The directive targets dairy analogue formulations that mimic the appearance, texture, and culinary use of traditional paneer by substituting milk fat and milk solids, either wholly or partially, with vegetable oils, starches, emulsifiers, and non-dairy additives. Under Regulation 2.1.16 of the Food Safety and Standards Regulations 2011, paneer is strictly defined as a standardized product obtained solely from milk solids precipitated with permitted acidulants, wherein natural milk fat is an indispensable component. The KFSDA emphasized that using hydrogenated vegetable fats or non-dairy ingredients in products branded or represented as paneer is legally prohibited.

The enforcement notification applies across the entire commercial supply chain, extending beyond retail packaging to food business operators (FBOs) in the hospitality sector. Restaurants, industrial caterers, cloud kitchens, and wholesale food manufacturers are explicitly barred from purchasing, storing, supplying, or using analogue paneer as a raw ingredient in prepared meals. However, the government clarified that the prohibition excludes standardized foods governed by separate FSSAI quality benchmarks—such as frozen desserts, processed cheese, and mixed fat spreads.

Health and regulatory authorities highlighted that the intervention serves as a proactive measure to protect public health and prevent market deception. Although laboratory testing of multiple paneer samples collected across Karnataka did not detect widespread adulteration within certified dairy streams, the lack of specific national quality standards for non-dairy analogues created significant regulatory loopholes. Officials pointed out that consumers cannot visually distinguish between genuine dairy paneer and analogue substitutes, while the unmonitored use of cheap, heavily processed vegetable fats in hot food preparations raises long-term cardiovascular and metabolic health risks.