Indian Court Rejects Adani Plea That Duty-Free Shops Are Beyond Domestic Laws

In a recent case related to the selling of nicotine pouches at the Mumbai airport, the Bombay High Court dismissed Adani Group’s claim that duty-free shops located at international airports are exempt from the purview of Indian domestic laws. 

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This matter first arose when the Indian government accused the duty-free shops located at Mumbai International Airport of stocking and selling nicotine pouches without getting proper clearance from the Indian authorities. 

Nicotine pouches are yet to get approval from the Indian authorities. In April, Adani Group made a claim regarding this matter, stating that international duty-free shops operate outside the territorial limits of India. 

In its order, the court held that goods sold in duty-free shops remain subject to Indian law even when the transaction takes place beyond the customs barrier. 

The ruling effectively means that duty-free outlets inside Indian airports cannot claim exemption from the country’s regulatory framework simply because they operate in international departure zones. 

Indian authorities had described the stocking of nicotine pouches as a substantive violation of drug laws and a serious public health risk. Adani denied wrongdoing. 

The group also argued that nicotine pouches should not be treated as a drug, describing them as a recent product category that does not attract scrutiny under existing Indian law. 

The High Court did not decide that question. 

Instead, it said Adani could make a representation before India’s drug regulators, supported by relevant material, and that the regulator could then decide whether nicotine pouches fall within the applicable legal definition. 

The case is being closely watched because of its possible implications for India’s duty-free sector, particularly on the question of whether products sold beyond customs barriers are still governed by domestic laws. 

Adani Group manages eight airports in India and has outlined an $11 billion expansion plan that includes duty-free retail as it looks to tap rising air-travel demand. 

The group did not immediately respond to Reuters’ request for comment after the court order.