Health officials have revoked Johnson & Johnson's license to make cosmetics at a plant outside Mumbai after they discovered the company had used an unauthorized process for sterilizing its baby powder.
J&J said in a statement on Friday that it is in "ongoing discussions" with Indian regulators.
"We understand their concerns and are diligently working with them to resolve the issue," Peggy Ballman, a J&J spokeswoman, said in a statement, adding that there were no consumer complaints or adverse events reported due to its use of the process.
An investigation by the Maharashtra Food and Drug Administration revealed that J&J, at its plant in Mulund, had used ethylene oxide - a substance used to produce industrial chemicals and to sterilize medical equipment - to kill bacteria in its baby powder and had not conducted mandatory tests to make sure there were no remaining traces in the powder.
According to the U.S. Department of Labor, acute exposure to ethylene oxide can cause lung damage, nausea, vomiting and cancer.
Ballman said the plant has not been shut down and the company is appealing the decision. She said the sterilization process in question was used on a one-time basis on a limited amount of baby powder. Baby powder is made from corn or talc and is usually sterilized using steam, she said.
"For a brief time in 2007, we used an alternative sterilization process," she said.
Ballman was unable to explain why the alternative process was used but said it is a "widely accepted and safe practice of sterilization used when making many medical devices and consumer products and leaves no harmful residue."
"However," she said, "the process was not registered with the local FDA and they viewed this step as out of compliance."
The news is the latest in a long list of quality control problems at J&J facilities. Its consumer healthcare division has, over the past few years, recalled millions of bottles of over-the-counter products such as Motrin and children's Tylenol.
And it comes just as J&J is seeking to rebuild its image as a trusted family brand. Last month it launched an ad campaign, "For All You Love," with a