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Published : 07 Jul 2026, 04:47 PM
An Indian investigation found that Mumbai international airport's duty-free shops run by billionaire Gautam Adani's business group breached the law by selling nicotine pouches, which the government considers a public health hazard, according to documents from an investigation.
Adani denies wrongdoing and is asking judges to declare that a law covering drugs and cosmetics does not apply to duty-free shops and nicotine pouches, according to court papers reviewed by Reuters.
Lawyers say the case could set a precedent on how India regulates sales at such outlets and a government win could block sales of one of the world's fastest-growing nicotine products in India's airports.
India banned e-cigarettes and approved certain nicotine replacements like patches and chewing gums following a registration process under the Drugs and Cosmetics Act. Nicotine pouches remain illegal and unapproved.
Tobacco kills 1.35 million people each year in India and a government study in June called nicotine pouches "a new and largely unregulated public health concern," with widespread illegal sales and consumption among people aged 18 to 40.
After receiving complaints from anti-nicotine group Mothers Against Vaping, India's drug department inspected duty-free shops at Mumbai's international airport in March and found imported nicotine pouches were being sold in the departure zone without the necessary approvals, government documents show.
"Nicotine pouches also fall under the definition of a drug ... a valid registration certificate and import license are mandatory," an assistant drugs controller wrote in an April 2 letter to the airport's customs authority, attaching an "investigation report."
Mumbai Travel Retail, a joint venture led by Adani with Dubai's Flemingo, was asked to discontinue sales of nicotine pouches and seek approvals, government letters show.
Adani declined to comment. Flemingo and the Indian health and customs authority did not respond to requests for comment.
Selling a drug without a license could draw a prison term of at least three years and a fine of at least 100,000 rupees ($1,049), or three times the value of the drugs confiscated, whichever is higher.
Reuters is first to report the details of the investigation into Adani sales and its court challenge in Mumbai.
Can Guns Be Sold At Airport?
Adani's firm has told authorities the shops in the international departure area conduct business "beyond the customs frontiers of India" and are outside the regulatory reach of domestic regulations, its non-public High Court filing shows.
"If a murder occurs in the store, will Indian police have no powers to arrest? They will have ... Can they sell guns or ammunition? No," said Murali Neelakantan, who was previously general counsel at Indian drugmakers Cipla and Glenmark Pharmaceuticals.
On June 24, judges in Mumbai's High Court said "no coercive action" should be taken on the existing stock of pouches at Mumbai's duty-free shops, scheduling the case for a July 14 hearing.
Pouches a "Recent Innovation"
Adani runs eight airports in India and is targeting an $11 billion expansion that includes a bet on duty-free offerings. At Mumbai's international airport, it runs more than 30 duty-free shops.
In court, Adani said nicotine pouches "are not a drug" and are a "recent innovation" that was not anticipated by existing tobacco control laws, documents show.
Since August, Adani's firm imported Philip Morris' Zyn nicotine pouches in various flavours worth more than $29,000, and the White Fox brand from Swedish Smokeless Solutions worth $7,700, customs records showed. The companies did not respond to Reuters queries.
Philip Morris says Zyn's US sales in 2025 doubled from 2023. The June Indian government study said both Zyn and White Fox were being sold by Indian vendors illegally.
Separately, Flemingo Dutyfree has told the High Court it operates shops at international seaports - including in Mumbai - and fears similar actions as it was "in the process of stocking" nicotine pouches, documents show.
Seeking licenses for nicotine pouches will compel suppliers to withdraw them from the market, making "the duty free industry in India unattractive to passengers," it said.
