Adani’s Defence Arm Comes Under Government Probe For Alleged $9 Million Import Tax Evasion: Report

Indian authorities are reportedly investigating Adani’s defense unit for allegedly evading import taxes on missile components.

The probe, led by the Directorate of Revenue Intelligence (DRI), began in March and concerns an estimated $9 million in customs duties, according to a Reuters report. Officials allege that Adani Defence Systems and Technologies misclassified short-range missile parts as long-range missile components, which are exempt from import taxes.

The Adani Group confirmed that the DRI had sought clarifications regarding its imports but stated that it had already provided supporting documents and considers the issue closed. 

However, government officials claim Adani executives admitted to misclassification during the inquiry.

Potential Penalty

In similar cases, companies are required to pay both the duty and a 100% penalty, potentially bringing Adani’s total liability to about $18 million.

The alleged tax evasion is substantial, exceeding 10% of Adani Defence’s FY25 revenue of $76 million and more than half its profit. The investigation focuses on non-explosive parts used in short-range surface-to-air missiles, which attract import and local taxes totalling 28%.

Adani Defence, which supplies drones and missile systems to Indian forces, has imported over $70 million worth of components from Russia, Israel, and Canada since January 2024.

While the company referred to a September 2025 rule change that now exempts all missile parts from tariffs, authorities maintain that the earlier rules did not cover short-range systems. The DRI probe remains ongoing, the report added.

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