Indian authorities have launched a fresh investigation into Adani Defence Systems and Technologies Ltd., a subsidiary of billionaire Gautam Adani’s vast business empire, over allegations of evading import taxes worth ₹770 million ($9 million) on missile components. The probe, led by India’s Directorate of Revenue Intelligence (DRI), represents the latest round of scrutiny into one of the country’s most politically sensitive and powerful conglomerates.
According to two government officials familiar with the case, Adani Defence is accused of misclassifying imported missile parts as exempt items to avoid tariffs and local taxes. The DRI began the inquiry in March, alleging that the company wrongly claimed duty exemptions meant for components of long-range missiles, even though the parts were used in short-range surface-to-air systems — a category subject to a 10% import tax and an additional 18% local levy.
In documents reviewed by Reuters, the investigation centres on non-explosive parts imported from Russia, Israel, and Canada — materials used to produce missile launching systems and accessories. Commercial records show that Adani Defence imported defence components worth roughly $70 million since January 2024, including $32 million from Russia alone.
Adani’s Response: “Issue Closed” — But Officials Disagree
The Adani Group, in a written statement, confirmed that the DRI had “sought clarifications” regarding the imports and that all necessary documents had been submitted. “The issue stands closed from our end,” a company spokesperson asserted, declining to clarify whether any payment or settlement was made.
However, one senior government official told Reuters that Adani executives “admitted to misclassification” during questioning, though no penalties or recoveries have yet been officially confirmed. Under Indian customs law, if tax evasion is proven, companies are liable to repay the amount evaded plus a penalty equal to the same — in this case, potentially totaling $18 million.
The alleged tax evasion figure, while modest by corporate standards, represents over 10% of Adani Defence’s annual revenue of $76 million and more than half its yearly profit — a significant blow to the group’s defence ambitions.
Regulatory Pressure Mounts on Adani Empire
The investigation comes at a delicate time for the Adani conglomerate, which only recently saw India’s market regulator clear it of two high-profile cases involving alleged stock manipulation. Yet, more than a dozen other probes into securities and import practices remain active.
Notably, the DRI has also been investigating Adani entities since 2014 over alleged over-invoicing of coal imports — a case the company has fought through multiple legal channels. The fresh missile-related inquiry, experts say, could test India’s political will to hold one of its most influential business figures accountable.
“The optics are difficult,” said a retired senior bureaucrat familiar with defence procurement. “Adani’s companies are deeply embedded in national security projects. Any irregularity in that sector immediately raises both financial and strategic red flags.”
Changing Rules and Global Implications
In a twist, Adani has cited a recent government rule change — effective September 2025 — that now exempts all missile components from tariffs. However, investigators argue that this exemption did not exist when the imports under scrutiny took place, and that the earlier misclassification remains a violation of customs law.
Meanwhile, Adani’s defence arm has become an increasingly important supplier to India’s military, producing drones, missiles, and small arms. In August, Gautam Adani publicly stated that his company’s drones were deployed by Indian forces during a border conflict with Pakistan earlier this year.
The DRI’s actions echo similar warnings issued recently to global giants Samsung and Volkswagen for misclassifying imported goods — part of a broader government crackdown on tariff evasion in strategic industries.
A Pattern of Power and Controversy
For Gautam Adani, whose meteoric rise has mirrored India’s own global ambitions, the new investigation reignites concerns about the intersection of political power, defence, and corporate privilege. While the group continues to deny wrongdoing, each probe chips away at its reputation as India’s “national champion.”
Whether this case ends in penalties, settlements, or yet another quiet closure, one thing is clear: Adani’s defence business — and by extension, India’s march toward military self-reliance — is now under the world’s microscope.
