Adani's airport shops sold nicotine pouches in breach of law

An 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.

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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.