It's a big public health problem in India. The little packets contain tobacco, betel (another addictive stimulant), and various spice and sweet flavors. Kids love them, and they're very cheap and more socially acceptable than smoking.
I was amazed to find them at the checkout counter in an Indian grocery in California; I can't believe they're legal at all here, much less up front with the candy instead of behind the counter like cigarettes.
Pan masala is betel with lime and other flavors. It gives a high similar to ephedra in small doses. Gutkha is the same thing with tobacco in it. They're being banned in various states in India.