An Indian court has ruled that products sold at duty-free shops are not exempt from domestic regulations, delivering a setback to the Adani Group’s airport sales of nicotine pouches, which New Delhi classifies as illegal and considers drugs.
In a case regarded as setting a legal precedent on duty-free sales, Adani challenged authorities in April after they accused its Mumbai international airport outlets of illegally stocking and selling nicotine pouches—one of the fastest-growing nicotine products globally—which remain unapproved in India.
Billionaire Gautam Adani’s conglomerate operates eight airports across India and has ambitious plans to invest $11 billion in expansions, including enhancing duty-free retail to tap into the rising demand for air travel.
Indian officials argued before the court that the sale of nicotine pouches constituted a “substantive violation” of drug laws and posed a “serious public health risk,” allegations Adani denied.
The group contended that shops located in international departure zones fall outside the scope of domestic laws, as they exist beyond India’s territorial jurisdiction.
However, the Mumbai High Court rejected this argument in an order issued late Tuesday, stating that “such goods would be subject to the law of the land and governed by the regulatory framework in force, even if the transaction occurs in duty-free shops beyond the customs barrier.”
The court emphasized that “the domestic regulatory regime applies fully to goods brought into duty-free shops within Indian territorial jurisdiction.”
Adani also claimed in court that nicotine pouches are “not a drug” and represent a “recent innovation” that does not attract regulatory scrutiny under Indian law—a position New Delhi disputed.
The court noted it could not resolve this issue at the current stage but allowed Adani to submit representations to Indian drug regulators with supporting evidence, leaving the final decision to the regulatory authorities.
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