India’s Directorate of Revenue Intelligence (DRI) is investigating Adani Enterprises’ defence unit, Adani Defence Systems and Technologies Ltd, for allegedly evading ₹770 crore ($9 million) in import duties on missile components through misclassification. The probe, initiated in March 2025, focuses on non-lethal parts imported from Russia, Israel, and Canada since January 2024, which the company wrongly claimed as exempt from customs duties and taxes under rules meant for long-range missiles. For defence industry analysts, regulatory experts, and Adani Group watchers searching Adani Defence tax evasion probe, DRI missile parts misclassification, or Adani import duty evasion 2025, this marks the latest scrutiny for the conglomerate, with executives reportedly admitting to errors during questioning. The alleged evasion exceeds 10% of Adani Defence’s FY25 revenue ($76 million) and half its profit, potentially leading to penalties up to $18 million including 100% fines. While no formal charges have been filed, the case—first reported by Reuters on October 7, 2025—highlights ongoing regulatory pressures on the Adani Group, including over 12 securities allegations and coal import probes since 2014.
Adani Defence, a smaller arm of the $200 billion conglomerate, manufactures missiles, drones, and small arms primarily for Indian security forces, with defence imports totaling $70 million since early 2024.
Probe Details: Misclassification of Missile Components
The DRI’s investigation centers on Adani Defence’s import practices, where components were allegedly mislabeled to qualify for duty exemptions reserved for strategic long-range missile parts. Sources indicate the company imported these non-explosive items—essential for missile assembly—without proper tariff classification, evading integrated goods and services tax (IGST) and basic customs duties.
- Evasion Amount: ₹770 crore ($9 million), significant relative to Adani Defence’s FY25 revenue of $76 million.
- Admission: Executives acknowledged misclassification during DRI questioning, per sources.
- Imports Involved: From Russia, Israel, and Canada; non-lethal parts making up a “significant chunk” of $70 million in defence imports since January 2024.
- Timeline: Probe started in March 2025; no public notice yet, but penalties could include 100% fines plus unpaid duties.
A Reuters-reviewed document details the case, with one source noting: “The alleged amount is more than 10% of Adani Defence’s revenue and over half its profit.”
| Allegation | Details | Potential Penalty |
|---|---|---|
| Misclassification | Claimed Exempt for Long-Range Parts | 100% Fine + Duties ($18M Total) |
| Import Value | $70M Since Jan 2024 | >10% of FY25 Revenue |
| Sources | Russia, Israel, Canada | Non-Lethal Components |
Adani Group’s Broader Regulatory Scrutiny
The probe adds to over a dozen ongoing allegations against the Adani Group, including:
- Securities Breaches: SEBI cleared two stock manipulation cases in 2025 but probes continue.
- Coal Imports: DRI investigation since 2014 for over-invoicing.
- Defence Deals: Recent ₹3,000 crore Invar missile order from Bharat Dynamics highlights the sector’s growth, but Adani’s entry raises oversight.
Adani Enterprises shares dipped 1.2% to ₹3,050 on October 7, 2025, amid the news, but the group maintains: “We comply with all regulations.”
Implications: Defence Sector Scrutiny and Atmanirbhar Bharat
The investigation could:
- Slow Growth: Adani Defence’s $76 million FY25 revenue relies on imports; penalties might disrupt.
- Heighten Oversight: Aligns with ‘Atmanirbhar Bharat’ push for local production, potentially favoring state firms like BDL.
- Investor Confidence: Adds to Adani’s challenges, though the group cleared two SEBI cases recently.
Conclusion: Adani Defence’s Import Probe
The DRI probe into Adani Defence for ₹770 crore tax evasion on missile parts underscores regulatory vigilance in India’s defence sector. As executives admit errors, penalties loom. For the conglomerate, it’s another hurdle—will it impact Atmanirbhar ambitions? The imports inspect. reuters
