSAI) and State FDAs, along with rising fraud risks across expanding supply chains, are accelerating AI adoption among major Indian fast-moving consumer goods (FMCG) companies.

FMCG majors including Hindustan Unilever, ITC, Nestle India, Tata Consumer Products, Dabur, and Marico have indicated a wider use of AI and digital tools across procurement, manufacturing, quality control, sales, and supplier monitoring in their latest annual reports. While these companies do not separately disclose their spending on AI-led fraud detection or third-party risk management, technology investments are visibly increasing. Nestle India integrates technology directly into supplier-compliance and third-party risk processes, while Dabur and Marico explicitly note higher technology investments.

A survey by Deloitte India highlights this broader enterprise trend, showing that 94 percent of Indian enterprises expect AI expenditure to increase, 68 percent prioritize security, compliance, and governance, and 48 percent have deployed AI at scale in supply-chain operations.

As FMCG and quick-commerce networks expand, the volume of vendors, distributors, warehouses, merchants, and workers that companies must monitor has grown significantly. Retail and commerce companies such as Tesco, Walmart, and Swiggy, alongside FMCG manufacturers, are utilizing verification technology across three primary risk points: verifying genuine vendors and distributors, screening workers entering warehouses and delivery networks, and monitoring FSSAI, food-safety, and statutory compliance across operational sites.

Ajay Trehan, founder and CEO of verification technology firm AuthBridge, noted that some large FMCG clients manage close to 50,000 third parties, many of which were onboarded years ago without systematic re-verification. According to Trehan, fast-growing sectors naturally attract higher volumes of fraud.

AuthBridge's checks have identified tangible vulnerabilities across the ecosystem. Approximately 9.8 percent of examined cases involved expired or forged FSSAI licences, while cross-verification uncovered mismatches between GST and FSSAI records, cancelled GST registrations, incorrect certificates, and input-tax-credit trails involving non-existent vendors. Additionally, screening of gig workers across warehousing and delivery networks revealed that 3–4 percent had criminal records.

Companies are deploying different AI solutions to address these distinct risks. Know Your Business systems analyze statutory information for vendors and distributors, FIRM facial-identity technology prevents impersonation during worker onboarding, and GroundCheck.ai extends verification to physical operations and compliance at factories and warehouses.

The industry is shifting from one-time partner checks to continuous monitoring. Changes in filing behavior, cancelled GST registrations, or expired FSSAI licences can serve as early warning signals of financial stress or non-compliance.

AuthBridge estimates that this transition is creating a ₹1,200-crore addressable third-party risk management market in India. The company's own third-party risk management business currently generates approximately ₹20 crore against an overall FY26 revenue of just under ₹200 crore, with leadership projecting that this vertical could reach ₹200 crore within one to two years and ₹400 crore within three years.

"The increasing reliance on AI for third-party risk management highlights a critical shift in how Indian businesses handle compliance and operational security. As supply chains scale rapidly alongside quick-commerce networks, manual oversight is no longer sufficient to catch forged licenses, inactive vendors, or worker background risks. For technology and verification startups, this regulatory tightening opens up a massive addressable market. Companies that build scalable, continuous monitoring solutions will find substantial demand as enterprises prioritize transparency and statutory compliance across their entire vendor ecosystem." — Dr. Shishir Gupta, Founder & CEO, StartupLanes