The Bombay High Court has held that goods imported into India do not get blanket immunity from domestic regulatory laws merely because they are stored or sold through a Duty Free Shop (DFS) beyond the customs barrier. However, the Court stopped short of deciding whether the particular nicotine pouches sold by the petitioners qualify as “drugs” under the Drugs and Cosmetics Act, 1940.
A Division Bench of Justice Suman Shyam and Justice Advait M. Sethna delivered the judgment on September 22, 2026, in petitions concerning nicotine pouches sold at the international departure terminal of Chhatrapati Shivaji Maharaj International Airport, Mumbai.
Background
Mumbai Travel Retail Limited and Flemingo Dutyfree Shop Private Limited were operating Duty Free Shops at the airport and selling imported tobacco-free nicotine pouches under the brands “ZYN” and “FOX”. The authorities stopped their sale, taking the view that the products required regulatory approval and licensing under the Drugs and Cosmetics Act.
The petitioners argued that their shops were situated beyond the customs barrier and that the products were intended for outbound international travellers. According to them, the goods were effectively meant for re-export and therefore domestic regulatory requirements should not apply.
The authorities opposed this position, arguing that goods brought into Indian territory remain subject to domestic laws even when kept in a customs-controlled area.
The High Court relied substantially on its earlier decision in Glamstone Cosmetics Pvt. Ltd. v. Union of India & Ors. The Bench held that entering India’s territorial waters itself brings imported goods within the legal framework governing imports.
The Court observed:
“Import of goods into India, even if it is for the limited purpose of warehousing or re-export, would not enjoy any immunity from the application of the domestic laws.”
The Bench clarified that the exemption available to Duty Free Shops is primarily connected with fiscal measures such as customs duty and taxes. It does not create a blanket exemption from other regulatory laws.
Thus, the first question was answered against the petitioners and in favour of the authorities.
On the second issue, however, the Court declined to give a final finding.
The Bench noted that whether a nicotine pouch falls within the definition of “drug” under Section 3(b) of the Drugs and Cosmetics Act depends upon its composition and intended use. The Court also noted that the authorities had not clearly explained under which of the four categories in Section 3(b) the products were being treated as drugs.
The Court observed:
“Before concluding that ‘Nicotine Pouch’ is a ‘drug’ under the Act of 1940, it was incumbent upon the authority to clearly indicate” the applicable category.
The Court further noted that the petitioners had not supplied complete product specifications, making a factual determination inappropriate in a writ proceeding.
The Court kept open the question of whether the nicotine pouches require an import licence or registration under the Drugs and Cosmetics Act.
Both petitioners were given liberty to submit representations, with supporting material, to the appropriate authority, including the CDSCO, explaining why the products were not drugs or were covered by applicable Schedule D or Schedule K exemptions.
The representations, if filed within four weeks, must be considered by the authorities through a reasoned order, with a personal hearing if necessary. The exercise must be completed within 30 days of receiving the representation.
The writ petitions were accordingly disposed of, with no order as to costs.
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