Indian authorities are investigating Adani Enterprises’ defence arm for allegedly evading import duties on missile parts, according to an exclusive report by Reuters.
The probe marks the latest regulatory scrutiny of billionaire Gautam Adani’s business empire.
India’s Directorate of Revenue Intelligence (DRI) began investigating Adani Defence Systems and Technologies in March over suspicions that the company misclassified imported missile components to avoid paying tariffs, two government sources told Reuters. The alleged evasion amounts to 770 million rupees ($9 million).
Adani Defence, a relatively smaller unit of the group, manufactures drones, small arms and missile systems for Indian security forces.
The case centres on imports used to produce short-range surface-to-air missiles. Such parts normally attract a 10% import duty and an 18% local tax.
Investigators allege the company wrongly declared them as components for long-range missiles, which were exempt from tariffs under earlier rules.
One government source told Reuters that Adani executives admitted to the misclassification during the probe but gave no further details.
The company, however, has not responded to that claim. In a statement to Reuters, Adani Group said the DRI had only sought “clarifications” on the imports and that it had provided supporting documents.
“The issue stands closed from our end,” a spokesperson said, without confirming whether any payments were made to settle the matter.
The alleged evasion is notable, as $9 million represents more than 10% of Adani Defence’s 2024–25 revenue of $76 million and more than half its profit.
Under Indian rules, companies found guilty of misclassification can be asked to pay the unpaid duty along with a 100% penalty. If applied, this could raise Adani Defence’s liability to $18 million, Reuters reported.
The investigation, not previously disclosed, comes as Adani Group faces multiple regulatory challenges. India’s markets regulator recently cleared it in two stock manipulation cases but continues to examine over a dozen other alleged breaches of securities law.
The revenue department has also been investigating Adani since 2014 for alleged over-invoicing of coal imports, which the group denies.
Reuters also reported that the DRI has recently raised similar tariff misclassification issues with Samsung and Volkswagen, both of which are contesting the demands.
Customs data reviewed by Reuters show Adani Defence imported non-explosive missile parts worth $32 million from Russia since last year.
In total, the group has imported $70 million worth of defence components from Russia, Israel and Canada since January 2024.