Hamas’s unexpected assault on Israel and Israel’s swift and unforgiving retaliation could potentially disrupt significant Middle East initiatives, including the India-Middle East-Europe Economic Corridor (IMEC), which was inaugurated last month during the G20 Summit in New Delhi. The United States has been advocating for improved relations between Saudi Arabia and Israel and establishing an economic corridor from India to Europe that would traverse the Middle East. But the future of these endeavours now remains uncertain as Tel-Aviv has declared war on the militant grouping and is carrying out unrelenting airstrikes on the Gaza Strip in response to the deadliest attack by Hamas on Israel in half a century.
With Israel currently embroiled in violent conflict, there are concerns that the progress of this corridor may be impacted. Israel has disrupted the Gaza Strip’s electricity, food, fuel and medicine supply, and Israeli/American F-35 jets are conducting airstrikes in the area. Iran is effusive in its praises for the Hamas attacks, while Qatar and Saudi Arabia have expressed support for the militant group. “The prospects for US plans regarding the IMEC—or, in the broader context, Saudi-Israel peace— now appear uncertain,” a geopolitical analyst has pointed out.
What Exactly is the IMEC?
IMEC is a plan for a clutch of transportation routes—by rail and sea—to help Asia, the Arabian Gulf and Europe to work together towards economic growth. The Partnership for Global Infrastructure Investment (PGII), aiming to fund infrastructure projects in less developed countries through private and public investments, is the broader picture of the IMEC plan, India’s alternative to the Chinese BRI.
It is not common for a project to encompass both geopolitics and geoeconomics, but Prime Minister Narendra Modi’s visionary initiative has resulted in the creation of IMEC, representing a significant milestone in greatly enhancing India’s trade and geopolitical aspirations, particularly in relation to the Gulf region. In concrete terms, India has successfully fulfilled its longstanding need for a trade corridor connecting the Gulf region and the European Union (EU).
The IMEC promises to enhance trade but will also demand substantial investments in infrastructure and innovative strategies. Thanks to its cost-effective and efficient route for shipping products to the EU, the UAE is poised to become a crucial hub for India’s exports. This route is expected to outperform the time and cost of transporting goods from Gujarat to Germany once the necessary infrastructure has been established.
Abraham Accords & I2U2
The project has eight major stakeholders, including India, the UAE, Saudi Arabia, Italy, France, Germany and the European Union. Additionally, there is active participation from Israeli ports, aligning with the spirit of the Abraham Accords and the I2U2 initiative. This involvement from Israel has generated significant enthusiasm within the country.
The Abraham Accords are a series of historic agreements signed in 2020, normalising diplomatic relations between Israel and several Arab nations, including the UAE and Bahrain. These accords marked a significant shift in Middle Eastern geopolitics by fostering peace and cooperation between Israel and its Arab neighbours.
The I2U2 initiative, also known as ‘Israel-United Arab Emirates-Uruguay-USA’, aims to promote economic cooperation, innovation and entrepreneurship between these countries. It is an extension of the Abraham Accords, expanding partnerships and collaboration beyond the initial signatories to foster regional economic growth and development.
On the contrary, Turkey has expressed discontent over not being included in the initiative. However, as the network continues to grow, there is potential for additional countries that hold non-hostile relations with the eight partners of the IMEC to become part of this endeavour.
The planned IMEC will encompass railway systems, ship-to-rail connections and road transportation routes that span two distinct corridors:
§ The East Corridor links India to the Arabian Gulf while
§ The North Corridor connects the Gulf to Europe
The IMEC corridor will also incorporate an electricity cable, a hydrogen pipeline and a high-speed data cable.
Signatories to IMEC Accord
§ India, the US, the European Union, Saudi Arabia, the UAE, Italy, Germany, France
Ports That Will be connected
India: Mundra in Gujarat, Kandla in Gujarat and Jawaharlal Nehru Port Trust in Navi Mumbai
Middle East: Dammam and Ras Al Khair in Saudi Arabia; Fujairah, Jebel Ali and Abu Dhabi in the UAE
Israel: Haifa port
Europe: Messina in South Italy, Marseille in France, Piraeus port in Greece
Railway Line That’s Proposed
The railway line will connect Fujairah port in the UAE with Haifa port in Israel, passing through Saudi Arabia (Ghuwaifat and Haradh) and Jordan.
Objectives Behind the Plan
- The goal is to build a complete transportation system, including trains, roads and sea routes that link India, the Middle East and Europe.
- Make transportation better and cheaper, bring countries closer, create jobs and reduce Greenhouse gases in the air—such as carbon dioxide from cars and factories—that can make the Earth too hot.’
