A potential easing of tensions in the Middle East could provide a significant boost to India’s ports and logistics sector, with the normalisation of regional trade flows expected to support cargo movement and business activity, according to a report by global brokerage Jefferies.
While the timing and outcome of any peace process remain uncertain, Jefferies believes that a reduction in geopolitical tensions could benefit several Indian port and logistics companies. The brokerage identified Container Corporation of India (CONCOR), Delhivery, JSW Infrastructure, Adani Ports and Special Economic Zone (APSEZ), and Aegis Vopak Terminals as potential beneficiaries.
The report also highlighted the relative resilience of the ports sector compared with rail-based logistics during the ongoing Middle East tensions.
India’s trade with the Middle East stood at USD 229 billion in FY26, with petroleum, oil and lubricants (POL) accounting for a substantial share. Excluding POL, gems and jewellery, merchandise trade with the region amounted to USD 90 billion, representing around 11 per cent of India’s total export-import trade.
The impact of regional tensions has been reflected in cargo movement across the country. Indian port cargo volumes grew 4 per cent year-on-year since March 2026, below the historical growth rate of 6 per cent, while POL volumes increased by just 2 per cent.
Container volumes, however, registered stronger growth of 7 per cent, supported by increased transshipment activity. This helped partly offset the weakness in export-import cargo movement.
In contrast, Indian Railways’ container volumes declined 5 per cent, as the rise in transshipment activity did not translate into corresponding benefits for hinterland logistics. According to Jefferies, this divergence underscores the greater resilience of port operations compared with rail-based logistics amid geopolitical disruptions.
A normalisation of conditions in the Middle East could support a recovery in regional trade, leading to improved cargo throughput and higher capacity utilisation across sectors dependent on trade and energy flows.
Despite identifying potential gains for logistics companies, Jefferies maintained its structural preference for the ports sector. Capacity expansion, the government’s initiatives to privatise terminals at major ports and improvements in operational efficiency are expected to provide sustained growth opportunities.
The brokerage noted that its current estimates already factor in the prolonged impact of Middle East tensions through FY27, followed by a gradual recovery in FY28. Any earlier resolution of the tensions could therefore create upside potential to its existing estimates.
While uncertainties surrounding the timing and outcome of a peace process persist, an improvement in regional trade conditions could strengthen the growth outlook for India’s ports and logistics industry, with port operators potentially emerging as the key beneficiaries.