By Ronan Downie
On September 8, during the 2023 G-20 New Delhi summit, leaders from India, the United States, the UAE, Saudi Arabia, France, Germany, Italy, and other EU countries unveiled ambitious plans to establish a pivotal economic corridor that would seamlessly connect India with the Middle East and the EU. This visionary project, known as the India-Middle East-Europe Economic Corridor (IMEC), is set to incorporate an extensive network of rail lines and maritime shipping routes designed to encompass an Eastern Corridor, linking India to the Arabian Gulf, and a Northern Corridor, connecting the Middle East to Europe.
The planned trade route would pass through the UAE, Saudi Arabia, Jordan, and Israel before reaching Europe. A maritime route would connect India’s west coast to the UAE, and a rail route would then cross the Arabian Peninsula via Saudi Arabia and Jordan before reaching its endpoint in the Israeli port of Haifa. From Haifa, goods would reach Europe in the Greek port of Piraeus. This enhancement of trade infrastructure is poised to revolutionize the speed and cost-efficiency of trade along this route; according to Al-Jazeera, it would “cut trade time between India and Europe by 40 percent”. The corridor would also focus, according to Bloomberg, on developing energy infrastructure; enabling the production and transport of green hydrogen and creating new undersea cabling, to improve telecommunications and data transfers to the region.
The Middle East stands to benefit greatly from the multimodal transport route as it would position the region as a central hub in global trade. Goods flowing out of India, which sees its economy and labor force as a competitor to China’s, would seamlessly pass through Middle Eastern railroads before reaching Europe. The IMEC’s participants intend to make significant investments in infrastructure to facilitate this massive trade network. Such infrastructure could act as a needed boost to Middle Eastern economies along the route that face instability. For the IMEC’s oil-rich partners such as the UAE and Saudi Arabia, the project is regarded as a valuable opportunity to accelerate economic activity and infrastructure as a means to contribute to economic diversification, a crucial goal for both.
India is a major exporter of food to Middle Eastern countries, and as the global economy still suffers from ever-so-strained supply chains in light of the COVID-19 pandemic aftermath and the Russia-Ukraine War, tighter economic ties would protect Indian imports in the region.
Of course, the IMEC’s goal is not limited to economic cooperation; it also constitutes a strategic response to the Middle East’s intricate geopolitical tensions. By merging Middle Eastern, European, and South Asian economic interests and interdependence, the IMEC aims to increase regional political discourse and thus unity. Many of the IMEC’s participants are major US partners who have yet to tap into the potential for enhanced political cooperation amongst themselves. This is, of course, a main pillar of the IMEC’s objective and a fundamental reason for the United States’ backing, despite it having little to no material benefit from the project. A unified economic front among IMEC partners would significantly bolster their capacity to diplomatically address regional challenges.
The reason for the United States’ involvement in this becomes obvious when assessing Beijing’s increased role in the region. According to The Diplomat, the project has links to the Partnership for Global Infrastructure Investment (PGII). Launched by the G-7 countries in June 2022, the latter positions itself as a “Western alternative to China’s Belt and Road Initiative (BRI)”. The United States sees India and the IMEC as the key to creating a “counter-pole” to Chinese influence, hopefully mitigating Beijing’s presence in Middle Eastern affairs and asserting American influence in the region. It is undeniable that China’s BRI poses a threat to the IMEC’s success as most of its members, such as Saudi Arabia, Jordan, the UAE, and Israel, are all recipients of sizable BRI investments, however, the IMEC wouldn’t necessarily halt Chinese projects but minimize the regional impact of Xi Jinping’s foreign policy.
America’s involvement in the IMEC is equally apparent in one of the corridor’s key caveats, which is the inclusion of two key members– Saudi Arabia and Israel. Saudi Arabia does not recognize Israel’s sovereignty, and the feasibility of the corridor’s success weighs on whether or not Israel and Saudi Arabia normalize relations in the near future. Normalization talks between Israel, Saudi Arabia, and the United States have been in the works for months, as normalization could bring increased security, economic growth, and trade to the peninsula, all while consolidating Washington’s position as chief mediator.
With the promise of increased economic activity and unity in the Middle East, the IMEC seems almost too good to be true. Looking at this deal with skepticism is probably a good idea, considering many of the corridor’s details have yet to be drawn up. Now, it is possible that the deal may not even reach the development stage. After the October 7 attacks perpetrated by Hamas in Southern Israel and the government’s retaliation on Gaza, prospects of both Saudi-Israeli diplomatic normalization and the IMEC project as a whole is in jeopardy. Only time will tell if Saudi Arabia is willing to resume the normalization process, having to balance foreign policy and staunchly pro-Palestinian domestic public opinion, and thus if the IMEC has a chance to evolve beyond its conception stage.
The views expressed in this article are the author’s own, and may not reflect the opinions of The St Andrews Economist.
Image Courtesy of the Saudi Press Agency via The South China Morning Post. Description: “Indian Prime Minister Narendra Modi walks with Saudi Crown Prince Mohammed bin Salman before their bilateral meeting at Hyderabad House in New Delhi on September 11”.