Israel’s latest strikes on Iran and the rising geo-political tension in the region has put the focus on Adani Group’s investment across the Middle East. The Group has over billion-dollar investments in Israel and here is a look at its key businesses, including the majority stake in the strategic Haifa Port.
Billionaire Gautam Adani was also in talks earlier with Israel’s Tower Semiconductor for a $10 billion semiconductor joint venture.
Here is a look at Adani’s business in Israel
Haifa Port: Adani Ports hold a 70 per cent stake in Haifa Port in Israel. It had acquired it in 2023 for $1.2 billion in partnership with Israel’s Gadot Group. The port is critical for Israeli imports and exports and is strategically located in northern Israel, away from the main conflict zones in the south. Haifa port contributes approximately 3 per cent to Adani Ports’ total annual cargo volume. It is also a strategically important asset for the company.
Defence and weapons manufacturing: In 2018, Adani Enterprise had entered into a joint venture with Israel’s Elbit Systems, to form Adani Elbit Advanced Systems India. It manufactures military drones such as the Hermes 900 UAV used by the Israel Defense Forces (IDF). This facility in Hyderabad, India, is the only Hermes 900 production site outside Israel. Elbit makes 85 per cent of the drones used by the Israel Defence Forces.
Other key Adani projects in Israel
Apart from that, the Adani Group is also involved in multiple projects in Israel, including its plans for manufacturing commercial semiconductors and other defence-related collaborations. However, according to a Reuters report in April, Adani Group had put its $10 billion semiconductor joint venture with Israel’s Tower Semiconductor on pause.
Is the Israel-Iran conflict a worry for Adani Group
In the short term, Adani’s Haifa Port will face immediate risks of cargo delays and shipping reroutes due to regional instability. During past such escalations, Adani Ports’ shares had dropped as dry bulk ships faced backlogs. However, it must be noted here that the port’s northern location offers some insulation from southern conflict zones, but prolonged hostilities could disrupt Mediterranean trade routes.
Haifa contributes to around 3 per cent of Adani Ports’ cargo volumes and this escalation might limit direct financial exposure.
With the ongoing escalation, Adan Group’s joint ventures with Elbit Systems may see demand for military drones and weapons rising. However, one needs to also assess the economic and political aspects under consideration.
Israel-Iran Conflict: A look at what happened?
On Friday, Israel carried out ‘preemptive’ strikes against Iran, targeting its nuclear plant and military sites. Israel has declared a state of emergency, and Defence Minister Israel Katz said that retaliatory action from Tehran was possible following the operation.
“Following the State of Israel’s preemptive strike against Iran, a missile and drone attack against the State of Israel and its civilian population is expected in the immediate future,” he said.
The attack comes in the backdrop of rising tension over Iran’s fast-moving nuclear program. For the first time in 20 years, the International Atomic Energy Agency (IAEA) has formally criticized Iran for not cooperating with its inspectors. In response, Iran said it will build a third uranium enrichment site and replace some centrifuges with more advanced ones.
Meanwhile, crude oil prices surged more than 7 per cent, hitting their highest in months.
To conclude, as the situation unfolds, Indian businesses with interests in the region, particularly those tied to defence, trade logistics, and tech partnerships, will be keeping a close watch on the situation. .