Customs
Contends that Adani Duty Free Shops are not Licence Free, Nicotine Pouch Sale
Not Allowed
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Filing
shows Indian authorities amp up fight against Adani
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Adani
airport shops have sold nicotine pouches against the law, India says
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Billionaire's
group challenging decision in court
1.
Customs Supports Health Ministry: India's
Customs Department has backed the Ministry of Health in opposing the sale of
nicotine pouches at Adani Group-operated duty-free shops at Mumbai
International Airport.
2.
Duty-Free Status Limited to Tax Benefits: Customs
argued that goods being "outside customs frontiers" applies only to
customs duty and taxation, and does not exempt duty-free shops from
complying with Indian regulatory laws.
3.
Health Ministry Inspection: A March
2026 inspection found that nicotine pouches being sold at the airport's
duty-free stores were allegedly in violation of Indian law, as such products
are not approved for sale in India.
4.
Adani Challenges Action: Adani
has challenged the Health Ministry's action before the Bombay High Court,
contending that duty-free shops in the international departure area are outside
the scope of domestic regulations.
5.
Procedural Objection: Adani
also argued that Customs instructed it to stop sales without issuing a formal
show-cause notice or warning.
6.
Sealed Goods Argument: The
company maintained that duty-free goods are sold in sealed bags and are
intended to be used only after passengers leave India.
7.
Customs Rejects Defence: Customs
described this interpretation as "untenable," stating that passengers
can freely consume the products once they take possession of them.
8.
Core Legal Issue: The case
will determine whether duty-free shops are subject to Indian health and
regulatory laws despite enjoying customs duty exemptions.
9.
Commercial Context: Adani
operates eight airports in India and is investing about US$11 billion in
airport expansion, with duty-free retail forming a key part of its business.
10.
Imports of Nicotine Pouches: Since
August 2025, Adani's duty-free business has reportedly imported Zyn and White
Fox nicotine pouches worth over US$35,000 from Swedish Smokeless
Solutions.
11.
Next Hearing: The Bombay High Court is
scheduled to hear the matter on 28 July 2026.
12.
Potential Precedent: The
ruling could establish that duty-free shops enjoy tax concessions but remain
subject to India's public health, safety, and other regulatory laws.
India's
customs authorities have joined the country's health ministry in its fight
against the Adani Group over the sale of nicotine pouches at airports, arguing
its duty-free shops only have tax advantages and are not immune from other
regulations.
A
March inspection by health officials of billionaire Gautam Adani's Mumbai
international airport found the sale of nicotine pouches at its duty-free shops
was against the law — a decision that his company is now
challenging at Mumbai's High Court.
"The
concept of goods being "outside customs frontiers" for taxation
purposes does not grant immunity from regulatory controls," the customs
department said in a filing submitted to Mumbai judges on June 22.
Adani
has argued shops in the international departure area are outside the reach of
domestic regulations, and in a July 13 filing seen by
Reuters argued its legal challenge was valid as customs had asked them to stop
the sales without issuing any warning notice.
The
group has also asserted that goods sold by
duty-free shops to departing passengers are based on legal norms under which
they are put in sealed bags and not supposed to be used until they reach
outside India.
Customs
authorities said that interpretation was "untenable" as passengers
who take possession of duty-free goods can then freely consume them. Adani and
Indian authorities did not respond to Reuters queries.
Nicotine
pouches — one of the world's fastest-growing nicotine products — have become
popular in many countries but remain unapproved in India.
Philip
Morris says its Zyn brand sales in the U.S. have surged, doubling last year
compared with 2023.
Adani
runs eight airports in India and is targeting an $11 billion expansion that includes a bet on duty-free offerings.
Since
August, Adani's firm has imported Zyn and White Fox brands from Swedish
Smokeless Solutions worth over $35,000, Reuters has reported.
The
case will next be heard on July 28.