Adani's port, India's peril? New fronts in the Mideast conflict

India.com

17-06-2025

Adani's port, India's peril? New fronts in the Mideast conflict
As the Israel-Iran conflict worsens, India faces a growing threat of indirect economic damage. The country's energy security, trade routes, and important business interests are becoming more uncertain.
In response to the rising tensions, the government needs to quickly assess the risks to its energy supply, explore new sources for crude oil, and make sure the country's emergency fuel reserves are strong enough, according to a statement from the think tank GTRI on Sunday.
The Global Trade Research Initiative (GTRI) has warned that the ongoing war is putting India at greater risk of indirect economic damage. The country's energy supply, shipping routes, and major business interests are becoming more uncertain as the conflict continues.
According to GTRI Founder Ajay Srivastava, the growing violence and increasing tension in the region are directly affecting India's important economic and strategic ties with West Asia. He explained that India trades a lot with both countries involved in the conflict, which puts its trade and economic interests at risk, reported Hindu Business Line .
In 2024-25, India exported goods worth $1.24 billion to Iran and imported items worth $441.9 million from the country. Trade with Israel was even larger, with $2.15 billion in exports and $1.61 billion in imports.
However, what matters even more than trade with these two countries is India's heavy dependence on the region for energy. Almost two-thirds of India's crude oil and around half of its liquefied natural gas (LNG) imports travel through the Strait of Hormuz—a route that Iran has now threatened to block.
This narrow waterway, just 21 miles wide at its tightest point, is crucial because it carries nearly 20% of the world's oil supply. For India, which imports more than 80% of its energy needs, the Strait of Hormuz is vital.
The situation became more serious on June 15, when Iran launched missiles at Israel's Haifa port. This port is very important as it handles over 30% of Israel's imports. What makes it more concerning for India is that Adani Ports, an Indian company, owns 70% of this port, explained Srivastava.
According to Srivastava, early reports suggest that the missile attack damaged parts of the port and nearby oil refineries. This has raised concerns that shipping and goods movement could be disrupted, and that the conflict might start affecting Indian business interests in the area.
At the same time, Israel's airstrikes on June 14-15 targeted Houthi military leaders in Yemen, further increasing tensions in the Red Sea. This is worrying because Houthi forces have already attacked cargo ships in the region, putting international trade at risk.
For India, this is a major concern. Almost 30% of India's exports heading west—to places like Europe, North Africa, and the eastern coast of the United States—pass through the Bab el-Mandeb Strait, Srivastava pointed out.
This narrow waterway lies between Yemen and the Horn of Africa and connects the Red Sea to the Arabian Sea. It's an important route for global shipping, especially for countries like India.
With the area now under threat due to rising tensions and attacks, there is a real risk that Indian exports could face delays, higher transport costs, or even disruptions.
He explained that if ships are forced to avoid the Red Sea and take the longer route around the Cape of Good Hope in Africa, delivery times could increase by up to two weeks. This longer journey would also make shipping much more expensive.
As a result, India's exports—especially items like engineering products, textiles, and chemicals—could face serious delays and higher costs. At the same time, it would also make some imported goods more expensive for India, since the cost of bringing them in would go up.
Although India is not directly involved in the conflict, it cannot afford to stay relaxed, he warned. The government needs to quickly assess the risks to its energy supply, look for more diverse sources of crude oil, and make sure the country has enough fuel stored in its emergency reserves.
( Girish Linganna is an award-winning science communicator and a Defence, Aerospace & Geopolitical Analyst. He is the Managi.ng Director of ADD Engineering Components India Pvt. Ltd., a subsidiary of ADD Engineering GmbH, Germany. Contact: [e-mail] )