Duty-free shops not exempt from Indian laws, Bombay HC upholds ban on nicotine pouches

Duty-free shops operating within airports are not exempt from India's domestic regulatory laws, the Bombay High Court has ruled, refusing to interfere with a ban on the sale of imported nicotine pouches at Mumbai's Chhatrapati Shivaji Maharaj International Airport.

A division bench of Justices Suman Shyam and Advait Sethna, in a judgment passed on Tuesday, held that goods imported into India remain subject to the country's laws even when they are brought in for warehousing or re-export.

Also Read: Court rejects Adani plea that duty-free shops are beyond domestic laws


The court was hearing a petition filed by Mumbai Travel Retail Limited and Flemingo Dutyfree Shop Private Limited, which challenged the ban imposed by the Drugs Controller General on the sale of imported nicotine pouches sold under the brand names Zyn and Fox.

The authorities had prohibited the sale of the products over the absence of licences required under the Drugs and Cosmetics Act.

"Such goods would be subject to the law of the land and would be governed by the regulatory regime in force even if the transaction takes place in the duty free shops, beyond the customs barrier," the high court said.

The bench held that goods restricted or prohibited under any law in force would be treated as "prohibited goods". It added that India's domestic regulatory framework would apply in full to such products brought into duty-free shops operating within the country's territorial jurisdiction.

The court, however, did not decide whether tobacco-free nicotine pouches qualify as 'drugs' under the Drugs and Cosmetics Act. It directed the Central Drugs Standard Control Organisation (CDSCO) to decide the issue.

Also Read: Textile industry wants 6-month extension for duty-free cotton imports

The authorities had on April 2 banned the sale of imported tobacco-free nicotine pouches at Mumbai airport, classifying them as 'drugs' under the Drugs and Cosmetics Act. The classification makes registration certificates and import licences mandatory for their sale.

The petitioners had argued that domestic regulatory requirements should not apply because the nicotine pouches were intended exclusively for consumption by outbound international travellers in the International Departure Terminal.

The high court's ruling rejected the broader claim that goods sold through airport duty-free outlets could be shielded from domestic laws merely because they were intended for outbound passengers.