IMEC: A Strategic Culmination of Geopolitical and Geoeconomic Interests

One of the consequential announcements at the New Delhi G20 Summit that piqued the interest of strategic analysts was the India-Middle East-Europe Economic Corridor (IMEC). The multi-modal connectivity intends to connect India to Europe via the Middle East through a network of rail and ports.

The genesis of this project can be traced to I2U2 which was officially announced in October 2021 at the foreign ministers meeting of India, Israel, UAE and the US.  The bloc was conceived to mobilise technology and private sector capital to address the transnational shared challenges. The inaugural joint statement issued after the leaders-level summit meeting in July 2022 mentioned the six focus areas of the group- water, energy, transportation, space, food security and health. The initiatives with respect to food security and energy are already taking shape with UAE rolling out investments in India.

Other than tangible economic gains, the I2U2 is an offshoot of the US-led Abraham Accords that sought to normalise relations between Israel and the Gulf States to promote regional coexistence and peace. In the run-up to the diplomatic normalisation, since 2017 under the initiative “Tracks of Regional Peace” Israel envisioned a regional transportation system¹. In 2019, Israel’s foreign minister officially unveiled the plans to extend the rail tracks in northern Israel to Haifa seaport which would link to Jordan’s rail network which is already connected to Saudi Arabia. As per the plans, Israel would serve as a land bridge between Europe and Gulf states with Jordan as the regional hub². This framework gathered great significance following the establishment of diplomatic ties between Israel and the UAE in September 2020.

At the I2U2 talks, Israel proposed the plan of connecting the Middle East region through Railways. Each of the partners of I2U2 brought their expertise to the table and this unique combination was put to task to realise shared goals. Part of the plan was to use India’s expertise in large infrastructure plans like Railways. Saudi Arabia was included in the plan much later.

With China making swifter forays into the Middle East, the idea began to gain momentum and the NSAs of India and the US who have been regularly meeting beginning the sidelines of the Quad Summit firmed up this idea. In May 2023 the NSAs of India, the US, UAE, and Saudi Arabia met in Riyadh. As per the White House read out the objective of the meeting was a “shared vision of a more secure and prosperous Middle East region interconnected with India and the World”.

Ahead of the meeting, media agencies alluded that the new grouping would announce plans to develop joint infrastructure that would connect Gulf and Arab countries via Railway connection and India would join the network through shipping lanes³.

US NSA Jake Sullivan's address at the Washington Institute for Near East Policy hinted, “if you remember nothing else from my speech, remember I2U2, because you will be hearing more about it as we go forward”. Stating that one of the pillars of Biden administration’s strategy is the regional integration of the Middle East. “A more integrated, interconnected Middle East empowers our allies and partners, advances regional peace and prosperity, and reduces resource demands on the US, in the region over the long term without sacrificing our fundamental interests or our involvement in the region”⁴.

Now putting all these isolated strands together, the concrete plan of IMEC would manifest in its entirety. Israeli Prime Minister Netanyahu’s in his video message post-official launch of IMEC said, “They announced the launch of a pioneering initiative to develop an economic corridor from India, through the Middle East, to Europe. I am pleased to inform you, citizens of Israel, that our country, the State of Israel, will be a central junction in this economic corridor”⁵. Last but not least, PM Modi’s visit to Greece while returning from the Johannesburg BRICS summit has finally sealed this plan.

A culmination of a strategic foreign policy with the right mix of geoeconomics has eventually blossomed into a connectivity corridor. Albeit its subtle undertones, the corridor is characteristically a counter to the expanding footprint of China in the Middle East with numerous strategic implications. Hence by no stretch of imagination, IMEC is not a hurriedly cobbled-up initiative.

Sturdily backed by the US, other than economic gains, one of the foremost objectives from the US-Israel perspective is to unite regional partners against the primary adversary Iran. To circumvent the threats posed by Iran to the cargoes in the Bab-al-Mandab Strait. Surface transport through the region will drastically reduce security vulnerabilities, especially in the Persian Gulf region.

The proposed IMEC has Eastern Corridor which will connect India to the Arabian Gulf and the Northern Corridor will link the Arabian Gulf States to Europe. This seamless connectivity besides enhancing economic integration is estimated to cut the cost of transportation of Indian goods by 30% and time taken by 40%. Once the rail connectivity is complete, goods and services can be trans-shipped from South East Asia through India and the Middle East to Europe. Besides boosting trade and exports, for enhanced global interconnectedness, the corridor will have underground sea links, electricity grids, renewable power and hydrogen pipelines. Officially launching the IMEC- India, US, UAE, Saudi Arabia, France, Germany, Italy and the EU commission have signed a MoU at the G20 summit.

