India Reverses Tax-Free Missile Parts Policy Amid Adani Investigation

The Indian government has reversed a policy allowing tax-free imports of missile parts, closely linked to an investigation into Gautam Adani's group. The policy, initially announced in September, aimed to benefit defense companies. However, an October correction removed the blanket exemption, reinstating older rules.

In a significant policy reversal, India has rescinded its controversial decision to allow tax-free imports of missile parts, an issue entangled with billionaire Gautam Adani's group investigation. The move comes after an earlier decision aimed at boosting defense manufacturing.

In September, India proposed a sweeping exemption on import duties for missile parts, providing a considerable advantage to defense companies, including Adani's firm. The recent correction on October 9, however, removed "missiles" from the exemption policy, effectively reinstating the previous regime where only parts for long-range missiles were duty-exempt.

Government statements provided no clarity on the motive behind the correction. The development follows reports of Adani Defence being investigated for a $9 million import tax evasion. Adani Group has not commented on the notice, while Indian finance and taxation bodies remain silent on the rationale.

(With inputs from agencies.)