India says Adani’s Mumbai airport shops breached law over nicotine pouches
India banned e-cigarettes and approved certain nicotine replacements like patches and chewing gums following a registration process under the Drugs and Cosmetics Act
09 July, 2026
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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 the 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.
The Indian government says tobacco kills 1.35 million people each year in India. 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”.
The government asked Mumbai Travel Retail, a joint venture led by Adani with Dubai’s Flemingo, to discontinue sales of nicotine pouches and seek approvals, government letters show.
Adani did not respond to Reuters queries ahead of the story’s publication. Late on Wednesday, its spokesperson said in an email that the characterisation of “the matter as a ‘breach of law’ is premature and legally unsustainable”, adding that Mumbai Travel Retail has “challenged the regulatory interpretation through judicial review.”
“International passengers arriving in India may lawfully carry nicotine pouches purchased overseas for personal consumption,” the Adani statement said. “Yet the sale of identical products through an international duty-free channel has been treated differently. This apparent inconsistency forms part of the legal challenge.”
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 ($1,000) 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.
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 reach of domestic regulations, its non-public High Court filing shows.
Asked about the Adani group’s point, Murali Neelakantan, former general counsel at Indian drugmakers Cipla and Glenmark Pharmaceuticals, told Reuters: “If a murder occurs in the store, will Indian police have no powers to arrest? They will have … Can (the store) sell guns or ammunition? No.”
The Adani statement responded: “Firearms are prohibited from duty free retail world over because they pose an inherent threat to aviation safety. Drawing a parallel between firearms and regulated nicotine products has no bearing on the legal issues before the Court.”
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.
Adani runs eight airports in India and is targeting an $11bn 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’ PM.N 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. Those companies did not respond to Reuters queries.
Philip Morris says Zyn’s US sales doubled last year 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.
