By Rishika Sadam

HYDERABAD, India India's Goa state has warned the local unit of Abbott Laboratories it plans to suspend the manufacturing license of its popular antacid medicine after inspectors flagged contamination risks and sanitization issues at its factory, government documents show.

The U.S. based drugmaker is locked in a tussle with drug regulators in the tourist state of Goa in western India after the company, starting August, voluntarily recalled many batches of its Digene Gel syrup produced there after it received customer complaints on taste and odor.

Abbott says there is no impact on patient health.

The Goa plant is one of Abbott's two factories in India, where Digene has a 7% share in the market for so-called antiflatulent medicines, according to Pharmarack, which estimated annual Digene syrup sales at $11 million, with 8 million units sold.

Following the recall, inspectors conducted four inspections at Abbott's Goa factory between Aug. 24 and Sept. 2 and flagged issues such as water stagnation in tanks and pipes, saying: "This may lead to the contamination and microbial growth," confidential inspection reports reviewed by Reuters showed.

Following that, the state director of the Goa Food and Drugs department, Jyoti J. Sardesai, wrote a warning notice to Abbott on Sept. 11, saying: "I intend to cancel the product permission for all variants of Digene Gel/suspend the licenses held by you for a period deemed fit."

The state authorities have given Abbott seven days to respond to the notice to defend its position. Abbott India did not immediately respond to a request for comment.

"Whatever protocol has been laid down for the state government to follow when it comes to handling such issues, that has been followed," Goa Health Minister Vishwajit Rane told Reuters about the Abbott incident.

(Reporting by Rishika Sadam; Editing by Aditya Kalra and David Holmes)