Why Adani's $1.2 billion stake in Haifa Port is more than just business

Time of India

17-06-2025

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A strategic asset in a sensitive region
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A long history of commercial and military significance
India's stake in the IMEC corridor
Regional rivalry and security concerns
Adani's broader presence in Israel
The port's multiplier effect
A small asset with high symbolic value
Israel's largest oil refinery, Bazan, suspended all operations at its Haifa Port facilities following significant damage from an Iranian missile strike late Monday night.The attack claimed the lives of three employees and triggered large fires across the strategic energy complex. Visuals from the site showed flames raging at the facility, while firefighting teams continued efforts to bring the situation under control, according to Israeli daily Ha'aretz.The refinery shutdown came after a barrage of Iranian ballistic missiles rained down on Israel's Tel Aviv and the northern port city of Haifa on Monday, killing at least eight people and reducing homes to rubble.This attack, one of the most direct escalations between Tehran and Tel Aviv in recent years, prompted a chilling response from Israeli Defence Minister Yoav Gallant: the people of Tehran 'will pay the price and soon.'As the conflict intensifies, one of India's most prominent commercial footholds in the region, Haifa Port in northern Israel, is facing renewed interest.Acquired by the Adani Group in early 2023, the port is now operating under the shadow of conflict.The Economic Times reported on June 14 that Iranian ballistic missiles had targeted Haifa and a nearby oil refinery amid heightened hostilities between the two countries. Shrapnel reportedly hit parts of a chemical terminal and refinery close to the port.However, the Adani Group denied any damage to port operations. 'False,' said Jugeshinder 'Robbie' Singh, Group CFO , rejecting claims that the facility had been damaged.Despite the immediate denial, the situation highlights the growing uncertainty around Adani's investment in the port, valued at approximately $1.2 billion, and the broader risks of commercial activity in a conflict zone.In January 2023, Adani Ports and Special Economic Zone Ltd (APSEZ), along with Israel's Gadot Group, completed the purchase of a 70% stake in Haifa Port Company. The consortium had won the Israeli government tender in July 2022, part of a larger effort to privatise the country's port infrastructure.Adani Ports and Gadot Group hold 70%-30% shares respectively in the consortium.The port handles close to 20 million tonnes of cargo annually, according to its official website, and remains the busiest and most efficient port in Israel. In 2023, it processed 11.7 million tonnes of cargo and 736,138 TEUs, employing around 750 people. It also handled over 410,000 cruise passengers.Haifa contributes around 3% of Adani Ports' cargo volumes and 5% of its revenue. While these are modest figures in business terms, the port's strategic location, outside Israel's most volatile southern regions, with direct rail and road links to major industrial hubs, gives it geopolitical significance.It also provides deep-water access to large vessels and plays a central role in over 30% of Israel's seaborne trade. Crucially, Haifa is adjacent to key Israeli naval installations and has historically served as a base for its submarine fleet.The port was originally developed by the British in the early 20th century, with construction beginning in 1920 and formal inauguration in 1933. Haifa played an important role during the British Mandate and the early years of Israeli statehood. It has since remained a core part of the country's logistics and naval infrastructure.Today, it sits at the intersection of Israel's economic and military networks, bordering an oil refinery, serving industrial exports, and supporting naval operations. These dual-use characteristics raise the stakes for any foreign investor.The Haifa acquisition aligns with India's interest in the proposed India-Middle East-Europe Economic Corridor (IMEC), a multinational initiative involving India, Israel, the UAE, Saudi Arabia, the EU, and the US. The corridor aims to connect Indian ports to Europe via the Arabian Peninsula and Israel, offering a potential alternative to the Red Sea–Suez Canal route.Israeli Prime Minister Benjamin Netanyahu has described Haifa as a critical link in this corridor. For India, a direct stake in the port could help streamline trade with Europe, strengthen logistics infrastructure, and deepen strategic coordination with regional partners.Dr. James M. Dorsey, a senior fellow at the S. Rajaratnam School of International Studies, characterised the port acquisition as 'I2U2's first success,' referring to the grouping of India, Israel, the UAE, and the US.Haifa is also a site of competition between global powers. China's Shanghai International Port Group (SIPG) operates a separate terminal in Haifa Bay under a 25-year contract signed in 2015. According to The Times of Israel, the terminal, completed at a cost of $1.7 billion (NIS 5.5 billion), sparked controversy over its proximity to Israel's nuclear submarine base and to US Navy vessels, including the Sixth Fleet.The deal reportedly went ahead without review by Israel's cabinet or National Security Council. US officials, including President Donald Trump, warned that Chinese control of critical infrastructure could jeopardise intelligence sharing and defence cooperation. Under American pressure, Israel abandoned earlier plans to allow further Chinese involvement in port operations.Eventually, the tender for the older Haifa terminal was awarded to the Adani-Gadot consortium, a decision seen as more acceptable to both Israel and its Western allies.Beyond the port, the Adani Group also has interests in Israel's defence sector. In 2018, Adani Enterprises formed a joint venture with Elbit Systems to manufacture Hermes 900 drones at a facility in Hyderabad. These UAVs are actively used by the Israel Defense Forces.Elbit Systems, according to its 2022 annual report, derives roughly 90% of its revenue from defence and ranks among the world's 25 largest arms manufacturers. As the regional conflict escalates, demand for such drones may rise, but the strategic exposure of Indian firms to foreign defence partnerships in conflict zones remains a complex issue.According to Israel Ports Company, maritime transport accounts for nearly 98% of the country's foreign trade, and Haifa is a central hub in that system. The port has a effect on employment, logistics and tourism. Industry estimates suggest each job at Haifa Port supports up to seven jobs in related sectors.Yitzhak Blumenthal, CEO of Israel Ports Company, called the opening of the new Haifa Bay terminal 'one of the most important infrastructure projects for Israel's future,' according to The Times of Israel. The entry of private operators is expected to increase competition among Israel's three main ports — Haifa, Ashdod, and Eilat — and improve service quality.For the Adani Group, Haifa is a small part of a much larger logistics empire. The company operates 13 ports in India and handles 24% of the country's maritime cargo. But Haifa's importance lies not in volume but in what it represents: a shift in India's global footprint.The port is a test case for India's ability to invest, operate and maintain critical infrastructure in geopolitically sensitive regions. The challenges are significant. As regional dynamics shift amid a raging conflict, the security of Indian assets in West Asia is no longer guaranteed.Yet, for now, the port remains operational, and Adani's investment continues to signal India's willingness to take calculated risks abroad in pursuit of longer-term strategic and economic goals.