India seeks to quash Adani airport's nicotine pouch court challenge citing illegality, health risk

NEW DELHI - The Indian government has argued the airport sale of nicotine pouches is a "substantive violation" of drug laws and a "serious public health risk", seeking to throw out Adani Group's bid to overturn an official finding that it broke the law by selling the unlicensed products at Mumbai's airport.

Prime Minister Narendra Modi's government has also asserted in court that the ‌airport, one of the ⁠country's ⁠busiest, is on Indian soil, dismissing Adani's argument that Indian law does not apply to nicotine pouches imported and stored in customs warehouses and sold only to departing international passengers.

"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 said in a Mumbai court filing dated July 7, reviewed by Reuters.


The case relates to an Indian drugs department inspection finding in March that duty-free shops at Adani's Mumbai international airport illegally stocked and sold nicotine pouches - defined as a drug in India - without necessary approvals, ⁠prompting a court ‌challenge from the company.

Lawyers say Adani's legal fight with Indian authorities could set a precedent on how the country regulates sales of nicotine pouches - one of the world's fastest growing nicotine products - at duty-free international airports.

Adani did not ⁠respond to Reuters request for comment on the government's latest submissions. The High Court in Mumbai is due to hear the case on Tuesday. The characterisation of "the matter as a 'breach of law' is premature and legally unsustainable", Adani told Reuters last week in a statement, adding that its unit Mumbai Travel Retail had "challenged the regulatory interpretation through judicial review."

The filing by India's Central Drugs Standard Control Organisation said the sale of nicotine pouches at Adani's airport was "not merely a procedural non-compliance but ... a substantive violation of" various provisions of Indian drug laws.

Reuters is the first to report the government's arguments against Adani in court.

NICOTINE AN 'ADDICTIVE CHEMICAL'

Billionaire Gautam Adani's group manages eight airports in India and has an ambitious $11 billion expansion plan, including for duty-free shops, to ‌capitalise on the growing demand for air travel. India has approved some nicotine replacements, including patches and chewing gums, following a registration process. Products such as nicotine pouches, which users insert under their lip to get a nicotine buzz, remain unapproved and illegal. In its submissions, India cited a ⁠2019 Indian law banning e-cigarettes and vapes, which it said recognised the health risks of unregulated nicotine delivery products. Permitting the airport to sell nicotine pouches would amount to "judicial circumvention of this legislative policy", the government filing said.

Tobacco kills 1.35 million people each year in India, the government says. 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. Adani has imported more than $29,000 of Philip Morris' Zyn pouches and the White Fox brand from Swedish Smokeless Solutions worth $7,700, since August, Reuters has previously reported. Adani argued the pouches were "not a drug" and a "recent innovation", but the government disagreed.

"Nicotine is a psychoactive and addictive chemical," the government's submission said.

Selling nicotine pouches without approval is "exposing persons who purchase such products (as) international passengers, many of them Indian citizens, to products of unverified quality, unestablished safety."