US-China trade tensions will not impact our ports : Karan Adani
THIRUVANANTHAPURAM : Adani Ports and Special Economic Zones’ (APSEZ) Managing Director Karan Adani said on May 2nd that despite the potential impact of the new US tariffs on Sino-US trade, the company is not overly concerned as it is not dependent on either of the countries for traffic, and nor does it have any ports there. Instead, it believes its growth will come from supply chains shifting to India.
“Not all countries produce everything, and consumption is going to be there. It’s a matter of how production is shifting from one country to another. That is where India has been taking a few steps, and there will be more opportunities as the process is accelerated. When manufacturing increases, there is a large multiplier effect, and trade growth doubles,” he added.
The son of Adani Group Chairman Gautam Adani, Karan Adani was speaking to mediapersons after Prime Minister Shri Narendra Modi formally inaugurated the Vizhinjam International Seaport near Thiruvananthapuram, which has been commercially operational since December 2024. The event was also attended by Kerala Chief Minister Pinarayi Vijayan, Thiruvananthapuram’s Lok Sabha MP Shashi Tharoor, and other dignitaries.
The dedicated transshipment port is a public-private partnership, where the government of Kerala owns the port with APSEZ acting as the concessionaire. The state government has developed some preparatory infrastructure for the port, including a 2.9 kilometre-long breakwater (a barrier built in the sea to protect a harbour from the force of waves) .
Vizhinjam’s location made it an attractive proposition for a dedicated transshipment deepwater port, being located 10 nautical miles from a major global marine trade route between China and southeast Asia, and Europe and north America.
Despite fears of trade between the world’s two largest economies — US and China —reducing as a result of the tariffs, other forms of trade will compensate for that, Karan Adani said.
“India is manufacturing for increasing domestic consumption, because of which there is higher movement of raw materials. Manufacturing for export will also increase, and there is an opportunity there. For a port, any trade is good trade. Vizhinjam is not dependent on any country, it is dependent on India. Even if US-China trade reduces, there will be other trade that will have to move through this region, i.e, Kerala and Colombo (where APSEZ has a port), ” Karan explained.
He further said that the company sees opportunities in the India-Middle East-Europe Corridor (IMEC), with APSEZ operating multiple ports and terminals on the west coast of India, Dar-es-Salaam in Tanzania, as well as the Haifa port in Israel. Karan, however, conceded that many practical problems remain in the way of IMEC becoming a major force in global trade, including customs provisions and other paperwork.
The next frontier for expansion is the southeast Asian market, he said, and the company is evaluating countries such as Indonesia, Vietnam, and Philippines for the same.
The Vizhinjam port and the Colombo West International Terminal are crucial for APSEZ to gain market share in the transshipment category. Currently, around 75 percent of India’s transshipment cargo is handled by ports outside India, according to industry data.
APSEZ’s management noted that besides cornering international traffic, the Vizhinjam port can help move cargo from domestic ports to overseas markets as well.
For Phase-I of the project, the port has a capacity of 1 million TEUs (twenty foot equivalent units, the standard size of a shipping container) per year, for which the state government and the APSEZ are spending Rs 8,686 crore, including around Rs 819 crore from the union government in the form of viability gap funding. The project went through numerous delays due to local land disputes, inclement weather, and Covid.
The port’s capacity is expected to increase to around 5 million TEUs by 2028, for which the roughly Rs 13,000 crore expenditure will be borne by APSEZ through internal accruals, explained Karan. He added that with efficiency measures such as automation, the company is planning to reduce around 30 percent of the cost of handling a container, which is around $40 currently.