By Timothy S. Donahue

Top Takeaways:

• Court fight: India’s government is urging a court to dismiss Adani Group’s challenge to duty-free sales of unapproved nicotine pouches at Mumbai International Airport.
• Regulatory precedent: The case could determine whether nicotine pouches sold in duty-free airport stores remain subject to India’s drug laws.
• Market implications: The dispute centers on ZYN and White Fox products and could affect future duty-free sales of oral nicotine products throughout India.

India is doubling down on its position that nicotine pouches cannot be legally sold in airport duty-free stores without regulatory approval.

In new court filings, the Indian government argued that selling nicotine pouches at Mumbai’s Chhatrapati Shivaji Maharaj International Airport constitutes a “substantive violation” of the country’s drug laws and poses a “serious public health risk.”

The filing comes as the Adani Group seeks to overturn a March finding by India’s Central Drugs Standard Control Organization (CDSCO) that duty-free shops operated by its Mumbai Travel Retail unit unlawfully stocked and sold nicotine pouches without the approvals required under Indian law.

At the center of the dispute is whether nicotine pouches sold exclusively to departing international travelers from customs-bonded warehouses are subject to Indian jurisdiction. Adani has argued that products stored in bonded warehouses and sold only to international passengers should not be considered marketed within India.

The government rejected that interpretation.

“The products enter Indian airspace and Indian territory at the moment of arrival at CSMIA (Mumbai’s Chhatrapati Shivaji Maharaj International Airport). “The fact that they are stored in a customs-bonded warehouse does not mean they are not physically present in India,” the government stated in its July 7 court filing.

The CDSCO further argued that the airport’s sale of nicotine pouches constituted “not merely a procedural noncompliance but … a substantive violation” of multiple provisions of India’s drug laws.

India currently permits certain nicotine replacement therapies—including nicotine gum and patches—after regulatory approval. However, nicotine pouches have not received approval and remain classified as unapproved drug products.

According to media reports, Adani has imported more than $29,000 in ZYN nicotine pouches manufactured by Philip Morris International and approximately $7,700 in White Fox nicotine pouches produced by Swedish Smokeless Solutions since August.

Adani has argued that nicotine pouches are “not a drug” and represent a “recent innovation,” while seeking judicial review of the government’s interpretation.

The government disagreed, stating, “Nicotine is a psychoactive and addictive chemical.” It further argued that allowing the sale of unapproved nicotine pouches would expose consumers to products of “unverified quality” and “unestablished safety.”

The filing also cites India’s 2019 law banning vaping products, arguing that allowing nicotine pouch sales through airport duty-free channels would constitute “judicial circumvention of this legislative policy.”

The Bombay High Court is scheduled to hear the case this week.