After signing the MoU, Italy, the only G7 country to join China’s BRI (Belt and Road Initiative) signalled its intent to withdraw. With China’s 10^th BRI anniversary drawing to a close, the ambitious project that was instrumental in expanding Beijing’s footprint far and wide is now under scrutiny. The dire economic straits of countries like Pakistan, Sri Lanka, Zambia, Kenya battling with ‘White Elephant’ infrastructure assets and mounting debts and the political crisis seeded by the CPEC (China Pakistan Economic Corridor) investments in Balochistan are raising apprehensions about the transparency and viability of BRI projects.

Unlike the Chinese-driven BRI projects, the sovereign countries of IMEC which together account for $47 trillion or nearly half of the global GDP have deep pockets with incredible growth capacities that can stimulate economic development. Sans a recipient-donor relationship, IMEC countries are equal partners with plans to build their own infrastructure.

Driven by India, the US, UAE and Saudi, the main focus is to secure global supply chains, increase trade accessibility and improve trade facilitation. Additionally, President Biden has committed to supporting IMEC under the Partnership for Global Infrastructure and Investment (PGII) which can potentially mobilize $600 billion in investment.

Alerted by the fallout of BRI, PM Modi affirmed- “Connectivity initiatives are consultative, transparent and participatory with respect for sovereignty and territorial integrity of all countries. Principles of financial responsibility and economic viability to avoid the creation of unsustainable debt burden to recipients and conforming to ecological and environmental standards must be followed” and added, “connectivity is a source of increasing not only mutual trade but also mutual trust between different countries”⁶.

With the basic operative infrastructure already in place, barring a small stretch of railroad in Saudi Arabia, the entire corridor can be activated soon. In a joint pledge, the participating countries have committed to work on a diligent action plan, source of funding, network route, design and allocation of work within the next 60 days of signing the MoU⁷.

The denial of overland access by Pakistan and the absence of physical connectivity constrained India’s entry into the Eurasian and Central Asia region. IMEC holds the promise of unlocking tremendous trade opportunities and bestows strategic and economic advantage. This will reduce costs, enhance efficiency, promote economic cohesion, generate jobs, cut greenhouse emissions, and promotes self-reliance. This will be a great boost to Make in India, Sagarmala and Atmanirbhar Bharat.

The project envisions three industrial corridors- food, green energy (solar, wind, and green hydrogen), and knowledge corridor opening up a slew of opportunities for Indians by way of digital connectivity and innovation collaborations with Israel⁸. The corridor can serve as a green and digital bridge connecting continents and civilisations.

Advocating de-risking as opposed to decoupling, the US and Europe are seeking access to India’s expanding consumer markets through IMEC to balance China. Given the long-term nature of the development of alternate infrastructure of the corridor, India must have a mix of public and private funding for these projects. IMEC would be an invaluable addition to the existing global trading routes and India must remain engaged with other routes like the Suez Canal, and the International North-South Corridor including the Vladivostok and Arctic Routes.

Over the past nine years, India under PM Modi invested diplomatic currency in strengthening ties with Gulf states, especially UAE and Saudi Arabia. Shedding hesitations of history, India has deepened her wide-ranging partnership with the US. Through extensive outreach and engagement, New Delhi has consolidated strategic partnerships with European countries. Besides challenging China’s growing clout, meticulously aligning India’s geopolitical interests and developmental needs with converging security interests of the West and Middle East, India engaged with multiple partners to launch this connectivity corridor.

With an immense demographic dividend and enormous growth potential, India is rapidly exploring every opportunity to reshape India’s growth trajectory. As per IMF estimates, India will contribute 15% of global growth in 2023 and will remain a major driver of growth for the entire decade⁹.

Turbo-charged to revive and enliven the glory as the top global economy with trade links that ran far and deep across the globe, India is going back to its past by attempting to rebuild strong ties with the Arab nations. Ancient India’s trade routes criss-crossed the Gulf and Indian products reached European shores through the Middle East. IMEC Corridor is thus, India’s attempt to rediscover its old trading heritage.  In his interview with CNN News 18, EAM Jaishankar stated, “Connectivity with Middle Eastern countries is deep rooted in Indian civilisation” and alluded to India’s prosperity that stemmed from its international trade.

IMEC can thus be a potential game-changer. India must invest in it to realise her dreams of a developed nation by 2047.

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