- Significantly improve how Asia, Europe and the Middle East work together by making trade and connections much easier.
The IMEC is viewed as a possible response to China’s BRI in the Eurasian area. It can potentially offset China’s increasing economic and political sway, particularly in regions with longstanding connections to the US.
Overcoming the Pak Obstruction
India has consistently maintained its opposition to the BRI and expressed concerns related to the China-Pakistan Economic Corridor (CPEC), which passes through Pakistan-occupied Kashmir (PoK), a region India considers its sovereign territory under Pakistan’s illegal occupation. IMEC circumvents Pakistan, eliminating its obstruction to India’s land-based connections with the West. This addresses a longstanding challenge where Pakistan has historically prevented direct overland trade and connectivity between India and the western regions.
Ties with the Arabian Peninsula
The corridor strengthens India’s relationship with the Arabian Peninsula by creating lasting connections and improving political and strategic ties with countries in that area.
Fostering Regional Connections
§ The IMEC could foster connectivity within the region and contribute to easing political strains on the Arabian Peninsula
§ It has the potential to evolve into a ‘peace-oriented infrastructure’ for the area
Africa’s Development: India’s Role
§ The corridor’s framework could be expanded to include Africa, in line with the US and EU’s efforts to establish a Trans-African corridor
§ This demonstrates India’s commitment to enhancing its involvement in Africa and supporting its infrastructure advancement
Unlocking Region’s Trade Prospects
The IMEC offers a game-changing chance for India to turbo-charge its economic expansion by strengthening trade connections with vital areas. This pathway has the potential to substantially cut down transit durations, enabling trade with Europe to be 40% speedier in contrast to the Suez Canal’s maritime route.
Fuelled Industrial Advancement
The corridor is set to establish a highly effective transportation system, ensuring the smooth flow of goods. This development will stimulate industrial progress, especially in areas linked to the corridor, as businesses will experience greater ease in transporting both raw materials and finished products.
Employment Generation Prospects
With the expansion of economic activities driven by enhanced connectivity, a significant increase in job prospects is expected across various sectors. The upsurge in trade, infrastructure development and related industries will create a demand for both skilled and unskilled labour, thereby promoting employment opportunities.
Energy Security/Accessing Resources
The corridor has the potential to provide a secure channel for accessing energy and vital resources, with a focus on the Middle East. This dependable access to key resources will stabilise India’s energy sector and bolster its expanding economy.
Boosting Special Economic Zones
The corridor offers a strategic opportunity to establish Special Economic Zones (SEZs). These SEZs can serve as magnets for foreign investment, fostering manufacturing activities and stimulating economic advancement within these designated areas.
And the Obstacles that IMEC Faces –
Challenges in Logistics and Connectivity
§ Creating a multi-modal transportation corridor that encompasses railways, roadways, and maritime routes across various nations demands intricate logistical organisation and collaboration among involved parties
§ Determining the most practical and economical routes, evaluating the feasibility of rail and road linkages and ensuring seamless connectivity pose significant hurdles
Unfinished Rail Connections/Construction:
Considerable sections of railway links remain incomplete, notably in the Middle East. This necessitates significant construction endeavours and financial investments to finalise the railway network.
Cooperation among Numerous Nations
Efficiently coordinating actions, policies and regulations across various countries with differing interests, legal structures, and administrative processes represents a significant obstacle in bringing this transcontinental corridor to fruition.
Possible Resistance/Competitive Pressures
Encountering resistance or competition from established transportation routes, notably Egypt’s Suez Canal, which might experience decreased traffic and income, could present difficulties and diplomatic obstacles.
Determining the Expense and Funding
Accurately determining and securing ample financial support for the corridor’s construction, running, and upkeep represents a notable challenge. The anticipated development expenses are substantial, and viable funding origins must be pinpointed. Preliminary assessments indicate that crafting these IMEC pathways could entail an expenditure ranging from USD 3 billion to USD 8 billion.
And What Is the Way to Move Ahead?
Ensuring uniformity and standardisation in critical aspects, such as track sizes, train technologies, container sizes, and more among various nations, is crucial for smooth operations.
Navigating Political Complexities
Maintaining a delicate balance between the geopolitical interests of the involved countries and addressing potential political sensitivities, particularly related to Israel, is essential for the successful execution of the project.
Environmental Considerations, Security
Addressing concerns related to the environmental impact, ensuring long-term sustainability and embracing green and eco-friendly practices in both construction and operation are fundamental aspects of the project. Additionally, implementing stringent security measures to protect cargo and infrastructure from potential threats, theft, piracy, and other security risks is imperative.